Sen. John J. Cullerton

Filed: 5/21/2014

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1 AMENDMENT TO HOUSE BILL 2494

2 AMENDMENT NO. ______. Amend House Bill 2494 by replacing

3 everything after the enacting clause with the following:

4 "Section 5. The Department of Revenue Law of the Civil

5 Administrative Code of Illinois is amended by changing Section

6 2505-380 as follows:

7 (20 ILCS 2505/2505-380) (was 20 ILCS 2505/39b47)

8 Sec. 2505-380. Revocation of or refusal to issue or reissue

9 a certificate of registration, permit, or license.

10 (a) The Department has the power, after notice and an

11 opportunity for a hearing, to revoke a certificate of

12 registration, permit, or license issued by the Department if

13 the holder of the certificate of registration, permit, or

14 license fails to file a return, or to pay the tax, fee,

15 penalty, or interest shown in a filed return, or to pay any

16 final assessment of tax, fee, penalty, or interest, as required

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1 by the tax or fee Act under which the certificate of

2 registration, permit, or license is required or any other tax

3 or fee Act administered by the Department.

4 (b) The Department may refuse to issue, reissue, or renew a

5 certificate of registration, permit, or license authorized to

6 be issued by the Department if a person who is named as the

7 owner, a partner, a corporate officer, or, in the case of a

8 limited liability company, a manager or member, of the

9 applicant on the application for the certificate of

10 registration, permit or license, is or has been named as the

11 owner, a partner, a corporate officer, or in the case of a

12 limited liability company, a manager or member, on the

13 application for the certificate of registration, permit, or

14 license of a person that is in default for moneys due under the

15 tax or fee Act upon which the certificate of registration,

16 permit, or license is required or any other tax or fee Act

17 administered by the Department. For purposes of this Section

18 only, in determining whether a person is in default for moneys

19 due, the Department shall include only amounts established as a

20 final liability within the 20 years prior to the date of the

21 Department's notice of refusal to issue or reissue the

22 certificate of registration, permit, or license. For purposes

23 of this Section, "person" means any natural individual, firm,

24 partnership, association, joint stock company, joint

25 adventure, public or private corporation, limited liability

26 company, or a receiver, executor, trustee, guardian or other

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1 representative appointed by order of any court.

2 (c) When revoking or refusing to issue or reissue a

3 certificate of registration, permit, or license issued by the

4 Department, the procedure for notice and hearing used shall be

5 the procedure provided under the Act pursuant to which the

6 certificate of registration, permit, or license was issued.

7 (Source: P.A. 98-496, eff. 1-1-14.)

8 Section 10. The Cigarette Tax Act is amended by changing

9 Sections 3-10, 4d, 4e, 4f, 6, 7, 8, 10, 11, 11a, 11b, 23, 24,

10 and 26 and by adding Sections 4g, 4h, 9g, and 11c as follows:

11 (35 ILCS 130/3-10)

12 Sec. 3-10. Cigarette enforcement.

13 (a) Prohibitions. It is unlawful for any person:

14 (1) to sell or distribute in this State; to acquire,

15 hold, own, possess, or transport, for sale or distribution

16 in this State; or to import, or cause to be imported into

17 this State for sale or distribution in this State:

18 (A) any cigarettes the package of which:

19 (i) bears any statement, label, stamp,

20 sticker, or notice indicating that the

21 manufacturer did not intend the cigarettes to be

22 sold, distributed, or used in the United States,

23 including but not limited to labels stating "For

24 Export Only", "U.S. Tax Exempt", "For Use Outside

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1 U.S.", or similar wording; or

2 (ii) does not comply with:

3 (aa) all requirements imposed by or

4 pursuant to federal law regarding warnings and

5 other information on packages of cigarettes

6 manufactured, packaged, or imported for sale,

7 distribution, or use in the United States,

8 including but not limited to the precise

9 warning labels specified in the federal

10 Cigarette Labeling and Advertising Act, 15

11 U.S.C. 1333; and

12 (bb) all federal trademark and copyright

13 laws;

14 (B) any cigarettes imported into the United States

15 in violation of 26 U.S.C. 5754 or any other federal

16 law, or implementing federal regulations;

17 (C) any cigarettes that such person otherwise

18 knows or has reason to know the manufacturer did not

19 intend to be sold, distributed, or used in the United

20 States; or

21 (D) any cigarettes for which there has not been

22 submitted to the Secretary of the U.S. Department of

23 Health and Human Services the list or lists of the

24 ingredients added to tobacco in the manufacture of the

25 cigarettes required by the federal Cigarette Labeling

26 and Advertising Act, 15 U.S.C. 1335a;

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1 (2) to alter the package of any cigarettes, prior to

2 sale or distribution to the ultimate consumer, so as to

3 remove, conceal, or obscure:

4 (A) any statement, label, stamp, sticker, or

5 notice described in subdivision (a)(1)(A)(i) of this

6 Section;

7 (B) any health warning that is not specified in, or

8 does not conform with the requirements of, the federal

9 Cigarette Labeling and Advertising Act, 15 U.S.C.

10 1333; or

11 (3) to affix any stamp required pursuant to this Act to

12 the package of any cigarettes described in subdivision

13 (a)(1) of this Section or altered in violation of

14 subdivision (a)(2).

15 (b) Documentation. On the first business day of each month,

16 each person licensed to affix the State tax stamp to cigarettes

17 shall file with the Department, for all cigarettes imported

18 into the United States to which the person has affixed the tax

19 stamp in the preceding month:

20 (1) a copy of:

21 (A) the permit issued pursuant to the Internal

22 Revenue Code, 26 U.S.C. 5713, to the person importing

23 the cigarettes into the United States allowing the

24 person to import the cigarettes; and

25 (B) the customs form containing, with respect to

26 the cigarettes, the internal revenue tax information

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1 required by the U.S. Bureau of Alcohol, Tobacco and

2 Firearms;

3 (2) a statement, signed by the person under penalty of

4 perjury, which shall be treated as confidential by the

5 Department and exempt from disclosure under the Freedom of

6 Information Act, identifying the brand and brand styles of

7 all such cigarettes, the quantity of each brand style of

8 such cigarettes, the supplier of such cigarettes, and the

9 person or persons, if any, to whom such cigarettes have

10 been conveyed for resale; and a separate statement, signed

11 by the individual under penalty of perjury, which shall not

12 be treated as confidential or exempt from disclosure,

13 separately identifying the brands and brand styles of such

14 cigarettes; and

15 (3) a statement, signed by an officer of the

16 manufacturer or importer under penalty of perjury,

17 certifying that the manufacturer or importer has complied

18 with:

19 (A) the package health warning and ingredient

20 reporting requirements of the federal Cigarette

21 Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,

22 with respect to such cigarettes; and

23 (B) the provisions of Exhibit T of the Master

24 Settlement Agreement entered in the case of People of

25 the State of Illinois v. Philip Morris, et al. (Circuit

26 Court of Cook County, No. 96-L13146), including a

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1 statement indicating whether the manufacturer is, or

2 is not, a participating tobacco manufacturer within

3 the meaning of Exhibit T.

4 (c) Administrative sanctions.

5 (1) Upon finding that a distributor, secondary

6 distributor, retailer, or person has committed any of the

7 acts prohibited by subsection (a), knowing or having reason

8 to know that he or she has done so, or upon finding that a

9 distributor or person has failed to comply with any

10 requirement of subsection (b), the Department may revoke or

11 suspend the license or licenses of any distributor, ~~or~~

12 secondary distributor, or retailer pursuant to the

13 procedures set forth in Section 6 and impose, on the

14 distributor, secondary distributor, retailer, or person, a

15 civil penalty in an amount not to exceed the greater of

16 500% of the retail value of the cigarettes involved or

17 $5,000.

18 (2) Cigarettes that are acquired, held, owned,

19 possessed, transported in, imported into, or sold or

20 distributed in this State in violation of this Section

21 shall be deemed contraband under this Act and are subject

22 to seizure and forfeiture as provided in this Act, and all

23 such cigarettes seized and forfeited shall be destroyed or

24 maintained and used in an undercover capacity. Such

25 cigarettes shall be deemed contraband whether the

26 violation of this Section is knowing or otherwise.

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1 (d) Unfair trade practices. In addition to any other

2 penalties provided for in this Act, a violation of subsection

3 (a) or subsection (b) of this Section shall constitute an

4 unlawful practice as provided in the Consumer Fraud and

5 Deceptive Business Practices Act.

6 (d-1) Retailers issued a license under Section 4g of this

7 Act and secondary distributors shall not be liable under

8 subsections (c)(1) and (d) of this Section for unknowingly

9 possessing, selling, or distributing to consumers or users

10 cigarettes identified in subsection (a)(1) of this Section if

11 the cigarettes possessed, sold, or distributed by the licensed

12 retailer or secondary distributor were obtained from a

13 distributor licensed under this Act.

14 (d-2) Criminal penalties. A distributor, secondary

15 distributor, retailer, or person who violates subsection (a),

16 or a distributor, secondary distributor, or person who violates

17 subsection (b) of this Section shall be guilty of a Class 4

18 felony.

19 (e) Unfair cigarette sales. For purposes of the Trademark

20 Registration and Protection Act and the Counterfeit Trademark

21 Act, cigarettes imported or reimported into the United States

22 for sale or distribution under any trade name, trade dress, or

23 trademark that is the same as, or is confusingly similar to,

24 any trade name, trade dress, or trademark used for cigarettes

25 manufactured in the United States for sale or distribution in

26 the United States shall be presumed to have been purchased

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1 outside of the ordinary channels of trade.

2 (f) General provisions.

3 (1) This Section shall be enforced by the Department;

4 provided that, at the request of the Director of Revenue or

5 the Director's duly authorized agent, the State police and

6 all local police authorities shall enforce the provisions

7 of this Section. The Attorney General has concurrent power

8 with the State's Attorney of any county to enforce this

9 Section.

10 (2) For the purpose of enforcing this Section, the

11 Director of Revenue and any agency to which the Director

12 has delegated enforcement responsibility pursuant to

13 subdivision (f)(1) may request information from any State

14 or local agency and may share information with and request

15 information from any federal agency and any agency of any

16 other state or any local agency of any other state.

17 (3) In addition to any other remedy provided by law,

18 including enforcement as provided in subdivision(f)

19 ~~(a)~~(1), any person may bring an action for appropriate

20 injunctive or other equitable relief for a violation of

21 this Section; actual damages, if any, sustained by reason

22 of the violation; and, as determined by the court, interest

23 on the damages from the date of the complaint, taxable

24 costs, and reasonable attorney's fees. If the trier of fact

25 finds that the violation is flagrant, it may increase

26 recovery to an amount not in excess of 3 times the actual

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1 damages sustained by reason of the violation.

2 (g) Definitions. As used in this Section:

3 "Importer" means that term as defined in 26 U.S.C. 5702(1).

4 "Package" means that term as defined in 15 U.S.C. 1332(4).

5 (h) Applicability.

6 (1) This Section does not apply to:

7 (A) cigarettes allowed to be imported or brought

8 into the United States for personal use; and

9 (B) cigarettes sold or intended to be sold as

10 duty-free merchandise by a duty-free sales enterprise

11 in accordance with the provisions of 19 U.S.C. 1555(b)

12 and any implementing regulations; except that this

13 Section shall apply to any such cigarettes that are

14 brought back into the customs territory for resale

15 within the customs territory.

16 (2) The penalties provided in this Section are in

17 addition to any other penalties imposed under other

18 provision of law.

19 (Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10;

20 96-1027, eff. 7-12-10.)

21 (35 ILCS 130/4d)

22 Sec. 4d. Sales of cigarettes to and by retailers. In-state

23 makers, manufacturers, and fabricators licensed as

24 distributors under Section 4 of this Act and out-of-state

25 makers, manufacturers, and fabricators holding permits under

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1 Section 4b of this Act may not sell original packages of

2 cigarettes to retailers. A retailer who is licensed under

3 Section 4g of this Act may sell only original packages of

4 cigarettes obtained from manufacturer representatives,

5 licensed secondary distributors, or licensed distributors

6 other than in-state makers, manufacturers, or fabricators

7 licensed as distributors under Section 4 of this Act and

8 out-of-state makers, manufacturers, or fabricators holding

9 permits under Section 4b of this Act.

10 (Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10;

11 97-587, eff. 8-26-11.)

12 (35 ILCS 130/4e)

13 Sec. 4e. Sales of cigarettes to and by secondary

14 distributors. In-state makers, manufacturers, and fabricators

15 licensed as distributors under Section 4 of this Act and

16 out-of-state makers, manufacturers, and fabricators holding

17 permits under Section 4b of this Act may not sell original

18 packages of cigarettes to secondary distributors. A secondary

19 distributor may sell only original packages of cigarettes

20 obtained from licensed distributors other than in-state

21 makers, manufacturers, or fabricators licensed as distributors

22 under Section 4 of this Act and out-of-state makers,

23 manufacturers, or fabricators holding permits under Section 4b

24 of this Act. Secondary distributors may sell cigarettes to

25 Illinois retailers issued a license under Section 4g of this

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1 Act for resale, and are also authorized to make retail sales of

2 cigarettes at the location on the secondary distributor's

3 license as long as the secondary distributor obtains a license

4 under Section 4g of the Cigarette Tax Act and sells 75% or more

5 of the cigarettes sold at such location to retailers issued a

6 license under Section 4g of this Act for resale. All sales by

7 secondary distributors to retailers issued a license under

8 Section 4g of this Act must be made at the location on the

9 secondary distributor's license. Retailers issued a license

10 under Section 4g of this Act must take possession of all

11 cigarettes sold by the secondary distributor at the secondary

12 distributor's licensed address. Secondary distributors may not

13 make deliveries of cigarettes to retailers.

14 Secondary distributors may not file a claim for credit or

15 refund with the State under Section 9d of this Act.

16 (Source: P.A. 96-1027, eff. 7-12-10.)

17 (35 ILCS 130/4f)

18 Sec. 4f. Manufacturer representatives.

19 (a) No manufacturer may market cigarettes produced by the

20 manufacturer directly to retailers in this State issued a

21 license under Section 4g of this Act without first having

22 obtained authorization from the Department. Application for

23 authority to maintain representatives in this State to market

24 in this State cigarettes produced by the manufacturer shall be

25 made to the Department on a form furnished and prescribed by

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1 the Department. Each applicant under this Section shall furnish

2 the following information to the Department on a form signed

3 and verified by the applicant under penalty of perjury:

4 (1) the name and address of the applicant;

5 (2) the address of every location from which the

6 applicant proposes to engage in business in this State;

7 (3) the number of manufacturer representatives the

8 applicant requests to maintain in this State; and

9 (4) any other additional information as the Department

10 may reasonably require.

11 The following manufacturers are ineligible to receive

12 authorization to maintain manufacturer representatives in this

13 State:

14 (1) a manufacturer who owes, at the time of

15 application, any delinquent cigarette taxes that have been

16 determined by law to be due and unpaid, unless the

17 applicant has entered into an agreement approved by the

18 Department to pay the amount due;

19 (2) a manufacturer who has had a license revoked within

20 the past 2 years for misconduct relating to stolen or

21 contraband cigarettes or has been convicted of a state or

22 federal crime, punishable by imprisonment of one year or

23 more, relating to stolen or contraband cigarettes;

24 (3) a manufacturer who has been found, after notice and

25 a hearing, to have imported or caused to be imported into

26 the United States for sale or distribution any cigarette in

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1 violation of 19 U.S.C. 1681a;

2 (4) a manufacturer who has been found, after notice and

3 a hearing, to have imported or caused to be imported into

4 the United States for sale or distribution or manufactured

5 for sale or distribution in the United States any cigarette

6 that does not fully comply with the Federal Cigarette

7 Labeling and Advertising Act (15 U.S.C. 1331, et seq.);

8 (5) a manufacturer who has been found, after notice and

9 a hearing, to have made a material false statement in an

10 application or has failed to produce records required to be

11 maintained by this Act;

12 (6) a manufacturer who has been found, after notice and

13 hearing, to have violated any Section of this Act; or

14 (7) a manufacturer licensed as a distributor under

15 Section 4 of this Act or holding a permit under Section 4b

16 of this Act.

17 The Department, upon receipt of an application from a

18 manufacturer who is eligible to maintain manufacturer

19 representatives in this State, shall notify the applicant in

20 writing, not more than 60 days after an application has been

21 received, that the applicant may or may not maintain the

22 requested number of manufacturer representatives in this

23 State. A copy of the notice authorizing a manufacturer to

24 maintain manufacturer representatives in this State shall be

25 available for inspection by the Department at each place of

26 business identified in the application and in the motor vehicle

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1 operated by marketing representatives in the course of

2 performing his or her duties in this State on behalf of the

3 manufacturer.

4 A manufacturer representative shall notify the Department

5 of any change in the information contained on the application

6 form and shall do so within 30 days after any such change.

7 (b) Only directors, officers, and employees of the

8 manufacturer may act as manufacturer representatives in this

9 State. The manufacturer shall provide to the Department the

10 names and addresses of the manufacturer representatives

11 operating in this State and the make, model, and license plate

12 number of each motor vehicle operated by a manufacturer

13 representative in the course of performing his or her duties in

14 this State on behalf of the manufacturer. The following

15 individuals may not act as manufacturer representatives:

16 (1) an individual who owes any delinquent cigarette

17 taxes that have been determined by law to be due and

18 unpaid, unless the individual has entered into an agreement

19 approved by the Department to pay the amount due;

20 (2) an individual who has had a license revoked within

21 the past 2 years for misconduct relating to stolen or

22 contraband cigarettes or has been convicted of a state or

23 federal crime, punishable by imprisonment of one year or

24 more, relating to stolen or contraband cigarettes;

25 (3) an individual who has been found, after notice and

26 a hearing, to have made a material false statement in an

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1 application or has failed to produce records required to be

2 maintained by this Act; or

3 (4) an individual who has been found, after notice and

4 hearing, to have violated any Section of this Act.

5 (c) Manufacturer representatives may sell to retailers in

6 this State who are licensed under Section 4g of this Act only

7 original packages of cigarettes made, manufactured, or

8 fabricated by the manufacturer and purchased or obtained from a

9 distributor licensed under this Act, or the Cigarette Tax Use

10 Act, and on which tax stamps have been affixed. Manufacturer

11 representatives may sell up to 600 stamped original packages of

12 cigarettes in a calendar year, for the purpose of promoting the

13 manufacturer's brands of cigarettes. A manufacturer

14 representative may not possess more than 500 stamped original

15 packages of cigarettes made, manufactured, or fabricated by the

16 manufacturer and purchased or obtained from a distributor

17 licensed under this Act or the Cigarette Use Tax Act. Any

18 original packages of cigarettes in the possession of a

19 manufacturer representative that (i) are not made,

20 manufactured, or fabricated by the manufacturer and purchased

21 or obtained from a distributor licensed under this Act or the

22 Cigarette Use Tax Act, other than cigarettes for personal use

23 and consumption, (ii) exceed the maximum quantity of 500

24 original packages of cigarettes, excluding packages of

25 cigarettes for personal use and consumption; (iii) violate

26 Section 3-10 of this Act; or (iv) do not have the proper tax

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1 stamps affixed, are contraband and subject to seizure and

2 forfeiture.

3 Manufacturer representatives may sell, on behalf of

4 licensed distributors, stamped original packages of cigarettes

5 to retailers who are licensed under Section 4g of this Act ~~on~~

6 ~~behalf of licensed distributors~~. The manufacturer

7 representative shall provide the distributor with a signed

8 receipt for the cigarettes obtained from the distributor. The

9 distributor shall invoice the licensed retailer, and the

10 licensed retailer shall pay the distributor for all cigarettes

11 provided to licensed retailers by manufacturer representatives

12 on behalf of a distributor.

13 Manufacturer representatives may sell stamped original

14 packages of cigarettes to licensed retailers that are purchased

15 from licensed distributors. Distributors shall provide

16 manufacturer representatives with invoices for stamped

17 original packages of cigarettes sold to manufacturer

18 representatives. Manufacturer representatives shall invoice

19 licensed retailers, and the licensed retailers shall pay the

20 manufacturer representatives for all original packages of

21 cigarettes sold to licensed retailers.

22 (d) Any person aggrieved by any decision of the Department

23 under this Section may, within 20 days after notice of the

24 decision, protest and request a hearing. Upon receiving a

25 request for a hearing, the Department shall give notice to the

26 person requesting the hearing of the time and place fixed for

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1 the hearing and shall hold a hearing in conformity with the

2 provisions of this Act and then issue its final administrative

3 decision in the matter to that person. In the absence of a

4 protest and request for a hearing within 20 days, the

5 Department's decision shall become final without any further

6 determination being made or notice given.

7 (Source: P.A. 97-587, eff. 8-26-11.)

8 (35 ILCS 130/4g new)

9 Sec. 4g. Retailer's license. Beginning on January 1, 2016,

10 no person may engage in business as a retailer of cigarettes in

11 this State without first having obtained a license from the

12 Department. Application for license shall be made to the

13 Department, by electronic means, in a form prescribed by the

14 Department. Each applicant for a license under this Section

15 shall furnish to the Department, in an electronic format

16 established by the Department, the following information:

17 (1) the name and address of the applicant;

18 (2) the address of the location at which the applicant

19 proposes to engage in business as a retailer of cigarettes

20 in this State; and

21 (3) such other additional information as the

22 Department may lawfully require by its rules and

23 regulations.

24 The annual license fee payable to the Department for each

25 retailer's license shall be $75. The fee shall be deposited

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1 into the Tax Compliance and Administration Fund and shall be

2 for the cost of tobacco retail inspection and contraband

3 tobacco and tobacco smuggling with at least two-thirds of the

4 money being used for contraband tobacco and tobacco smuggling

5 operations and enforcement.

6 Each applicant for a license shall pay the fee to the

7 Department at the time of submitting its application for a

8 license to the Department. The Department shall require an

9 applicant for a license under this Section to electronically

10 file and pay the fee.

11 A separate annual license fee shall be paid for each place

12 of business at which a person who is required to procure a

13 retailer's license under this Section proposes to engage in

14 business as a retailer in Illinois under this Act.

15 The following are ineligible to receive a retailer's

16 license under this Act:

17 (1) a person who has been convicted of a felony related

18 to the illegal transportation, sale, or distribution of

19 cigarettes, or a tobacco-related felony, under any federal

20 or State law, if the Department, after investigation and a

21 hearing if requested by the applicant, determines that the

22 person has not been sufficiently rehabilitated to warrant

23 the public trust; or

24 (2) a corporation, if any officer, manager, or director

25 thereof, or any stockholder or stockholders owning in the

26 aggregate more than 5% of the stock of such corporation,

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1 would not be eligible to receive a license under this Act

2 for any reason.

3 The Department, upon receipt of an application and license

4 fee, in proper form, from a person who is eligible to receive a

5 retailer's license under this Act, shall issue to such

6 applicant a license in form as prescribed by the Department.

7 That license shall permit the applicant to whom it is issued to

8 engage in business as a retailer under this Act at the place

9 shown in his or her application. All licenses issued by the

10 Department under this Section shall be valid for a period not

11 to exceed one year after issuance unless sooner revoked,

12 canceled, or suspended as provided in this Act. No license

13 issued under this Section is transferable or assignable. The

14 license shall be conspicuously displayed in the place of

15 business conducted by the licensee in Illinois under such

16 license. The Department shall not issue a retailer's license to

17 a retailer unless the retailer is also registered under the

18 Retailers' Occupation Tax Act. A person who obtains a license

19 as a retailer who ceases to do business as specified in the

20 license, or who never commenced business, or who obtains a

21 distributor's license, or whose license is suspended or

22 revoked, shall immediately surrender the license to the

23 Department.

24 Any person aggrieved by any decision of the Department

25 under this subsection may, within 30 days after notice of the

26 decision, protest and request a hearing. Upon receiving a

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1 request for a hearing, the Department shall give written notice

2 to the person requesting the hearing of the time and place

3 fixed for the hearing and shall hold a hearing in conformity

4 with the provisions of this Act and then issue its final

5 administrative decision in the matter to that person. In the

6 absence of a protest and request for a hearing within 30 days,

7 the Department's decision shall become final without any

8 further determination being made or notice given.

9 (35 ILCS 130/4h new)

10 Sec. 4h. Purchases of cigarettes by licensed retailers. A

11 person who possesses a retailer's license under Section 4g of

12 this Act shall obtain cigarettes for sale only from a licensed

13 distributor, secondary distributor, or manufacturer

14 representative.

15 (35 ILCS 130/6) (from Ch. 120, par. 453.6)

16 Sec. 6. Revocation, cancellation, or suspension of

17 license. The Department may, after notice and hearing as

18 provided for by this Act, revoke, cancel or suspend the license

19 of any distributor, ~~or~~ secondary distributor, or retailer for

20 the violation of any provision of this Act, or for

21 noncompliance with any provision herein contained, or for any

22 noncompliance with any lawful rule or regulation promulgated by

23 the Department under Section 8 of this Act, or because the

24 licensee is determined to be ineligible for a distributor's

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1 license for any one or more of the reasons provided for in

2 Section 4 of this Act, or because the licensee is determined to

3 be ineligible for a secondary distributor's license for any one

4 or more of the reasons provided for in Section 4c of this Act,

5 or because the licensee is determined to be ineligible for a

6 retailer's license for any one or more of the reasons provided

7 for in Section 4g of this Act. However, no such license shall

8 be revoked, cancelled or suspended, except after a hearing by

9 the Department with notice to the distributor, ~~or~~ secondary

10 distributor, or retailer, as aforesaid, and affording such

11 distributor, ~~or~~ secondary distributor, or retailer a

12 reasonable opportunity to appear and defend, and any

13 distributor, ~~or~~ secondary distributor, or retailer aggrieved

14 by any decision of the Department with respect thereto may have

15 the determination of the Department judicially reviewed, as

16 herein provided.

17 The Department may revoke, cancel, or suspend the license

18 of any distributor for a violation of the Tobacco Product

19 Manufacturers' Escrow Enforcement Act as provided in Section 30

20 of that Act. The Department may revoke, cancel, or suspend the

21 license of any secondary distributor for a violation of

22 subsection (e) of Section 15 of the Tobacco Product

23 Manufacturers' Escrow Enforcement Act.

24 If the retailer has a training program that facilitates

25 compliance with minimum-age tobacco laws, the Department shall

26 suspend for 3 days the license of that retailer for a fourth or

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1 subsequent violation of the Prevention of Tobacco Use by Minors

2 and Sale and Distribution of Tobacco Products Act, as provided

3 in subsection (a) of Section 2 of that Act. For the purposes of

4 this Section, any violation of subsection (a) of Section 2 of

5 the Prevention of Tobacco Use by Minors and Sale and

6 Distribution of Tobacco Products Act occurring at the

7 retailer's licensed location during a 24-month period shall be

8 counted as a violation against the retailer.

9 If the retailer does not have a training program that

10 facilitates compliance with minimum-age tobacco laws, the

11 Department shall suspend for 3 days the license of that

12 retailer for a second violation of the Prevention of Tobacco

13 Use by Minors and Sale and Distribution of Tobacco Products

14 Act, as provided in subsection (a-5) of Section 2 of that Act.

15 If the retailer does not have a training program that

16 facilitates compliance with minimum-age tobacco laws, the

17 Department shall suspend for 7 days the license of that

18 retailer for a third violation of the Prevention of Tobacco Use

19 by Minors and Sale and Distribution of Tobacco Products Act, as

20 provided in subsection (a-5) of Section 2 of that Act.

21 If the retailer does not have a training program that

22 facilitates compliance with minimum-age tobacco laws, the

23 Department shall suspend for 30 days the license of a retailer

24 for a fourth or subsequent violation of the Prevention of

25 Tobacco Use by Minors and Sale and Distribution of Tobacco

26 Products Act, as provided in subsection (a-5) of Section 2 of

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1 that Act.

2 A training program that facilitates compliance with

3 minimum-age tobacco laws must include at least the following

4 elements: (i) it must explain that only individuals displaying

5 valid identification demonstrating that they are 18 years of

6 age or older shall be eligible to purchase cigarettes or

7 tobacco products; (ii) it must explain where a clerk can check

8 identification for a date of birth; and (iii) it must explain

9 the penalties that a clerk and retailer are subject to for

10 violations of the Prevention of Tobacco Use by Minors and Sale

11 and Distribution of Tobacco Products Act.

12 Any distributor, ~~or~~ secondary distributor, or retailer

13 aggrieved by any decision of the Department under this Section

14 may, within 20 days after notice of the decision, protest and

15 request a hearing. Upon receiving a request for a hearing, the

16 Department shall give notice in writing to the distributor, ~~or~~

17 secondary distributor, or retailer requesting the hearing that

18 contains a statement of the charges preferred against the

19 distributor, ~~or~~ secondary distributor, or retailer and that

20 states the time and place fixed for the hearing. The Department

21 shall hold the hearing in conformity with the provisions of

22 this Act and then issue its final administrative decision in

23 the matter to the distributor, ~~or~~ secondary distributor, or

24 retailer. In the absence of a protest and request for a hearing

25 within 20 days, the Department's decision shall become final

26 without any further determination being made or notice given.

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1 No license so revoked, as aforesaid, shall be reissued to

2 any such distributor, ~~or~~ secondary distributor, or retailer

3 within a period of 6 months after the date of the final

4 determination of such revocation. No such license shall be

5 reissued at all so long as the person who would receive the

6 license is ineligible to receive a distributor's license under

7 this Act for any one or more of the reasons provided for in

8 Section 4 of this Act, ~~or~~ is ineligible to receive a secondary

9 distributor's license under this Act for any one or more of the

10 reasons provided for in Section 4c of this Act, or is

11 determined to be ineligible for a retailer's license under the

12 Act for any one or more of the reasons provided for in Section

13 4g of this Act.

14 The Department upon complaint filed in the circuit court

15 may by injunction restrain any person who fails, or refuses, to

16 comply with any of the provisions of this Act from acting as a

17 distributor, ~~or~~ secondary distributor, or retailer of

18 cigarettes in this State.

19 (Source: P.A. 96-1027, eff. 7-12-10.)

20 (35 ILCS 130/7) (from Ch. 120, par. 453.7)

21 Sec. 7. The Department or any officer or employee of the

22 Department designated, in writing, by the Director thereof,

23 shall at its or his or her own instance, or on the written

24 request of any distributor, secondary distributor, retailer,

25 manufacturer with authority to maintain manufacturer

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1 representatives, or other interested party to the proceeding,

2 issue subpoenas requiring the attendance of and the giving of

3 testimony by witnesses, and subpoenas duces tecum requiring the

4 production of books, papers, records or memoranda. All

5 subpoenas and subpoenas duces tecum issued under the terms of

6 this Act may be served by any person of full age. The fees of

7 witnesses for attendance and travel shall be the same as the

8 fees of witnesses before the circuit court of this State; such

9 fees to be paid when the witness is excused from further

10 attendance. When the witness is subpoenaed at the instance of

11 the Department or any officer or employee thereof, such fees

12 shall be paid in the same manner as other expenses of the

13 Department, and when the witness is subpoenaed at the instance

14 of any other party to any such proceeding, the cost of service

15 of the subpoena or subpoena duces tecum and the fee of the

16 witness shall be borne by the party at whose instance the

17 witness is summoned. In such case the Department, in its

18 discretion, may require a deposit to cover the cost of such

19 service and witness fees. A subpoena or subpoena duces tecum so

20 issued shall be served in the same manner as a subpoena or

21 subpoena duces tecum issued out of a court.

22 Any circuit court of this State, upon the application of

23 the Department or any officer or employee thereof, or upon the

24 application of any other party to the proceeding, may, in its

25 discretion, compel the attendance of witnesses, the production

26 of books, papers, records or memoranda and the giving of

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1 testimony before the Department or any officer or employee

2 thereof conducting an investigation or holding a hearing

3 authorized by this Act, by an attachment for contempt, or

4 otherwise, in the same manner as production of evidence may be

5 compelled before the court.

6 The Department or any officer or employee thereof, or any

7 other party in an investigation or hearing before the

8 Department, may cause the depositions of witnesses within the

9 State to be taken in the manner prescribed by law for like

10 depositions, or depositions for discovery in civil actions in

11 courts of this State, and to that end compel the attendance of

12 witnesses and the production of books, papers, records or

13 memoranda, in the same manner hereinbefore provided.

14 (Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11.)

15 (35 ILCS 130/8) (from Ch. 120, par. 453.8)

16 Sec. 8. The Department may make, promulgate and enforce

17 such reasonable rules and regulations relating to the

18 administration and enforcement of this Act as may be deemed

19 expedient.

20 Whenever notice is required by this Act, such notice may be

21 given by United States certified or registered mail, addressed

22 to the person concerned at his last known address, and proof of

23 such mailing shall be sufficient for the purposes of this Act.

24 Notice of any hearing provided for by this Act and held before

25 the Department shall be so given not less than 7 days prior to

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1 the day fixed for the hearing.

2 Hearings provided for in this Act, other than hearings

3 before the Illinois Independent Tax Tribunal, shall be held:

4 (1) In Cook County, if the taxpayer's or licensee's

5 principal place of business is in that county;

6 (2) At the Department's office nearest the taxpayer's

7 or licensee's principal place of business, if the

8 taxpayer's or licensee's principal place of business is in

9 Illinois but outside Cook County;

10 (3) In Sangamon County, if the taxpayer's or licensee's

11 principal place of business is outside Illinois.

12 The Circuit Court of the County wherein the hearing is held

13 has power to review all final administrative decisions of the

14 Department in administering this Act. The provisions of the

15 Administrative Review Law, and all amendments and

16 modifications thereof, and the rules adopted pursuant thereto,

17 shall apply to and govern all proceedings for the judicial

18 review of final administrative decisions of the Department

19 under this Act. The term "administrative decision" is defined

20 as in Section 3-101 of the Code of Civil Procedure.

21 Service upon the Director of Revenue or Assistant Director

22 of Revenue of summons issued in any action to review a final

23 administrative decision shall be service upon the Department.

24 The Department shall certify the record of its proceedings if

25 the distributor, secondary distributor, retailer, or

26 manufacturer with authority to maintain manufacturer

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1 representatives pays to it the sum of 75� per page of testimony

2 taken before the Department and 25� per page of all other

3 matters contained in such record, except that these charges may

4 be waived where the Department is satisfied that the aggrieved

5 party is a poor person who cannot afford to pay such charges.

6 Before the delivery of such record to the person applying for

7 it, payment of these charges must be made, and if the record is

8 not paid for within 30 days after notice that such record is

9 available, the complaint may be dismissed by the court upon

10 motion of the Department.

11 No stay order shall be entered by the Circuit Court unless

12 the distributor, secondary distributor,retailer, or

13 manufacturer with authority to maintain manufacturer

14 representatives files with the court a bond in an amount fixed

15 and approved by the court, to indemnify the State against all

16 loss and injury which may be sustained by it on account of the

17 review proceedings and to secure all costs which may be

18 occasioned by such proceedings.

19 Whenever any proceeding provided by this Act is begun

20 before the Department, either by the Department or by a person

21 subject to this Act, and such person thereafter dies or becomes

22 a person under legal disability before such proceeding is

23 concluded, the legal representative of the deceased person or

24 of the person under legal disability shall notify the

25 Department of such death or legal disability. Such legal

26 representative, as such, shall then be substituted by the

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1 Department for such person. If the legal representative fails

2 to notify the Department of his or her appointment as such

3 legal representative, the Department may, upon its own motion,

4 substitute such legal representative in the proceeding pending

5 before the Department for the person who died or became a

6 person under legal disability.

7 Hearings to contest an administrative decision under this

8 Act conducted as a result of a protest filed with the Illinois

9 Independent Tax Tribunal on or after July 1, 2013 shall be

10 conducted pursuant to the provisions of the Illinois

11 Independent Tax Tribunal Act of 2012.

12 (Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11;

13 97-1129, eff. 8-28-12.)

14 (35 ILCS 130/10) (from Ch. 120, par. 453.10)

15 Sec. 10. The Department, or any officer or employee

16 designated in writing by the Director thereof, for the purpose

17 of administering and enforcing the provisions of this Act, may

18 hold investigations and, except as otherwise provided in the

19 Illinois Independent Tax Tribunal Act of 2012, may hold

20 hearings concerning any matters covered by this Act, and may

21 examine books, papers, records or memoranda bearing upon the

22 sale or other disposition of cigarettes by a distributor,

23 secondary distributor, retailer, manufacturer with authority

24 to maintain manufacturer representatives under Section 4f of

25 this Act, or manufacturer representative, and may issue

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1 subpoenas requiring the attendance of a distributor, secondary

2 distributor, retailer, manufacturer with authority to maintain

3 manufacturer representatives under Section 4f of this Act, or

4 manufacturer representative, or any officer or employee of a

5 distributor, secondary distributor, retailer, manufacturer

6 with authority to maintain manufacturer representatives under

7 Section 4f of this Act, or any person having knowledge of the

8 facts, and may take testimony and require proof, and may issue

9 subpoenas duces tecum to compel the production of relevant

10 books, papers, records and memoranda, for the information of

11 the Department.

12 All hearings to contest administrative decisions of the

13 Department conducted as a result of a protest filed with the

14 Illinois Independent Tax Tribunal on or after July 1, 2013

15 shall be subject to the provisions of the Illinois Independent

16 Tax Tribunal Act of 2012.

17 In the conduct of any investigation or hearing provided for

18 by this Act, neither the Department, nor any officer or

19 employee thereof, shall be bound by the technical rules of

20 evidence, and no informality in the proceedings nor in the

21 manner of taking testimony shall invalidate any rule, order,

22 decision or regulation made, approved or confirmed by the

23 Department.

24 The Director of Revenue, or any duly authorized officer or

25 employee of the Department, shall have the power to administer

26 oaths to such persons required by this Act to give testimony

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1 before the said Department.

2 The books, papers, records and memoranda of the Department,

3 or parts thereof, may be proved in any hearing, investigation

4 or legal proceeding by a reproduced copy thereof under the

5 certificate of the Director of Revenue. Such reproduced copy

6 shall, without further proof, be admitted into evidence before

7 the Department or in any legal proceeding.

8 (Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11;

9 97-1129, eff. 8-28-12.)

10 (35 ILCS 130/11) (from Ch. 120, par. 453.11)

11 Sec. 11. Every distributor of cigarettes, who is required

12 to procure a license under this Act, shall keep within

13 Illinois, at his licensed address, complete and accurate

14 records of cigarettes held, purchased, manufactured, brought

15 in or caused to be brought in from without the State, and sold,

16 or otherwise disposed of, and shall preserve and keep within

17 Illinois at his licensed address all invoices, bills of lading,

18 sales records, copies of bills of sale, inventory at the close

19 of each period for which a return is required of all cigarettes

20 on hand and of all cigarette revenue stamps, both affixed and

21 unaffixed, and other pertinent papers and documents relating to

22 the manufacture, purchase, sale or disposition of cigarettes.

23 Every sales invoice issued by a licensed distributor to a

24 retailer in this State shall contain the distributor's

25 cigarette distributor license number. All books and records and

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1 other papers and documents that are required by this Act to be

2 kept shall be kept in the English language, and shall, at all

3 times during the usual business hours of the day, be subject to

4 inspection by the Department or its duly authorized agents and

5 employees. The Department may adopt rules that establish

6 requirements, including record forms and formats, for records

7 required to be kept and maintained by taxpayers. For purposes

8 of this Section, "records" means all data maintained by the

9 taxpayer, including data on paper, microfilm, microfiche or any

10 type of machine-sensible data compilation. Those books,

11 records, papers and documents shall be preserved for a period

12 of at least 3 years after the date of the documents, or the

13 date of the entries appearing in the records, unless the

14 Department, in writing, authorizes their destruction or

15 disposal at an earlier date. At all times during the usual

16 business hours of the day any duly authorized agent or employee

17 of the Department may enter any place of business of the

18 distributor, without a search warrant, and inspect the premises

19 and the stock or packages of cigarettes and the vending devices

20 therein contained, to determine whether any of the provisions

21 of this Act are being violated. If such agent or employee is

22 denied free access or is hindered or interfered with in making

23 such examination as herein provided, the license of the

24 distributor at such premises shall be subject to revocation by

25 the Department.

26 (Source: P.A. 88-480.)

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1 (35 ILCS 130/11a)

2 Sec. 11a. Secondary distributors; records. Every secondary

3 distributor of cigarettes, who is required to procure a license

4 under this Act, shall keep within Illinois, at his licensed

5 address, complete and accurate records of cigarettes held,

6 purchased, brought in from without the State, and sold, or

7 otherwise disposed of, and shall preserve and keep within

8 Illinois at his licensed address all invoices, bills of lading,

9 sales records, copies of bills of sale, inventory at the close

10 of each period for which a report is required of all cigarettes

11 on hand, and other pertinent papers and documents relating to

12 the purchase, sale, or disposition of cigarettes. Every sales

13 invoice issued by a secondary distributor to a retailer in this

14 State shall contain the distributor's secondary distributor

15 license number. All books and records and other papers and

16 documents that are required by this Act to be kept shall be

17 kept in the English language, and shall, at all times during

18 the usual business hours of the day, be subject to inspection

19 by the Department or its duly authorized agents and employees.

20 The Department may adopt rules that establish requirements,

21 including record forms and formats, for records required to be

22 kept and maintained by secondary distributors. For purposes of

23 this Section, "records" means all data maintained by the

24 secondary distributors, including data on paper, microfilm,

25 microfiche or any type of machine sensible data compilation.

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1 Those books, records, papers, and documents shall be preserved

2 for a period of at least 3 years after the date of the

3 documents, or the date of the entries appearing in the records,

4 unless the Department, in writing, authorizes their

5 destruction or disposal at an earlier date. At all times during

6 the usual business hours of the day any duly authorized agent

7 or employee of the Department may enter any place of business

8 of the secondary distributor without a search warrant and may

9 inspect the premises and the stock or packages of cigarettes

10 therein contained to determine whether any of the provisions of

11 this Act are being violated. If such agent or employee is

12 denied free access or is hindered or interfered with in making

13 such examination as herein provided, the license of the

14 secondary distributor at such premises shall be subject to

15 revocation by the Department.

16 (Source: P.A. 96-1027, eff. 7-12-10.)

17 (35 ILCS 130/11b)

18 Sec. 11b. Manufacturer representatives; records. Every

19 manufacturer with authority to maintain manufacturer

20 representatives under Section 4f of this Act shall keep within

21 Illinois, at his business address identified under Section 4f

22 of this Act, complete and accurate records of cigarettes

23 purchased, sold, or otherwise disposed of, and shall preserve

24 and keep within Illinois at his business address all invoices,

25 sales records, copies of bills of sale, inventory at the close

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1 of each period for which a report is required of all cigarettes

2 on hand, and other pertinent papers and documents relating to

3 the purchase, sale, or disposition of cigarettes. Every sales

4 invoice issued by a manufacturer representative to a retailer

5 in this State shall contain the manufacturer's manufacturer

6 representative license number. All books and records and other

7 papers and documents that are required by this Act to be kept

8 shall be kept in the English language, and shall, at all times

9 during the usual business hours of the day, be subject to

10 inspection by the Department or its duly authorized agents and

11 employees. The Department may adopt rules that establish

12 requirements, including record forms and formats, for records

13 required to be kept and maintained by manufacturers with

14 authority to maintain manufacturer representatives under

15 Section 4f of this Act and their manufacturer representatives.

16 For purposes of this Section, "records" means all data

17 maintained by the manufacturers with authority to maintain

18 manufacturer representatives under Section 4f of this Act and

19 their manufacturer representatives, including data on paper,

20 microfilm, microfiche or any type of machine sensible data

21 compilation. Those books, records, papers, and documents shall

22 be preserved for a period of at least 3 years after the date of

23 the documents, or the date of the entries appearing in the

24 records, unless the Department, in writing, authorizes their

25 destruction or disposal at an earlier date. At all times during

26 the usual business hours of the day, any duly authorized agent

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1 or employee of the Department may enter any place of business

2 of the manufacturers with authority to maintain manufacturer

3 representatives under Section 4f of this Act and their

4 manufacturer representatives, or inspect any motor vehicle

5 used by a manufacturer representative in the course of

6 business, without a search warrant and may inspect the

7 premises, motor vehicle, and any packages of cigarettes therein

8 contained to determine whether any of the provisions of this

9 Act are being violated. If such agent or employee is denied

10 free access or is hindered or interfered with in making such

11 examination as herein provided, the ability to maintain

12 marketing representatives in Illinois may be withdrawn by the

13 Department.

14 (Source: P.A. 97-587, eff. 8-26-11.)

15 (35 ILCS 130/11c new)

16 Sec. 11c. Retailers; records. Every retailer who is

17 required to procure a license under this Act shall keep within

18 Illinois complete and accurate records of cigarettes

19 purchased, sold, or otherwise disposed of. It shall be the duty

20 of every retail licensee to make sales records, copies of bills

21 of sale, and inventory at the close of each period for which a

22 report is required of all cigarettes on hand available upon

23 reasonable notice for the purpose of investigation and control

24 by the Department. Such records need not be maintained on the

25 licensed premises, but must be maintained in the State of

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1 Illinois; however, if access is available electronically, the

2 records may be maintained out of state. However, all original

3 invoices or copies thereof covering purchases of cigarettes

4 must be retained on the licensed premises for a period of 90

5 days after such purchase, unless the Department has granted a

6 waiver in response to a written request in cases where records

7 are kept at a central business location within the State of

8 Illinois or in cases where records that are available

9 electronically are maintained out of state. The Department may

10 adopt rules that establish requirements, including record

11 forms and formats, for records required to be kept and

12 maintained by the retailer.

13 For purposes of this Section, "records" means all data

14 maintained by the retailer, including data on paper, microfilm,

15 microfiche or any type of machine sensible data compilation.

16 Those books, records, papers, and documents shall be preserved

17 for a period of at least 3 years after the date of the

18 documents, or the date of the entries appearing in the records,

19 unless the Department, in writing, authorizes their

20 destruction or disposal at an earlier date. At all times during

21 the usual business hours of the day, any duly authorized agent

22 or employee of the Department may enter any place of business

23 of the retailer without a search warrant and may inspect the

24 premises to determine whether any of the provisions of this Act

25 are being violated. If such agent or employee is denied free

26 access or is hindered or interfered with in making such

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1 examination as herein provided, the license of the retailer

2 shall be subject to suspension or revocation by the Department.

3 (35 ILCS 130/23) (from Ch. 120, par. 453.23)

4 Sec. 23. Every distributor, secondary distributor,

5 retailer, manufacturer with authority to maintain manufacturer

6 representatives under Section 4f of this Act and their

7 manufacturer representatives, or other person who shall

8 knowingly and wilfully sell or offer for sale any original

9 package, as defined in this Act, having affixed thereto any

10 fraudulent, spurious, imitation or counterfeit stamp, or stamp

11 which has been previously affixed, or affixes a stamp which has

12 previously been affixed to an original package, or who shall

13 knowingly and wilfully sell or offer for sale any original

14 package, as defined in this Act, having imprinted thereon

15 underneath the sealed transparent wrapper thereof any

16 fraudulent, spurious, imitation or counterfeit tax imprint,

17 shall be deemed guilty of a Class 2 felony.

18 (Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11.)

19 (35 ILCS 130/24) (from Ch. 120, par. 453.24)

20 Sec. 24. Punishment for sale or possession of packages of

21 contraband cigarettes.

22 (a) Possession or sale of 100 or less packages of

23 contraband cigarettes. With the exception of licensed

24 distributors, licensed secondary distributors, or licensed

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1 transporters, as defined in Section 9c of this Act, any person

2 who has in his or her possession or sells 100 or less original

3 packages of contraband cigarettes is guilty of a Class A

4 misdemeanor and a Class 4 felony for each subsequent offense

5 occurring within 12 months of a prior offense.

6 (b) Possession or sale of more than 100 but less than 251

7 packages of contraband cigarettes. With the exception of

8 licensed distributors, licensed secondary distributors, or

9 licensed transporters, as defined in Section 9c of this Act,

10 any person who has in his or her possession or sells more than

11 100 but less than 251 original packages of contraband

12 cigarettes is guilty of a Class A misdemeanor for a first

13 offense and a Class 4 felony for each subsequent offense.

14 (c) Possession or sale of more than 250 but less than 1,001

15 packages of contraband cigarettes. With the exception of

16 licensed distributors, licensed secondary distributors, or

17 licensed transporters, as defined in Section 9c of this Act,

18 any person who has in his or her possession or sells more than

19 250 but less than 1,001 original packages of contraband

20 cigarettes is guilty of a Class 4 felony.

21 (d) Possession or sale of more than 1,000 packages of

22 contraband cigarettes. With the exception of licensed

23 distributors, licensed secondary distributors, or licensed

24 transporters, as defined in Section 9c of this Act, any person

25 who has in his or her possession or sells more than 1,000

26 original packages of contraband cigarettes is guilty of a Class

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1 3 felony.

2 (e) Any person licensed as a distributor, secondary

3 distributor, or transporter, as defined in Section 9c of this

4 Act, who has in his or her possession or sells 100 or less

5 original packages of contraband cigarettes is guilty of a Class

6 A misdemeanor and a Class 4 felony for each subsequent offense

7 occurring within 12 months of a prior offense.

8 (f) Any person licensed as a distributor, secondary

9 distributor, or transporter, as defined in Section 9c of this

10 Act, who has in his or her possession or sells more than 100

11 original packages of contraband cigarettes is guilty of a Class

12 4 felony.

13 (g) Notwithstanding subsections (e) through (f), licensed

14 distributors and transporters, as defined in Section 9c of this

15 Act, may possess unstamped packages of cigarettes.

16 Notwithstanding subsections (e) through (f), licensed

17 distributors may possess cigarettes that bear a tax stamp of

18 another state or taxing jurisdiction. Notwithstanding

19 subsections (e) through (f), a licensed distributor or licensed

20 secondary distributor may possess contraband cigarettes

21 returned to the distributor or licensed secondary distributor

22 by a retailer if the distributor or licensed secondary

23 distributor immediately conducts an inventory of the

24 cigarettes being returned, the distributor or licensed

25 secondary distributor and the retailer returning the

26 contraband cigarettes sign the inventory, the distributor or

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1 licensed secondary distributor provides a copy of the signed

2 inventory to the retailer, and the distributor retains the

3 inventory in its books and records and promptly notifies the

4 Department of Revenue.

5 (h) Notwithstanding subsections (a) through (d) of this

6 Section, a retailer unknowingly possessing contraband

7 cigarettes obtained from a licensed distributor or licensed

8 secondary distributor or knowingly possessing contraband

9 cigarettes obtained from a licensed distributor is not subject

10 to penalties under this Section if the retailer, within 48

11 hours after discovering that the cigarettes are contraband

12 cigarettes, excluding Saturdays, Sundays, and holidays: (i)

13 notifies the Department and the licensed distributor or

14 licensed secondary distributor from whom the cigarettes were

15 obtained, orally and in writing, that he or she possesses

16 contraband cigarettes obtained from a licensed distributor or

17 licensed secondary distributor; (ii) places the contraband

18 cigarettes in one or more containers and seals those

19 containers; and (iii) places on the containers the following or

20 similar language: "Contraband Cigarettes. Not For Sale." All

21 contraband cigarettes in the possession of a retailer remain

22 subject to forfeiture under the provisions of this Act.

23 Any retailer who knowingly possesses packages of

24 cigarettes with a counterfeit stamp with intent to sell is

25 guilty of a Class 2 felony. Any retailer who knowingly

26 possesses unstamped packages of cigarettes with intent to sell

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1 is guilty of a Class 4 felony. A retailer shall not be liable

2 for unknowingly possessing, selling, or distributing to

3 consumers cigarettes that contain an old stamp if the correct

4 tax was collected at the point of sale and the cigarettes were

5 obtained from a distributor licensed under this Act.

6 (Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)

7 (35 ILCS 130/26) (from Ch. 120, par. 453.26)

8 Sec. 26. Whoever acts as a distributor, ~~or~~ secondary

9 distributor, retailer, or manufacturer representative of

10 original packages without having a license, as required by this

11 Act, shall be guilty of a Class 4 felony.

12 (Source: P.A. 96-1027, eff. 7-12-10.)

13 Section 15. The Cigarette Use Tax Act is amended by

14 changing Sections 2-10, 3-10, 4d, 4e, 28, and 30 as follows:

15 (35 ILCS 135/3-10)

16 Sec. 3-10. Cigarette enforcement.

17 (a) Prohibitions. It is unlawful for any person:

18 (1) to sell or distribute in this State; to acquire,

19 hold, own, possess, or transport, for sale or distribution

20 in this State; or to import, or cause to be imported into

21 this State for sale or distribution in this State:

22 (A) any cigarettes the package of which:

23 (i) bears any statement, label, stamp,

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1 sticker, or notice indicating that the

2 manufacturer did not intend the cigarettes to be

3 sold, distributed, or used in the United States,

4 including but not limited to labels stating "For

5 Export Only", "U.S. Tax Exempt", "For Use Outside

6 U.S.", or similar wording; or

7 (ii) does not comply with:

8 (aa) all requirements imposed by or

9 pursuant to federal law regarding warnings and

10 other information on packages of cigarettes

11 manufactured, packaged, or imported for sale,

12 distribution, or use in the United States,

13 including but not limited to the precise

14 warning labels specified in the federal

15 Cigarette Labeling and Advertising Act, 15

16 U.S.C. 1333; and

17 (bb) all federal trademark and copyright

18 laws;

19 (B) any cigarettes imported into the United States

20 in violation of 26 U.S.C. 5754 or any other federal

21 law, or implementing federal regulations;

22 (C) any cigarettes that such person otherwise

23 knows or has reason to know the manufacturer did not

24 intend to be sold, distributed, or used in the United

25 States; or

26 (D) any cigarettes for which there has not been

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1 submitted to the Secretary of the U.S. Department of

2 Health and Human Services the list or lists of the

3 ingredients added to tobacco in the manufacture of the

4 cigarettes required by the federal Cigarette Labeling

5 and Advertising Act, 15 U.S.C. 1335a;

6 (2) to alter the package of any cigarettes, prior to

7 sale or distribution to the ultimate consumer, so as to

8 remove, conceal, or obscure:

9 (A) any statement, label, stamp, sticker, or

10 notice described in subdivision (a)(1)(A)(i) of this

11 Section;

12 (B) any health warning that is not specified in, or

13 does not conform with the requirements of, the federal

14 Cigarette Labeling and Advertising Act, 15 U.S.C.

15 1333; or

16 (3) to affix any stamp required pursuant to this Act to

17 the package of any cigarettes described in subdivision

18 (a)(1) of this Section or altered in violation of

19 subdivision (a)(2).

20 (b) Documentation. On the first business day of each month,

21 each person licensed to affix the State tax stamp to cigarettes

22 shall file with the Department, for all cigarettes imported

23 into the United States to which the person has affixed the tax

24 stamp in the preceding month:

25 (1) a copy of:

26 (A) the permit issued pursuant to the Internal

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1 Revenue Code, 26 U.S.C. 5713, to the person importing

2 the cigarettes into the United States allowing the

3 person to import the cigarettes; and

4 (B) the customs form containing, with respect to

5 the cigarettes, the internal revenue tax information

6 required by the U.S. Bureau of Alcohol, Tobacco and

7 Firearms;

8 (2) a statement, signed by the person under penalty of

9 perjury, which shall be treated as confidential by the

10 Department and exempt from disclosure under the Freedom of

11 Information Act, identifying the brand and brand styles of

12 all such cigarettes, the quantity of each brand style of

13 such cigarettes, the supplier of such cigarettes, and the

14 person or persons, if any, to whom such cigarettes have

15 been conveyed for resale; and a separate statement, signed

16 by the individual under penalty of perjury, which shall not

17 be treated as confidential or exempt from disclosure,

18 separately identifying the brands and brand styles of such

19 cigarettes; and

20 (3) a statement, signed by an officer of the

21 manufacturer or importer under penalty of perjury,

22 certifying that the manufacturer or importer has complied

23 with:

24 (A) the package health warning and ingredient

25 reporting requirements of the federal Cigarette

26 Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,

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1 with respect to such cigarettes; and

2 (B) the provisions of Exhibit T of the Master

3 Settlement Agreement entered in the case of People of

4 the State of Illinois v. Philip Morris, et al. (Circuit

5 Court of Cook County, No. 96-L13146), including a

6 statement indicating whether the manufacturer is, or

7 is not, a participating tobacco manufacturer within

8 the meaning of Exhibit T.

9 (c) Administrative sanctions.

10 (1) Upon finding that a distributor, secondary

11 distributor, retailer, or a person has committed any of the

12 acts prohibited by subsection (a), knowing or having reason

13 to know that he or she has done so, or upon finding that a

14 distributor or person has failed to comply with any

15 requirement of subsection (b), the Department may revoke or

16 suspend the license or licenses of any distributor,

17 retailer, or secondary distributor pursuant to the

18 procedures set forth in Section 6 and impose on the

19 distributor, secondary distributor, retailer, or person, a

20 civil penalty in an amount not to exceed the greater of

21 500% of the retail value of the cigarettes involved or

22 $5,000.

23 (2) Cigarettes that are acquired, held, owned,

24 possessed, transported in, imported into, or sold or

25 distributed in this State in violation of this Section

26 shall be deemed contraband under this Act and are subject

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1 to seizure and forfeiture as provided in this Act, and all

2 such cigarettes seized and forfeited shall be destroyed or

3 maintained and used in an undercover capacity. Such

4 cigarettes shall be deemed contraband whether the

5 violation of this Section is knowing or otherwise.

6 (d) Unfair trade practices. In addition to any other

7 penalties provided for in this Act, a violation of subsection

8 (a) or subsection (b) of this Section shall constitute an

9 unlawful practice as provided in the Consumer Fraud and

10 Deceptive Business Practices Act.

11 (d-1) Retailers who are licensed under Section 4g of the

12 Cigarette Tax Act and secondary distributors shall not be

13 liable under subsections (c)(1) and (d) of this Section for

14 unknowingly possessing, selling, or distributing to consumers

15 or users cigarettes identified in subsection (a)(1) of this

16 Section if the cigarettes possessed, sold, or distributed by

17 the licensed retailer were obtained from a distributor or

18 secondary distributor licensed under this Act or the Cigarette

19 Tax Act.

20 (d-2) Criminal Penalties. A distributor, secondary

21 distributor, retailer, or person who violates subsection (a),

22 or a distributor, secondary distributor, or person who violates

23 subsection (b) of this Section shall be guilty of a Class 4

24 felony.

25 (e) Unfair cigarette sales. For purposes of the Trademark

26 Registration and Protection Act and the Counterfeit Trademark

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1 Act, cigarettes imported or reimported into the United States

2 for sale or distribution under any trade name, trade dress, or

3 trademark that is the same as, or is confusingly similar to,

4 any trade name, trade dress, or trademark used for cigarettes

5 manufactured in the United States for sale or distribution in

6 the United States shall be presumed to have been purchased

7 outside of the ordinary channels of trade.

8 (f) General provisions.

9 (1) This Section shall be enforced by the Department;

10 provided that, at the request of the Director of Revenue or

11 the Director's duly authorized agent, the State police and

12 all local police authorities shall enforce the provisions

13 of this Section. The Attorney General has concurrent power

14 with the State's Attorney of any county to enforce this

15 Section.

16 (2) For the purpose of enforcing this Section, the

17 Director of Revenue and any agency to which the Director

18 has delegated enforcement responsibility pursuant to

19 subdivision (f)(1) may request information from any State

20 or local agency and may share information with and request

21 information from any federal agency and any agency of any

22 other state or any local agency of any other state.

23 (3) In addition to any other remedy provided by law,

24 including enforcement as provided in subdivision(f)

25 ~~(a)~~(1), any person may bring an action for appropriate

26 injunctive or other equitable relief for a violation of

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1 this Section; actual damages, if any, sustained by reason

2 of the violation; and, as determined by the court, interest

3 on the damages from the date of the complaint, taxable

4 costs, and reasonable attorney's fees. If the trier of fact

5 finds that the violation is flagrant, it may increase

6 recovery to an amount not in excess of 3 times the actual

7 damages sustained by reason of the violation.

8 (g) Definitions. As used in this Section:

9 "Importer" means that term as defined in 26 U.S.C. 5702(1).

10 "Package" means that term as defined in 15 U.S.C. 1332(4).

11 (h) Applicability.

12 (1) This Section does not apply to:

13 (A) cigarettes allowed to be imported or brought

14 into the United States for personal use; and

15 (B) cigarettes sold or intended to be sold as

16 duty-free merchandise by a duty-free sales enterprise

17 in accordance with the provisions of 19 U.S.C. 1555(b)

18 and any implementing regulations; except that this

19 Section shall apply to any such cigarettes that are

20 brought back into the customs territory for resale

21 within the customs territory.

22 (2) The penalties provided in this Section are in

23 addition to any other penalties imposed under other

24 provision of law.

25 (Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10;

26 96-1027, eff. 7-12-10.)

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1 (35 ILCS 135/4d)

2 Sec. 4d. Sales of cigarettes to and by retailers. In-state

3 makers, manufacturers, or fabricators licensed as distributors

4 under Section 4 of this Act and out-of-state makers,

5 manufacturers, or fabricators holding permits under Section 7

6 of this Act may not sell original packages of cigarettes to

7 retailers. A retailer who is licensed under Section 4g of the

8 Cigarette Tax Act may sell only original packages of cigarettes

9 obtained from licensed secondary distributors or licensed

10 distributors other than in-state makers, manufacturers, or

11 fabricators licensed as distributors under Section 4 of this

12 Act and out-of-state makers, manufacturers, or fabricators

13 holding permits under Section 7 of this Act.

14 (Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)

15 (35 ILCS 135/4e)

16 Sec. 4e. Sales of cigarettes to and by secondary

17 distributors. In-state makers, manufacturers, and fabricators

18 licensed as distributors under Section 4 of this Act and

19 out-of-state makers, manufacturers, and fabricators holding

20 permits under Section 7 of this Act may not sell original

21 packages of cigarettes to secondary distributors. A secondary

22 distributor may sell only original packages of cigarettes

23 obtained from licensed distributors other than in-state

24 makers, manufacturers, or fabricators licensed as distributors

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1 under Section 4 of this Act and out-of-state makers,

2 manufacturers, or fabricators holding permits under Section 7

3 of this Act. Secondary distributors may sell cigarettes to

4 Illinois retailers who are licensed under Section 4g of the

5 Cigarette Tax Act for resale, and are also authorized to make

6 retail sales of cigarettes at the location on the secondary

7 distributor's license as long as the secondary distributor

8 obtains a license under Section 4g of the Cigarette Tax Act and

9 sells 75% or more of the cigarettes sold at such location to

10 retailers who are licensed under Section 4g of the Cigarette

11 Tax Act for resale.

12 All sales by secondary distributors to Illinois retailers

13 who are licensed under Section 4g of the Cigarette Tax Act must

14 be made at the location on the secondary distributor's license.

15 Retailers who are issued a license under Section 4g of the

16 Cigarette Tax Act must take possession of all cigarettes sold

17 by the secondary distributor at the secondary distributor's

18 licensed address. Secondary distributors may not make

19 deliveries of cigarettes to Illinois retailers who are licensed

20 under Section 4g of the Cigarette Tax Act.

21 Secondary distributors may not file a claim for credit or

22 refund with the State under Section 14a of this Act.

23 (Source: P.A. 96-1027, eff. 7-12-10.)

24 (35 ILCS 135/28) (from Ch. 120, par. 453.58)

25 Sec. 28. Any person who (a) falsely or fraudulently makes,

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1 forges, alters or counterfeits any stamp provided for herein,

2 (b) causes or procures to be falsely or fraudulently made,

3 forged, altered or counterfeited any such stamp, (c) knowingly

4 and wilfully utters, publishes, passes or tenders as genuine

5 any such false, altered, forged or counterfeited stamp, (d)

6 falsely or fraudulently makes, forges, alters or counterfeits

7 any tax imprint on an original package of cigarettes inside a

8 sealed transparent wrapper, (e) causes or procures falsely or

9 fraudulently to be made, forged, altered or counterfeited any

10 such tax imprint or (f) knowingly and wilfully utters,

11 publishes, passes or tenders as genuine any such false,

12 altered, forged or counterfeited tax imprint, for the purpose

13 of evading the tax imposed by this Act, shall be guilty of a

14 Class 2 ~~3~~ felony.

15 (Source: P.A. 77-2229.)

16 (35 ILCS 135/30) (from Ch. 120, par. 453.60)

17 Sec. 30. Punishment for sale or possession of unstamped

18 packages of cigarettes, other than by a licensed distributor or

19 transporter.

20 (a) Possession or sale of more than 9 but less than 101

21 unstamped packages of cigarettes. With the exception of

22 licensed distributors, licensed secondary distributors, or

23 licensed transporters, as defined in Section 9c of the

24 Cigarette Tax Act, any person who has in his or her possession

25 or sells more than 9 but less than 101 original packages of

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1 contraband cigarettes is guilty of a Class A misdemeanor and a

2 Class 4 felony for each subsequent offense occurring within 12

3 months of a prior offense.

4 (b) Possession or sale of more than 100 but less than 251

5 unstamped packages of cigarettes. With the exception of

6 licensed distributors, licensed secondary distributors, or

7 licensed transporters, as defined in Section 9c of the

8 Cigarette Tax Act, any person who has in his or her possession

9 or sells more than 100 but less than 251 original packages of

10 contraband cigarettes is guilty of a Class A misdemeanor for

11 the first offense and a Class 4 felony for each subsequent

12 offense.

13 (c) Possession or sale of more than 250 but less than 1,001

14 unstamped packages of cigarettes. With the exception of

15 licensed distributors, licensed secondary distributors, or

16 licensed transporters, as defined in Section 9c of the

17 Cigarette Tax Act, any person who has in his or her possession

18 or sells more than 250 but less than 1,001 original packages of

19 contraband cigarettes is guilty of a Class 4 felony.

20 (d) Possession or sale of more than 1,000 contraband

21 packages of cigarettes. With the exception of licensed

22 distributors, licensed secondary distributors, or licensed

23 transporters, as defined in Section 9c of the Cigarette Tax

24 Act, any person who has in his or her possession or sells, more

25 than 1,000 original packages of contraband cigarettes is guilty

26 of a Class 3 felony.

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1 (e) Any person licensed as a distributor, secondary

2 distributor, or transporter, as defined in Section 9c of the

3 Cigarette Tax Act, who has in his or her possession or sells

4 100 or less original packages of contraband cigarettes is

5 guilty of a Class A misdemeanor and a Class 4 felony for each

6 subsequent offense occurring within 12 months of a prior

7 offense.

8 (f) Any person licensed as a distributor, secondary

9 distributor, or transporter, as defined in Section 9c of the

10 Cigarette Tax Act, who has in his or her possession or sells

11 more than 100 original packages of contraband cigarettes is

12 guilty of a Class 4 felony.

13 (g) Notwithstanding subsections (e) through (f), licensed

14 distributors and transporters, as defined in Section 9c of the

15 Cigarette Tax Act, may possess unstamped packages of

16 cigarettes. Notwithstanding subsections (e) through (f),

17 licensed distributors may possess cigarettes that bear a tax

18 stamp of another state or taxing jurisdiction. Notwithstanding

19 subsections (e) through (f), a licensed distributor or licensed

20 secondary distributor may possess contraband cigarettes

21 returned to the distributor or licensed secondary distributor

22 by a retailer if the distributor or licensed secondary

23 distributor immediately conducts an inventory of the

24 cigarettes being returned, the distributor or licensed

25 secondary distributor and the retailer returning the

26 contraband cigarettes sign the inventory, the distributor or

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1 licensed secondary distributor provides a copy of the signed

2 inventory to the retailer, and the distributor or licensed

3 secondary distributor retains the inventory in its books and

4 records and promptly notifies the Department of Revenue.

5 (h) Notwithstanding subsections (a) through (d) of this

6 Section, a retailer unknowingly possessing contraband

7 cigarettes obtained from a licensed distributor or licensed

8 secondary distributor or knowingly possessing contraband

9 cigarettes obtained from a licensed distributor or licensed

10 secondary distributor is not subject to penalties under this

11 Section if the retailer, within 48 hours after discovering that

12 the cigarettes are contraband cigarettes, excluding Saturdays,

13 Sundays, and holidays: (i) notifies the Department and the

14 licensed distributor or licensed secondary distributor from

15 whom the cigarettes were obtained, orally and in writing, that

16 he or she possesses contraband cigarettes obtained from a

17 licensed distributor or licensed secondary distributor; (ii)

18 places the contraband cigarettes in one or more containers and

19 seals those containers; and (iii) places on the containers the

20 following or similar language: "Contraband Cigarettes. Not For

21 Sale." All contraband cigarettes in the possession of a

22 retailer remain subject to forfeiture under the provisions of

23 this Act.

24 Any retailer who knowingly possesses packages of

25 cigarettes with a counterfeit stamp with intent to sell is

26 guilty of a Class 2 felony. Any retailer who knowingly

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1 possesses unstamped packages of cigarettes with intent to sell

2 is guilty of a Class 4 felony. A retailer shall not be liable

3 for unknowingly possessing, selling, or distributing to

4 consumers cigarettes that contain an old stamp if the correct

5 tax was collected at the point of sale and the cigarettes were

6 obtained from a distributor licensed under this Act.

7 (Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)

8 Section 20. The Tobacco Products Tax Act of 1995 is amended

9 by changing Sections 10-5, 10-20, 10-25, 10-35, and 10-50 and

10 by adding Sections 10-21, 10-22, 10-37, and 10-53 as follows:

11 (35 ILCS 143/10-5)

12 Sec. 10-5. Definitions. For purposes of this Act:

13 "Business" means any trade, occupation, activity, or

14 enterprise engaged in, at any location whatsoever, for the

15 purpose of selling tobacco products.

16 "Cigarette" has the meaning ascribed to the term in Section

17 1 of the Cigarette Tax Act.

18 "Contraband little cigar" means:

19 (1) packages of little cigars containing 20 or 25

20 little cigars that do not bear a required tax stamp under

21 this Act;

22 (2) packages of little cigars containing 20 or 25

23 little cigars that bear a fraudulent, imitation, or

24 counterfeit tax stamp;

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1 (3) packages of little cigars containing 20 or 25

2 little cigars that are improperly tax stamped, including

3 packages of little cigars that bear only a tax stamp of

4 another state or taxing jurisdiction; or

5 (4) packages of little cigars containing other than 20

6 or 25 little cigars in the possession of a distributor,

7 retailer or wholesaler, unless the distributor, retailer,

8 or wholesaler possesses, or produces within the time frame

9 provided in Section 10-27 or 10-28 of this Act, an invoice

10 from a stamping distributor, distributor, or wholesaler

11 showing that the tax on the packages has been or will be

12 paid.

13 "Correctional Industries program" means a program run by a

14 State penal institution in which residents of the penal

15 institution produce tobacco products for sale to persons

16 incarcerated in penal institutions or resident patients of a

17 State operated mental health facility.

18 "Department" means the Illinois Department of Revenue.

19 "Distributor" means any of the following:

20 (1) Any manufacturer or wholesaler in this State

21 engaged in the business of selling tobacco products who

22 sells, exchanges, or distributes tobacco products to

23 retailers or consumers in this State.

24 (2) Any manufacturer or wholesaler engaged in the

25 business of selling tobacco products from without this

26 State who sells, exchanges, distributes, ships, or

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1 transports tobacco products to retailers or consumers

2 located in this State, so long as that manufacturer or

3 wholesaler has or maintains within this State, directly or

4 by subsidiary, an office, sales house, or other place of

5 business, or any agent or other representative operating

6 within this State under the authority of the person or

7 subsidiary, irrespective of whether the place of business

8 or agent or other representative is located here

9 permanently or temporarily.

10 (3) Any retailer who receives tobacco products on which

11 the tax has not been or will not be paid by another

12 distributor.

13 "Distributor" does not include any person, wherever

14 resident or located, who makes, manufactures, or fabricates

15 tobacco products as part of a Correctional Industries program

16 for sale to residents incarcerated in penal institutions or

17 resident patients of a State operated mental health facility.

18 "Little cigar" means and includes any roll, made wholly or

19 in part of tobacco, where such roll has an integrated cellulose

20 acetate filter and weighs less than 4 pounds per thousand and

21 the wrapper or cover of which is made in whole or in part of

22 tobacco.

23 "Manufacturer" means any person, wherever resident or

24 located, who manufactures and sells tobacco products, except a

25 person who makes, manufactures, or fabricates tobacco products

26 as a part of a Correctional Industries program for sale to

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1 persons incarcerated in penal institutions or resident

2 patients of a State operated mental health facility.

3 Beginning on January 1, 2013, "moist snuff" means any

4 finely cut, ground, or powdered tobacco that is not intended to

5 be smoked, but shall not include any finely cut, ground, or

6 powdered tobacco that is intended to be placed in the nasal

7 cavity.

8 "Person" means any natural individual, firm, partnership,

9 association, joint stock company, joint venture, limited

10 liability company, or public or private corporation, however

11 formed, or a receiver, executor, administrator, trustee,

12 conservator, or other representative appointed by order of any

13 court.

14 "Place of business" means and includes any place where

15 tobacco products are sold or where tobacco products are

16 manufactured, stored, or kept for the purpose of sale or

17 consumption, including any vessel, vehicle, airplane, train,

18 or vending machine.

19 "Retailer" means any person in this State engaged in the

20 business of selling tobacco products to consumers in this

21 State, regardless of quantity or number of sales.

22 "Sale" means any transfer, exchange, or barter in any

23 manner or by any means whatsoever for a consideration and

24 includes all sales made by persons.

25 "Stamp" or "stamps" mean the indicia required to be affixed

26 on a package of little cigars that evidence payment of the tax

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1 on packages of little cigars containing 20 or 25 little cigars

2 under Section 10-10 of this Act. These stamps shall be the same

3 stamps used for cigarettes under the Cigarette Tax Act.

4 "Stamping distributor" means a distributor licensed under

5 this Act and also licensed as a distributor under the Cigarette

6 Tax Act or Cigarette Use Tax Act.

7 "Tobacco products" means any cigars, including little

8 cigars; cheroots; stogies; periques; granulated, plug cut,

9 crimp cut, ready rubbed, and other smoking tobacco; snuff

10 (including moist snuff) or snuff flour; cavendish; plug and

11 twist tobacco; fine-cut and other chewing tobaccos; shorts;

12 refuse scraps, clippings, cuttings, and sweeping of tobacco;

13 and other kinds and forms of tobacco, prepared in such manner

14 as to be suitable for chewing or smoking in a pipe or

15 otherwise, or both for chewing and smoking; but does not

16 include cigarettes as defined in Section 1 of the Cigarette Tax

17 Actor tobacco purchased for the manufacture of cigarettes by

18 cigarette distributors and manufacturers defined in the

19 Cigarette Tax Act and persons who make, manufacture, or

20 fabricate cigarettes as a part of a Correctional Industries

21 program for sale to residents incarcerated in penal

22 institutions or resident patients of a State operated mental

23 health facility.

24 "Wholesale price" means the established list price for

25 which a manufacturer sells tobacco products to a distributor,

26 before the allowance of any discount, trade allowance, rebate,

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1 or other reduction. In the absence of such an established list

2 price, the manufacturer's invoice price at which the

3 manufacturer sells the tobacco product to unaffiliated

4 distributors, before any discounts, trade allowances, rebates,

5 or other reductions, shall be presumed to be the wholesale

6 price.

7 "Wholesaler" means any person, wherever resident or

8 located, engaged in the business of selling tobacco products to

9 others for the purpose of resale. "Wholesaler", when used in

10 this Act, does not include a person licensed as a distributor

11 under Section 10-20 of this Act unless expressly stated in this

12 Act.

13 (Source: P.A. 97-688, eff. 6-14-12; 98-273, eff. 8-9-13.)

14 (35 ILCS 143/10-20)

15 Sec. 10-20. Distributor's Licenses. It shall be unlawful

16 for any person to engage in business as a distributor of

17 tobacco products within the meaning of this Act without first

18 having obtained a license to do so from the Department.

19 Application for that license shall be made to the Department in

20 a form prescribed and furnished by the Department. Each

21 applicant for a license shall furnish to the Department on a

22 form, signed and verified by the applicant, the following

23 information:

24 (1) The name of the applicant.

25 (2) The address of the location at which the applicant

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1 proposes to engage in business as a distributor of tobacco

2 products.

3 (3) Other information the Department may reasonably

4 require.

5 Except as otherwise provided in this Section, every

6 applicant who is required to procure a distributor's license

7 shall file with his or her application a joint and several

8 bond. The bond shall be executed to the Department of Revenue,

9 with good and sufficient surety or sureties residing or

10 licensed to do business within the State of Illinois,

11 conditioned upon the true and faithful compliance by the

12 licensee with all of the provisions of this Act. The Department

13 shall fix the amount of the bond for each applicant, taking

14 into consideration the amount of money expected to become due

15 from the applicant under this Act. The amount of bond required

16 by the Department shall be an amount that, in its opinion, will

17 protect the State of Illinois against failure to pay the amount

18 that may become due from the applicant under this Act, but the

19 amount of the security required by the Department shall not

20 exceed 3 times the amount of the applicant's average monthly

21 tax liability, or $50,000, whichever amount is lower. The bond,

22 a reissue, or a substitute shall be kept in full force and

23 effect during the entire period covered by the license. A

24 separate application for license shall be made, and bond filed,

25 for each place of business at which a person who is required to

26 procure a distributor's license proposes to engage in business

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1 as a distributor under this Act.

2 The Department, upon receipt of an application and bond in

3 proper form, shall issue to the applicant a license, in a form

4 prescribed by the Department, which shall permit the applicant

5 to whom it is issued to engage in business as a distributor at

6 the place shown on his or her application. The license shall be

7 issued by the Department without charge or cost to the

8 applicant. No license issued under this Act is transferable or

9 assignable. The license shall be conspicuously displayed in the

10 place of business conducted by the licensee under the license.

11 The bonding requirement in this Section does not apply to

12 an applicant for a distributor's license who is already bonded

13 under the Cigarette Tax Act or the Cigarette Use Tax Act.

14 Licenses issued by the Department under this Act shall be valid

15 for a period not to exceed one year after issuance unless

16 sooner revoked, canceled, or suspended as provided in this Act.

17 No license shall be issued to any person who is in default

18 to the State of Illinois for moneys due under this Act or any

19 other tax Act administered by the Department.

20 The Department may, in its discretion, upon application,

21 authorize the payment of the tax imposed under Section 10-10 by

22 any distributor or manufacturer not otherwise subject to the

23 tax imposed under this Act who, to the satisfaction of the

24 Department, furnishes adequate security to ensure payment of

25 the tax. The distributor or manufacturer shall be issued,

26 without charge, a license to remit the tax. When so authorized,

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1 it shall be the duty of the distributor or manufacturer to

2 remit the tax imposed upon the wholesale price of tobacco

3 products sold or otherwise disposed of to retailers or

4 consumers located in this State, in the same manner and subject

5 to the same requirements as any other distributor or

6 manufacturer licensed under this Act.

7 The Department may revoke, suspend, or cancel the license

8 of a distributor of roll-your-own tobacco (as that term is used

9 in Section 10 of the Tobacco Product Manufacturers' Escrow Act)

10 under this Act if the tobacco product manufacturer, as defined

11 in Section 10 of the Tobacco Product Manufacturers' Escrow Act,

12 that made or sold the roll-your-own tobacco has failed to

13 become a participating manufacturer, as defined in subdivision

14 (a)(1) of Section 15 of the Tobacco Product Manufacturers'

15 Escrow Act, or has failed to create a qualified escrow fund for

16 any roll-your-own tobacco manufactured by the tobacco product

17 manufacturer and sold in this State or otherwise failed to

18 bring itself into compliance with subdivision (a)(2) of Section

19 15 of the Tobacco Product Manufacturers' Escrow Act.

20 Any person aggrieved by any decision of the Department

21 under this Section may, within 20 days after notice of that

22 decision, protest and request a hearing, whereupon the

23 Department must give notice to that person of the time and

24 place fixed for the hearing and must hold a hearing in

25 conformity with the provisions of this Act and then issue its

26 final administrative decision in the matter to that person. In

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1 the absence of such a protest within 20 days, the Department's

2 decision becomes final without any further determination being

3 made or notice given.

4 (Source: P.A. 92-231, eff. 8-2-01; 92-737, eff. 7-25-02.)

5 (35 ILCS 143/10-21 new)

6 Sec. 10-21. Retailer's license. Beginning on January 1,

7 2016, no person may engage in business as a retailer of tobacco

8 products in this State without first having obtained a license

9 from the Department. Application for license shall be made to

10 the Department, by electronic means, in a form prescribed by

11 the Department. Each applicant for a license under this Section

12 shall furnish to the Department, in an electronic format

13 established by the Department, the following information:

14 (1) the name and address of the applicant;

15 (2) the address of the location at which the applicant

16 proposes to engage in business as a retailer of tobacco

17 products in this State;

18 (3) such other additional information as the

19 Department may lawfully require by its rules and

20 regulations.

21 The annual license fee payable to the Department for each

22 retailer's license shall be $75. The fee will be deposited into

23 the Tax Compliance and Administration Fund and shall be used

24 for the cost of tobacco retail inspection and contraband

25 tobacco and tobacco smuggling with at least two-thirds of the

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1 money being used for contraband tobacco and tobacco smuggling

2 operations and enforcement.

3 Each applicant for license shall pay such fee to the

4 Department at the time of submitting its application for

5 license to the Department. The Department shall require an

6 applicant for a license under this Section to electronically

7 file and pay the fee.

8 A separate annual license fee shall be paid for each place

9 of business at which a person who is required to procure a

10 retailer's license under this Section proposes to engage in

11 business as a retailer in Illinois under this Act.

12 The following are ineligible to receive a retailer's

13 license under this Act:

14 (1) a person who has been convicted of a felony under

15 any federal or State law for smuggling cigarettes or

16 tobacco products or tobacco tax evasion, if the Department,

17 after investigation and a hearing if requested by the

18 applicant, determines that such person has not been

19 sufficiently rehabilitated to warrant the public trust;

20 and

21 (2) a corporation, if any officer, manager or director

22 thereof, or any stockholder or stockholders owning in the

23 aggregate more than 5% of the stock of such corporation,

24 would not be eligible to receive a license under this Act

25 for any reason.

26 The Department, upon receipt of an application and license

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1 fee, in proper form, from a person who is eligible to receive a

2 retailer's license under this Act, shall issue to such

3 applicant a license in form as prescribed by the Department,

4 which license shall permit the applicant to which it is issued

5 to engage in business as a retailer under this Act at the place

6 shown in his application. All licenses issued by the Department

7 under this Section shall be valid for a period not to exceed

8 one year after issuance unless sooner revoked, canceled or

9 suspended as provided in this Act. No license issued under this

10 Section is transferable or assignable. Such license shall be

11 conspicuously displayed in the place of business conducted by

12 the licensee in Illinois under such license. A person who

13 obtains a license as a retailer who ceases to do business as

14 specified in the license, or who never commenced business, or

15 who obtains a distributor's license, or whose license is

16 suspended or revoked, shall immediately surrender the license

17 to the Department. The Department shall not issue a license to

18 a retailer unless the retailer is also validly registered under

19 the Retailers Occupation Tax Act.

20 A retailer as defined under this Act need not obtain an

21 additional license under this Act, but shall be deemed to be

22 sufficiently licensed by virtue of his being properly licensed

23 as a retailer under Section 4g of the Cigarette Tax Act.

24 Any person aggrieved by any decision of the Department

25 under this subsection may, within 30 days after notice of the

26 decision, protest and request a hearing. Upon receiving a

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1 request for a hearing, the Department shall give notice to the

2 person requesting the hearing of the time and place fixed for

3 the hearing and shall hold a hearing in conformity with the

4 provisions of this Act and then issue its final administrative

5 decision in the matter to that person. In the absence of a

6 protest and request for a hearing within 30 days, the

7 Department's decision shall become final without any further

8 determination being made or notice given.

9 (35 ILCS 143/10-22 new)

10 Sec. 10-22. Purchases of tobacco products by licensed

11 retailers. A person who possesses a retailer's license under

12 Section 10-21 of this Act shall obtain tobacco products for

13 sale only from a licensed distributor or licensed secondary

14 distributor.

15 (35 ILCS 143/10-25)

16 Sec. 10-25. License actions.

17 (a)The Department may, after notice and a hearing, revoke,

18 cancel, or suspend the license of any distributor or retailer

19 who violates any of the provisions of this Act. The notice

20 shall specify the alleged violation or violations upon which

21 the revocation, cancellation, or suspension proceeding is

22 based.

23 (b) The Department may revoke, cancel, or suspend the

24 license of any distributor for a violation of the Tobacco

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1 Product Manufacturers' Escrow Enforcement Act as provided in

2 Section 20 of that Act.

3 (c) If the retailer has a training program that facilitates

4 compliance with minimum-age tobacco laws, the Department shall

5 suspend for 3 days the license of that retailer for a fourth or

6 subsequent violation of the Prevention of Tobacco Use by Minors

7 and Sale and Distribution of Tobacco Products Act, as provided

8 in subsection (a) of Section 2 of that Act. For the purposes of

9 this Section, any violation of subsection (a) of Section 2 of

10 the Prevention of Tobacco Use by Minors and Sale and

11 Distribution of Tobacco Products Act occurring at the

12 retailer's licensed location, during a 24-month period, shall

13 be counted as a violation against the retailer.

14 If the retailer does not have a training program that

15 facilitates compliance with minimum-age tobacco laws, the

16 Department shall suspend for 3 days the license of that

17 retailer for a second violation of the Prevention of Tobacco

18 Use by Minors and Sale and Distribution of Tobacco Products

19 Act, as provided in subsection (a-5) of Section 2 of that Act.

20 If the retailer does not have a training program that

21 facilitates compliance with minimum-age tobacco laws, the

22 Department shall suspend for 7 days the license of that

23 retailer for a third violation of the Prevention of Tobacco Use

24 by Minors and Sale and Distribution of Tobacco Products Act, as

25 provided in subsection (a-5) of Section 2 of that Act.

26 If the retailer does not have a training program that

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1 facilitates compliance with minimum-age tobacco laws, the

2 Department shall suspend for 30 days the license of a retailer

3 for a fourth or subsequent violation of the Prevention of

4 Tobacco Use by Minors and Sale and Distribution of Tobacco

5 Products Act, as provided in subsection (a-5) of Section 2 of

6 that Act.

7 A training program that facilitates compliance with

8 minimum-age tobacco laws must include at least the following

9 elements: (i) it must explain that only individuals displaying

10 valid identification demonstrating that they are 18 years of

11 age or older shall be eligible to purchase cigarettes or

12 tobacco products; (ii) it must explain where a clerk can check

13 identification for a date of birth; and (iii) it must explain

14 the penalties that a clerk and retailer are subject to for

15 violations of the Prevention of Tobacco Use by Minors and Sale

16 and Distribution of Tobacco Products Act.

17 (d) The Department may, by application to any circuit

18 court, obtain an injunction restraining any person who engages

19 in business as a distributor of tobacco products without a

20 license (either because his or her license has been revoked,

21 canceled, or suspended or because of a failure to obtain a

22 license in the first instance) from engaging in that business

23 until that person, as if that person were a new applicant for a

24 license, complies with all of the conditions, restrictions, and

25 requirements of Section 10-20 of this Act and qualifies for and

26 obtains a license. Refusal or neglect to obey the order of the

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1 court may result in punishment for contempt.

2 (Source: P.A. 92-737, eff. 7-25-02.)

3 (35 ILCS 143/10-35)

4 Sec. 10-35. Record keeping.

5 (a)Every distributor, as defined in Section 10-5, shall

6 keep complete and accurate records of tobacco products held,

7 purchased, manufactured, brought in or caused to be brought in

8 from without the State, and tobacco products sold, or otherwise

9 disposed of, and shall preserve and keep all invoices, bills of

10 lading, sales records, and copies of bills of sale, the

11 wholesale price for tobacco products sold or otherwise disposed

12 of, an inventory of tobacco products prepared as of December 31

13 of each year or as of the last day of the distributor's fiscal

14 year if he or she files federal income tax returns on the basis

15 of a fiscal year, and other pertinent papers and documents

16 relating to the manufacture, purchase, sale, or disposition of

17 tobacco products. Every sales invoice issued by a licensed

18 distributor to a retailer in this State shall contain the

19 distributor's Tobacco Products License number.

20 (b) Every retailer, as defined in Section 10-5, shall keep

21 complete and accurate records of tobacco products held,

22 purchased, sold, or otherwise disposed of, and shall preserve

23 and keep all invoices, bills of lading, sales records, and

24 copies of bills of sale, returns and other pertinent papers and

25 documents relating to the purchase, sale, or disposition of

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1 tobacco products. Such records need not be maintained on the

2 licensed premises, but must be maintained in the State of

3 Illinois; however, if access is available electronically, the

4 records may be maintained out of state. However, all original

5 invoices or copies thereof covering purchases of tobacco

6 products must be retained on the licensed premises for a period

7 of 90 days after such purchase, unless the Department has

8 granted a waiver in response to a written request in cases

9 where records are kept at a central business location within

10 the State of Illinois or in cases where records that are

11 available electronically are maintained out of state.

12 (c)Books, records, papers, and documents that are required

13 by this Act to be kept shall, at all times during the usual

14 business hours of the day, be subject to inspection by the

15 Department or its duly authorized agents and employees. The

16 books, records, papers, and documents for any period with

17 respect to which the Department is authorized to issue a notice

18 of tax liability shall be preserved until the expiration of

19 that period.

20 (Source: P.A. 89-21, eff. 6-6-95.)

21 (35 ILCS 143/10-37 new)

22 Sec. 10-37. Proof of payment of tax imposed by this Act.

23 Every licensed distributor of tobacco products in this State is

24 required to show proof of the tax having been paid as required

25 by this Act by displaying its Tobacco Products License number

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1 on every sales invoice issued to a retailer in this State. No

2 retailer shall possess tobacco products without either a proper

3 invoice indicating that the tobacco products tax was paid by a

4 distributor for the tobacco products in the retailer's

5 possession or other proof that the tax was paid by the retailer

6 if it has purchased tobacco products on which tax has not been

7 paid as required by this Act. Failure to comply with the

8 provisions of this paragraph may be grounds for revocation of a

9 distributor's or retailer's license in accordance with Section

10 10-25 of this Act or Section 6 of the Cigarette Tax Act. In

11 addition, the Department may impose a civil penalty not to

12 exceed $1,000 for each violation, which shall be deposited into

13 the Tax Compliance and Administration Fund.

14 (35 ILCS 143/10-50)

15 Sec. 10-50. Violations and penalties. When the amount due

16 is under $300, any distributor who fails to file a return,

17 willfully ~~wilfully~~fails or refuses to make any payment to the

18 Department of the tax imposed by this Act, or files a

19 fraudulent return, or any officer or agent of a corporation

20 engaged in the business of distributing tobacco products to

21 retailers and consumers located in this State who signs a

22 fraudulent return filed on behalf of the corporation, or any

23 accountant or other agent who knowingly enters false

24 information on the return of any taxpayer under this Act is

25 guilty of a Class 4 felony.

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1 Any person who violates any provision of Sections ~~Section~~

2 10-20, 10-21, or 10-22of this Act, fails to keep books and

3 records as required under this Act, or willfully ~~wilfully~~

4 violates a rule or regulation of the Department for the

5 administration and enforcement of this Act is guilty of a Class

6 4 felony. A person commits a separate offense on each day that

7 he or she engages in business in violation of Sections ~~Section~~

8 10-20, 10-21, or 10-22of this Act.

9 When the amount due is under $300, any person who accepts

10 money that is due to the Department under this Act from a

11 taxpayer for the purpose of acting as the taxpayer's agent to

12 make the payment to the Department, but who fails to remit the

13 payment to the Department when due, is guilty of a Class 4

14 felony.

15 Any person who violates any provision of Sections 10-20,

16 10-21 and 10-22 of this Act, fails to keep books and records as

17 required under this Act, or willfully violates a rule or

18 regulation of the Department for the administration and

19 enforcement of this Act is guilty of a business offense and may

20 be fined up to $5,000. A person commits a separate offense on

21 each day that he or she engages in business in violation of

22 Sections 10-20, 10-21 and 10-22 of this Act.

23 When the amount due is $300 or more, any distributor who

24 files, or causes to be filed, a fraudulent return, or any

25 officer or agent of a corporation engaged in the business of

26 distributing tobacco products to retailers and consumers

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1 located in this State who files or causes to be filed or signs

2 or causes to be signed a fraudulent return filed on behalf of

3 the corporation, or any accountant or other agent who knowingly

4 enters false information on the return of any taxpayer under

5 this Act is guilty of a Class 3 felony.

6 When the amount due is $300 or more, any person engaged in

7 the business of distributing tobacco products to retailers and

8 consumers located in this State who fails to file a return,

9 willfully ~~wilfully~~ fails or refuses to make any payment to the

10 Department of the tax imposed by this Act, or accepts money

11 that is due to the Department under this Act from a taxpayer

12 for the purpose of acting as the taxpayer's agent to make

13 payment to the Department but fails to remit such payment to

14 the Department when due is guilty of a Class 3 felony.

15 When the amount due is under $300, any retailer who fails

16 to file a return, willfully fails or refuses to make any

17 payment to the Department of the tax imposed by this Act, or

18 files a fraudulent return, or any officer or agent of a

19 corporation engaged in the retail business of selling tobacco

20 products to purchasers of tobacco products for use and

21 consumption located in this State who signs a fraudulent return

22 filed on behalf of the corporation, or any accountant or other

23 agent who knowingly enters false information on the return of

24 any taxpayer under this Act is guilty of a Class A misdemeanor

25 for a first offense and a Class 4 felony for each subsequent

26 offense.

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1 When the amount due is $300 or more, any retailer who fails

2 to file a return, willfully fails or refuses to make any

3 payment to the Department of the tax imposed by this Act, or

4 files a fraudulent return, or any officer or agent of a

5 corporation engaged in the retail business of selling tobacco

6 products to purchasers of tobacco products for use and

7 consumption located in this State who signs a fraudulent return

8 filed on behalf of the corporation, or any accountant or other

9 agent who knowingly enters false information on the return of

10 any taxpayer under this Act is guilty of a Class 4 felony.

11 Any person whose principal place of business is in this

12 State and who is charged with a violation under this Section

13 shall be tried in the county where his or her principal place

14 of business is located unless he or she asserts a right to be

15 tried in another venue. If the taxpayer does not have his or

16 her principal place of business in this State, however, the

17 hearing must be held in Sangamon County unless the taxpayer

18 asserts a right to be tried in another venue.

19 Any taxpayer or agent of a taxpayer who with the intent to

20 defraud purports to make a payment due to the Department by

21 issuing or delivering a check or other order upon a real or

22 fictitious depository for the payment of money, knowing that it

23 will not be paid by the depository, is guilty of a deceptive

24 practice in violation of Section 17-1 of the Criminal Code of

25 2012.

26 A prosecution for a violation described in this Section may

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1 be commenced within 3 years after the commission of the act

2 constituting the violation.

3 (Source: P.A. 97-1150, eff. 1-25-13.)

4 (35 ILCS 143/10-53 new)

5 Sec. 10-53. Acting as a retailer of tobacco products

6 without a license. Any person who knowingly acts as a retailer

7 of tobacco products in this State without first having obtained

8 a license to do so in compliance with Section 10-21 of this Act

9 or a license in compliance with Section 4g of the Cigarette Tax

10 Act shall be guilty of a Class A misdemeanor for the first

11 offense and a Class 4 felony for a second or subsequent

12 offense. Each day such person operates as a retailer without a

13 license constitutes a separate offense.

14 Section 25. The Prevention of Tobacco Use by Minors and

15 Sale and Distribution of Tobacco Products Act is amended by

16 changing Sections 1 and 2 as follows:

17 (720 ILCS 675/1) (from Ch. 23, par. 2357)

18 Sec. 1. Prohibition on sale to and possession of tobacco by

19 minors; prohibition on the distribution of tobacco samples to

20 any person; use of identification cards; vending machines;

21 lunch wagons; out-of-package sales.

22 (a) No minor under 18 years of age shall buy any tobacco

23 product. No person shall sell, buy for, distribute samples of

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1 or furnish any tobacco product to any minor under 18 years of

2 age.

3 (a-5) No minor under 16 years of age may sell any tobacco

4 product at a retail establishment selling tobacco products.

5 This subsection does not apply to a sales clerk in a

6 family-owned business which can prove that the sales clerk is

7 in fact a son or daughter of the owner.

8 (a-6) No minor under 18 years of age in the furtherance or

9 facilitation of obtaining any tobacco product shall display or

10 use a false or forged identification card or transfer, alter,

11 or deface an identification card.

12 (a-7) No minor under 18 years of age shall possess any

13 cigar, cigarette, smokeless tobacco, or tobacco in any of its

14 forms.

15 (a-8) A person shall not distribute without charge samples

16 of any tobacco product to any other person, regardless of age:

17 (1) within a retail establishment selling tobacco

18 products, unless the retailer has verified the purchaser's

19 age with a government issued identification;

20 (2) from a lunch wagon; or

21 (3) on a public way as a promotion or advertisement of

22 a tobacco manufacturer or tobacco product.

23 This subsection (a-8) does not apply to the distribution of

24 a tobacco product sample in any adult-only facility.

25 (a-9) For the purpose of this Section:

26 "Adult-only facility means a facility or restricted

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1 area (whether open-air or enclosed) where the operator

2 ensures or has a reasonable basis to believe (such as by

3 checking identification as required under State law, or by

4 checking the identification of any person appearing to be

5 under the age of 27) that no person under legal age is

6 present. A facility or restricted area need not be

7 permanently restricted to persons under legal age to

8 constitute an adult-only facility, provided that the

9 operator ensures or has a reasonable basis to believe that

10 no person under legal age is present during the event or

11 time period in question.

12 "Lunch wagon" means a mobile vehicle designed and

13 constructed to transport food and from which food is sold

14 to the general public.

15 "Smokeless tobacco" means any tobacco products that

16 are suitable for dipping or chewing.

17 "Tobacco product" means any cigar, cigarette,

18 smokeless tobacco, or tobacco in any of its forms.

19 (b) Tobacco products listed in this Section may be sold

20 through a vending machine only if such tobacco products are not

21 placed together with any non-tobacco product, other than

22 matches, in the vending machine and the vending machine is in

23 any of the following locations:

24 (1) (Blank).

25 (2) Places to which minors under 18 years of age are

26 not permitted access.

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1 (3) Places where alcoholic beverages are sold and

2 consumed on the premises and vending machine operation is

3 under the direct supervision of the owner or manager.

4 (4) (Blank).

5 (5) Places where the vending machine can only be

6 operated by the owner or an employee over age 18 either

7 directly or through a remote control device if the device

8 is inaccessible to all customers.

9 (c) (Blank).

10 (d) The sale or distribution by any person of a tobacco

11 product in this Section, including but not limited to a single

12 or loose cigarette, that is not contained within a sealed

13 container, pack, or package as provided by the manufacturer,

14 which container, pack, or package bears the health warning

15 required by federal law, is prohibited.

16 (e) It is not a violation of this Act for a person under 18

17 years of age to purchase or possess a cigar, cigarette,

18 smokeless tobacco or tobacco in any of its forms if the person

19 under the age of 18 purchases or is given the cigar, cigarette,

20 smokeless tobacco or tobacco in any of its forms from a retail

21 seller of tobacco products or an employee of the retail seller

22 pursuant to a plan or action to investigate, patrol, or

23 otherwise conduct a "sting operation" or enforcement action

24 against a retail seller of tobacco products or a person

25 employed by the retail seller of tobacco products or on any

26 premises authorized to sell tobacco products to determine if

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1 tobacco products are being sold or given to persons under 18

2 years of age if the "sting operation" or enforcement action is

3 approved by, conducted by, or conducted on behalf of the

4 Department of State Police, the county sheriff, a municipal

5 police department, the Department of Revenue, the Department of

6 Public Health, or a local health department. The results of any

7 sting operation or enforcement action, including the name of

8 the clerk, shall be provided to the retail seller within 7

9 business days.

10 (Source: P.A. 95-905, eff. 1-1-09; 96-179, eff. 8-10-09;

11 96-446, eff. 1-1-10; 96-1000, eff. 7-2-10.)

12 (720 ILCS 675/2) (from Ch. 23, par. 2358)

13 Sec. 2. Penalties.

14 (a) Any person who violates subsection (a) or (a-5) of

15 Section 1 or Section 1.5 of this Act is guilty of a petty

16 offense. For the first offense in a 24-month period, the person

17 shall be fined $200 if his or her employer has a training

18 program that facilitates compliance with minimum-age tobacco

19 laws. For the second offense in a 24-month period, the person

20 shall be fined $400 if his or her employer has a training

21 program that facilitates compliance with minimum-age tobacco

22 laws. For the third offense in a 24-month period, the person

23 shall be fined $600 if his or her employer has a training

24 program that facilitates compliance with minimum-age tobacco

25 laws. For the fourth or subsequent offense in a 24-month

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1 period, the person shall be fined $800 if his or her employer

2 has a training program that facilitates compliance with

3 minimum-age tobacco laws. For the purposes of this subsection,

4 the 24-month period shall begin with the person's first

5 violation of the Act. The penalties in this subsection are in

6 addition to any other penalties prescribed under the Cigarette

7 Tax Act and the Tobacco Products Tax Act of 1995.

8 (a-5) Any person who violates subsection (a) or (a-5) of

9 Section 1 or Section 1.5 of this Act is guilty of a petty

10 offense. For the first offense, the retailer shall be fined

11 $200 if it does not have a training program that facilitates

12 compliance with minimum-age tobacco laws. For the second

13 offense, the retailer shall be fined $400 if it does not have a

14 training program that facilitates compliance with minimum-age

15 tobacco laws. For the third offense, the retailer shall be

16 fined $600 if it does not have a training program that

17 facilitates compliance with minimum-age tobacco laws. For the

18 fourth or subsequent offense in a 24-month period, the retailer

19 shall be fined $800 if it does not have a training program that

20 facilitates compliance with minimum-age tobacco laws. For the

21 purposes of this subsection, the 24-month period shall begin

22 with the person's first violation of the Act. The penalties in

23 this subsection are in addition to any other penalties

24 prescribed under the Cigarette Tax Act and the Tobacco Products

25 Tax Act of 1995.

26 (a-6) For the purpose of this Act, a training program that

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1 facilitates compliance with minimum-age tobacco laws must

2 include at least the following elements: (i) it must explain

3 that only individuals displaying valid identification

4 demonstrating that they are 18 years of age or older shall be

5 eligible to purchase cigarettes or tobacco products; (ii) it

6 must explain where a clerk can check identification for a date

7 of birth; and (iii) it must explain the penalties that a clerk

8 and retailer are subject to for violations of the Prevention of

9 Tobacco Use by Minors and Sale and Distribution of Tobacco

10 Products Act.

11 ~~Any person who violates subsection (a), (a-5), or (a-6) of~~

12 ~~Section 1 or Section 1.5 of this Act is guilty of a petty~~

13 ~~offense and for the first offense shall be fined $200, $400 for~~

14 ~~the second offense in a 12-month period, and $600 for the third~~

15 ~~or any subsequent offense in a 12-month period.~~

16 (b) If a minor violates subsection (a-7) of Section 1 he or

17 she is guilty of a petty offense and the court may impose a

18 sentence of 25 ~~15~~hours of community serviceand ~~or~~ a fine of

19 $50 ~~$25~~ for a first violation. If a minor violates subsection

20 (a-6) of Section 1 he or she is guilty of a Class A

21 misdemeanor.

22 (c) A second violation by a minor of subsection (a-7) of

23 Section 1 that occurs within 12 months after the first

24 violation is punishable by a fine of $75 ~~$50~~ and 50~~25~~hours of

25 community service.

26 (d) A third or subsequent violation by a minor of

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1 subsection (a-7) of Section 1 that occurs within 12 months

2 after the first violation is punishable by a $200 ~~$100~~fine and

3 50 ~~30~~ hours of community service.

4 (e) Any second or subsequent violation not within the

5 12-month time period after the first violation is punishable as

6 provided for a first violation.

7 (f) If a minor is convicted of or placed on supervision for

8 a violation of subsection(a-6) or (a-7) of Section 1, the

9 court may, in its discretion, and upon recommendation by the

10 State's Attorney, order that minor and his or her parents or

11 legal guardian to attend a smoker's education or youth

12 diversion program if that program is available in the

13 jurisdiction where the offender resides. Attendance at a

14 smoker's education or youth diversion program shall be

15 time-credited against any community service time imposed for

16 any first violation of subsection (a-7) of Section 1. In

17 addition to any other penalty that the court may impose for a

18 violation of subsection (a-7) of Section 1, the court, upon

19 request by the State's Attorney, may in its discretion require

20 the offender to remit a fee for his or her attendance at a

21 smoker's education or youth diversion program.

22 (g) For purposes of this Section, "smoker's education

23 program" or "youth diversion program" includes, but is not

24 limited to, a seminar designed to educate a person on the

25 physical and psychological effects of smoking tobacco products

26 and the health consequences of smoking tobacco products that

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1 can be conducted with a locality's youth diversion program.

2 (h) All moneys collected as fines for violations of

3 subsection (a), (a-5), (a-6), or (a-7) of Section 1 shall be

4 distributed in the following manner:

5 (1) one-half of each fine shall be distributed to the

6 unit of local government or other entity that successfully

7 prosecuted the offender; and

8 (2) one-half shall be remitted to the State to be used

9 for enforcing this Act.

10 Any violation of subsection (a) or (a-5) of Section 1 or

11 Section 1.5 shall be reported to the Department of Revenue

12 within 7 business days.

13 (Source: P.A. 98-350, eff. 1-1-14.)

14 Section 99. Effective date. This Act takes effect January

15 1, 2016.".