Bill Text: IL HB3420 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Creates the Vapor Products Regulatory Act. Provides that on and after January 1, 2020 no person may engage in business as a retailer of vapor products in this State without first having obtained a vapor products retail license from the Department of Revenue. Provides that applications shall be made to the Department and submitted electronically with the name and address of the applicant, the address of the proposed retailer of vapor products in this State, and any other information the Department may lawfully require. Provides that the annual license fee shall be $150. Provides that specified felons, corporations, and persons are ineligible to receive a retailer's license under the Act. Provides that acting as a retailer without a license is a punishable offense. Requires retailers to keep records for at least 3 years. Prohibits the distribution of vapor products to, and possession by, persons under minimum legal age. Defines "person under minimum legal age". Provides penalties for distribution of vapor products to, and possession by, persons under minimum legal age. Amends the Prevention of Tobacco Use by Minors and Sale and Distribution of Tobacco Products Act. Excludes vapor products from the definition of "alternative nicotine product". Amends the State Finance Act. Creates the Vapor Products Compliance Fund. Effective January 1, 2020.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3420 Detail]

Download: Illinois-2019-HB3420-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3420

Introduced , by Rep. Kathleen Willis

SYNOPSIS AS INTRODUCED:
New Act
30 ILCS 105/5.891 new
720 ILCS 675/1.5

Creates the Vapor Products Regulatory Act. Provides that on and after January 1, 2020 no person may engage in business as a retailer of vapor products in this State without first having obtained a vapor products retail license from the Department of Revenue. Provides that applications shall be made to the Department and submitted electronically with the name and address of the applicant, the address of the proposed retailer of vapor products in this State, and any other information the Department may lawfully require. Provides that the annual license fee shall be $150. Provides that specified felons, corporations, and persons are ineligible to receive a retailer's license under the Act. Provides that acting as a retailer without a license is a punishable offense. Requires retailers to keep records for at least 3 years. Prohibits the distribution of vapor products to, and possession by, persons under minimum legal age. Defines "person under minimum legal age". Provides penalties for distribution of vapor products to, and possession by, persons under minimum legal age. Amends the Prevention of Tobacco Use by Minors and Sale and Distribution of Tobacco Products Act. Excludes vapor products from the definition of "alternative nicotine product". Amends the State Finance Act. Creates the Vapor Products Compliance Fund. Effective January 1, 2020.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

HB3420LRB101 10900 CPF 56047 b
1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the Vapor
5Products Regulatory Act.
6 Section 5. Definitions. In this Act:
7 "Adult-only facility" means a facility or restricted area
8(whether open-air or enclosed) where the operator ensures or
9has a reasonable basis to believe (such as by checking
10identification as required under State law, or by checking the
11identification of any person appearing to be under the age of
1227) that no person under minimum legal age is present. A
13facility or restricted area need not be permanently restricted
14to persons under minimum legal age to constitute an adult-only
15facility, provided that the operator ensures or has a
16reasonable basis to believe that no person under minimum legal
17age is present during the event or time period in question.
18 "Age restricted area" means a signed designated area in a
19retail establishment to which persons under minimum legal age
20are not permitted access unless accompanied by a parent or
21legal guardian.
22 "Department" means the Department of Revenue.
23 "Electronic nicotine delivery system" means a powered

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1vaporizer, and any component parts of a powered vaporizer
2intended to be used in the powered vaporizer, that converts
3e-liquid into vapor which is intended for inhalation.
4 "E-liquid" means a substance that contains nicotine and
5flavoring, substances, or other additives and is intended for
6use in a vapor product.
7 "Person" means any natural individual, firm, partnership,
8association, joint stock company, joint adventure, or public or
9private corporation, however formed, limited liability
10company, or a receiver, executor, administrator, trustee,
11conservator, or other representative appointed by order of any
12court.
13 "Person under minimum legal age" means:
14 (a) from January 1, 2020 until December 31, 2020, a
15 person who is not 19 years of age or older;
16 (b) from January 1, 2021 until December 31, 2021, a
17 person who is not 20 years of age or older; and
18 (c) on and after January 1, 2022, a person who is 21
19 years of age or older.
20 "Records" means all data maintained by the retailer of
21vapor products, including data on paper, microfilm,
22microfiche, or any type of machine-sensible data compilation.
23 "Retailer of vapor products" means any person engaged in
24the business of selling e-liquids or vapor products to
25consumers in this State for use or consumption and not for
26resale in any form, for valuable consideration, regardless of

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1amount, quantity, or number of sales. "Retailer of vapor
2products" does not include any person or business subject to
3the Cigarette Tax Act, the Tobacco Products Tax Act of 1995,
4the Prevention of Tobacco Use By Minors and Sale and
5Distribution of Tobacco Products Act, the Display of Tobacco
6Products Act, or the Compassionate Use of Medical Cannabis
7Pilot Program Act.
8 "Sale" means any transfer, exchange, or barter in any
9manner or by any means whatsoever for consideration and
10includes all sales made by persons.
11 "Vapor product" means an e-liquid or electronic nicotine
12delivery system as defined in this Act.
13 Section 10. Retailer's license; fee.
14 (a) On and after January 1, 2020 no person may engage in
15business as a retailer of vapor products in this State without
16first having obtained a vapor products retail license from the
17Department. Applications for a license shall be made to the
18Department, by electronic means, in a form prescribed by the
19Department. Each applicant for a license under this Section
20shall furnish to the Department, in an electronic format
21established by the Department, the following information:
22 (1) the name and address of the applicant;
23 (2) the address of the location at which the applicant
24 proposes to engage in business as a retailer of vapor
25 products in this State; and

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1 (3) any other additional information as the Department
2 may lawfully require by its rules.
3 (b) The annual license fee payable to the Department for
4each retailer's license shall be $150. Seventy-five dollars of
5the fee shall be deposited into the Tax Compliance and
6Administration Fund and shall be used by the Department for the
7cost of administration and enforcement of this Act.
8Seventy-five dollars of the fee shall be deposited into the
9Vapor Products Compliance Fund and shall be used by the
10Department of Human Services for unannounced investigations of
11retailers licensed under this Act.
12 An applicant for a license shall pay the fee to the
13Department at the time of submitting its application for
14license to the Department. The Department shall require an
15applicant for a license under this Section to electronically
16file and pay the fee.
17 (c) The following are ineligible to receive a retailer's
18license under this Act:
19 (1) a person who has been convicted of a felony related
20 to the illegal transportation, sale, or distribution of any
21 age-restricted product or item under any federal or State
22 law, if the Department, after investigation and a hearing
23 if requested by the applicant, determines that the person
24 has not been sufficiently rehabilitated to warrant the
25 public trust;
26 (2) a corporation, if any officer, manager, or director

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1 of the corporation, or any stockholder or stockholders
2 owning in the aggregate more than 5% of the stock of the
3 corporation, would not be eligible to receive a license
4 under this Act for any reason; or
5 (3) a person who has been convicted of a violation of
6 the federal Trademark Act of 1946 related to the sale of
7 vapor products in the United States.
8 (d) The Department, upon receipt of an application and
9license fee, in proper form, from a person who is eligible to
10receive a retailer's license under this Act, shall issue to the
11applicant a license in form as prescribed by the Department,
12which license shall permit the applicant to which it is issued
13to engage in business as a retailer of vapor products under
14this Act at the place shown on his or her application. All
15licenses issued by the Department under this Section shall be
16valid for a period not to exceed one year after issuance unless
17sooner revoked, canceled, or suspended as provided in this Act.
18No license issued under this Section is transferable or
19assignable. The license shall be conspicuously displayed in the
20place of business conducted by the licensee in this State under
21the license. A person who obtains a license as a retailer of
22vapor products who ceases to do business as specified in the
23license, or who never commenced business, or whose license is
24suspended or revoked, shall immediately surrender the license
25to the Department. The Department shall not issue a license to
26a retailer of vapor products unless the retailer of vapor

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1products is also validly registered under the Retailers'
2Occupation Tax Act. A person who obtains a license as a
3retailer of vapor products who ceases to do business as
4specified in the license, or who never commenced business, or
5whose license is suspended or revoked, shall immediately
6surrender the license to the Department.
7 (e) Any person aggrieved by any decision of the Department
8under this Section may, within 30 days after notice of the
9decision, protest and request a hearing. Upon receiving a
10request for hearing, the Department shall give written notice
11to the person requesting the hearing of the time and place
12fixed for the hearing and shall hold a hearing in conformity
13with the provisions of this Act and then issue its final
14administrative decision in the matter to that person. In
15absence of protest and request for a hearing within 30 days,
16the Department's decision shall become final without any
17further determination being made or notice given.
18 Section 20. Acting as a retailer of vapor products without
19a license; penalty. A person who knowingly acts as a retailer
20of vapor products in this State without first having obtained a
21license to do so in compliance with this Act is guilty of a
22Class A misdemeanor for the first offense and a Class 4 felony
23for a second or subsequent offense. Each day the person
24operates as a retailer of vapor products without a license
25constitutes a separate offense. The Department may, by

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1application to any circuit court, obtain an injunction
2restraining any person who engages in business as a retailer of
3vapor products without a license (either because his or her
4license has been revoked, canceled, or suspended or because of
5a failure to obtain a license in the first instance) from
6engaging in that business until that person, as if that person
7were a new applicant for a license, complies with all of the
8conditions, restrictions, and requirements of this Act and
9qualifies for and obtains a license.
10 Section 25. Revocation, cancellation, or suspension of a
11retail license.
12 (a) The Department may, after notice and hearing, revoke,
13cancel, or suspend the license of any retailer of vapor
14products for the violation of any provision of this Act, or for
15noncompliance with any provision of this Act, or for any
16noncompliance with any lawful rule adopted by the Department
17under this Act, or because the licensee is determined to be
18ineligible for a license for any one or more of the reasons
19provided in this Act.
20 (b) A person aggrieved by any decision of the Department
21under this Section may, within 30 days after notice of the
22decision, protest and request a hearing. Upon receiving a
23request for a hearing, the Department shall give notice to the
24person requesting the hearing of the time and place fixed for
25the hearing and shall hold a hearing in conformity with the

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1provisions of this Act and then issue its final administrative
2decision in the matter to that person. In the absence of a
3protest and request for a hearing within 30 days, the
4Department's decision shall become final without any further
5determination being made or notice given. The final decisions
6of the Department shall be subject to judicial review according
7to the provisions of the Administrative Review Law.
8 (c) If the retailer of vapor products has a training
9program that facilitates compliance with minimum-age vapor
10products laws, the Department shall suspend for 3 days the
11license of that retailer of vapor products for a fourth or
12subsequent violation of subsection (a) or (b) of Section 50.
13For the purposes of this Section, any violation of Section 50
14occurring at the licensed location for the retailer of vapor
15products during a 24-month period shall be counted as a
16violation against the retailer of vapor products.
17 If the retailer of vapor products does not have a training
18program that facilitates compliance with minimum-age vapor
19products laws, the Department shall suspend for 3 days the
20license of that retailer of vapor products for a second
21violation of subsection (a) or (b) of Section 50.
22 If the retailer of vapor products does not have a training
23program that facilitates compliance with minimum-age vapor
24products laws, the Department shall suspend for 7 days the
25license of that retailer of vapor products for a third
26violation of subsection (a) or (b) of Section 50.

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1 If the retailer of vapor products does not have a training
2program that facilitates compliance with minimum-age vapor
3products laws, the Department shall suspend for 30 days the
4license of a retailer of vapor products for a fourth or
5subsequent violation of subsection (a) or (b) of Section 50.
6 Section 30. Vapor product labeling and safety. Any e-liquid
7container sold by a retailer in this State shall:
8 (1) use childproof caps that have the child-resistant
9 effectiveness set forth in the federal prevention
10 packaging standards under 16 C.F.R. 1700.15(b)(1); and
11 (2) contain a label that meets the requirements set
12 forth in 21 C.F.R. 1143.3.
13 Section 35. Peace officer investigation.
14 (a) Whenever any peace officer of the State shall have
15reason to believe that any violation of this Act has occurred
16and that the person so violating the Act has in his, hers, or
17its possession any vapor product, or any vending device
18containing the vapor products, he or she may file or cause to
19be filed his or her complaint in writing, verified by
20affidavit, with any court within whose jurisdiction the
21premises to be searched are situated, stating the facts upon
22which the belief is founded, the premises to be searched, and
23the property to be seized, and procure a search warrant and
24execute the warrant.

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1 (b) Upon the execution of the search warrant, the peace
2officer executing the search warrant shall make due return of
3the warrant to the court issuing the warrant, together with an
4inventory of the property taken under the warrant. The court
5shall then issue process against the owner of the property if
6he or she is known. If he or she is not known, the process shall
7be issued against the person in whose possession the property
8so taken is found, if that person is known. In case of
9inability to serve the process upon the owner or the person in
10possession of the property at the time of its seizure, notice
11of the proceedings before the court shall be given as required
12by the statutes of the State governing cases of attachment.
13Upon the return of the process duly served or upon the posting
14or publishing of notice made, the court or jury, if a jury
15shall be demanded, shall proceed to determine whether or not
16the property so seized was held or possessed in violation of
17this Act, or whether, if a vending device has been so seized,
18it contained at the time of its seizure any vapor products held
19or possessed in violation of this Act.
20 Section 40. Destruction or use of forfeited property. When
21any vapor product or any vending device has been declared
22forfeited to the State and all proceedings for judicial review
23have terminated, the Department shall either destroy the
24property or maintain and allow the use of the property in an
25undercover capacity.

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1 Section 45. Retailers; records.
2 (a) A retailer of vapor products who is required to procure
3a license under this Act shall keep within this State complete
4and accurate records of vapor products purchased, sold, or
5otherwise disposed of and shall preserve and keep all invoices,
6bills of lading, sales records, and copies of bills of sale,
7returns, and other pertinent papers and documents relating to
8the purchase, sale, or disposition of vapor products. The
9records need not be maintained on the licensed premises, but
10must be maintained in this State; however, if access is
11available electronically, the records may be maintained
12out-of-State. All original invoices or copies of invoices
13covering purchases of vapor products must be retained on the
14licensed premises for a period of 90 days after the purchase,
15unless the Department has granted a waiver in response to a
16written request in cases where records are kept at a central
17business location within this State or in cases where records
18that are available electronically are maintained out-of-State.
19The Department shall adopt rules regarding the eligibility for
20a waiver, revocation of a waiver, and requirements and
21standards for maintenance and accessibility of records located
22at a central location out-of-State under a waiver provided
23under this Section.
24 (b) Records shall be preserved for a period of at least 3
25years after the later of the date of the records or the date of

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1the entries appearing in the records, unless the Department, in
2writing, authorizes their destruction or disposal at an earlier
3date. At all times during the usual business hours of the day,
4any duly authorized agent or employee of the Department may
5enter any place of business of the retailer of vapor products
6without a search warrant and may inspect the records required
7to be maintained under this Section. If the agent or employee
8is denied free access or is hindered or interfered with in
9making the examination as provided in this Section, the license
10of the retailer of vapor products shall be subject to
11suspension or revocation by the Department.
12 Section 50. Distribution of vapor products to, and
13possession by, persons under minimum legal age prohibited.
14 (a) A person, either directly or indirectly by an agent or
15employee, or by a vending machine owned by the person or
16located in the person's establishment, may not sell, offer for
17sale, give, or furnish any vapor product to a person under
18minimum legal age.
19 (b) Before selling, offering for sale, giving, or
20furnishing a vapor product to another person, the person
21selling, offering for sale, giving, or furnishing the vapor
22product shall, by doing the following, verify that the person
23is not a person under minimum legal age:
24 (1) if the person appears to be under 27 years of age,
25 examining a government-issued photographic identification

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1 that establishes that the person is not a person under
2 minimum legal age; or
3 (2) for sales made through the Internet or other remote
4 sales methods, performing an age verification through an
5 independent, third-party age verification service that
6 compares information available from public records to the
7 personal information entered by the person during the
8 ordering process that establishes that the person is not a
9 person under minimum legal age.
10 (c) A person under minimum legal age shall not possess a
11vapor product.
12 (d) The Department of Human Services shall administer a
13program to conduct unannounced investigations of Illinois
14retailers licensed under this Act to determine compliance with
15State and federal laws relating to the illegal sale of vapor
16products to persons under minimum legal age. The results of the
17unannounced investigations shall be reported to the Department
18of Human Services and the Department of Revenue.
19 Section 55. Penalties for distribution of vapor products
20to, and possession by, persons under minimum legal age.
21 (a) Any person who violates subsection (a) or (b) of
22Section 50 is guilty of a petty offense. For the first offense
23in a 24-month period, the person shall be fined $200 if his or
24her employer has a training program that facilitates compliance
25with minimum-age vapor product laws. For the second offense in

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1a 24-month period, the person shall be fined $400 if his or her
2employer has a training program that facilitates compliance
3with minimum-age vapor products laws. For the third offense in
4a 24-month period, the person shall be fined $600 if his or her
5employer has a training program that facilitates compliance
6with minimum-age vapor product laws. For the fourth or
7subsequent offense in a 24-month period, the person shall be
8fined $800 if his or her employer has a training program that
9facilitates compliance with minimum-age vapor products laws.
10For the purposes of this subsection, the 24-month period shall
11begin with the person's first violation of the Act. The
12penalties in this subsection are in addition to any other
13penalties provided by law.
14 (b) Any retailer of vapor products who violates subsection
15(a) or (b) of Section 50 is guilty of a petty offense. For the
16first offense in a 24-month period, the retailer of vapor
17products shall be fined $200 if it does not have a training
18program that facilitates compliance with minimum-age vapor
19product laws. For the second offense in a 24-month period, the
20retailer of vapor products shall be fined $400 if it does not
21have a training program that facilitates compliance with
22minimum-age vapor products laws. For the third offense in a
2324-month period, the retailer of vapor products shall be fined
24$600 if it does not have a training program that facilitates
25compliance with minimum-age vapor product laws. For the fourth
26or subsequent offense in a 24-month period, the retailer of

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1vapor products shall be fined $800 if it does not have a
2training program that facilitates compliance with minimum-wage
3vapor products laws. For the purposes of this subsection, the
424-month period shall begin with the person's first violation
5of the Act. The penalties in this subsection are in addition to
6any other penalties provided by law.
7 (c) A training program that facilitates compliance with
8minimum-age vapor products laws must include at least the
9following elements: (i) it must explain that only individuals
10displaying valid identification demonstrating that they are of
11legal age shall be eligible to purchase vapor products; and
12(ii) it must explain where a clerk can check identification for
13a date of birth. The training may be conducted electronically.
14Each retailer of vapor products that has a training program
15shall require each employee who completes the training program
16to sign a form attesting that the employee has received and
17completed the vapor products training. The form shall be kept
18in the employee's file and may be used to provide proof of
19training.
20 (d) If a person under minimum legal age violates subsection
21(c) of Section 50, he or she is guilty of a petty offense and
22the court may impose a sentence of 25 hours of community
23service and a fine of $50 for a first violation.
24 A second violation of subsection (c) of Section 50 by a
25person under minimum legal age that occurs within 12 months
26after the first violation is punishable by a fine of $75 and 50

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1hours of community service.
2 A third or subsequent violation by a person under minimum
3legal age of subsection (c) of Section 50 that occurs within 12
4months after the first violation is punishable by a $200 fine
5and 50 hours of community service.
6 Any second or subsequent violation not within the 12-month
7time period after the first violation is punishable as provided
8for a first violation.
9 (e) If a person under minimum legal age is convicted of or
10placed on supervision for a violation of subsection (c) of
11Section 50, the court may, in its discretion, and upon
12recommendation by the State's Attorney, order that person under
13minimum legal age and his or her parents or legal guardian to
14attend a youth diversion program if that program is available
15in the jurisdiction where the offender resides. Attendance at a
16youth diversion program shall be time-credited against any
17community service time imposed for any first violation of
18subsection (c) of Section 50. In addition to any other penalty
19that the court may impose for a violation of subsection (c) of
20Section 50, the court, upon request by the State's Attorney,
21may in its discretion require the offender to remit a fee for
22his or her attendance at a youth diversion program.
23 For the purposes of this Section, a "youth diversion
24program" includes, but is not limited to, a seminar designed to
25educate a person on the physical and psychological effects of
26using nicotine products and the health consequences of using

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1nicotine products that can be conducted with a locality's youth
2diversion program.
3 (g) All moneys collected as fines for violations of Section
4(a), (b), or (c) of Section 50 of this Act shall be distributed
5in the following manner:
6 (1) one-half of each fine shall be distributed to the
7 unit of local government or other entity that successfully
8 prosecuted the offender; and
9 (2) one-half shall be remitted to the State to be used
10 for enforcement of this Act.
11 Any violation of subsection (a) or (b) of Section 50 shall
12be reported to the Department within 7 business days.
13 Section 60. Display of vapor products.
14 (a) All vapor products must be sold from behind the counter
15or displayed in an age restricted area or sealed display case.
16 (b) The restrictions in this Section do not apply to an
17adult-only facility.
18 (c) The restrictions in this Section do not apply to a
19retail store that (i) derives at least 90% of its revenue from
20tobacco, tobacco related products, or vapor products; (ii) does
21not permit persons under minimum legal age to enter the
22premises unless accompanied by a parent or legal guardian;
23(iii) posts a sign on the main entranceway stating that persons
24under minimum legal age are prohibited from entering unless
25accompanied by a parent or legal guardian; and (iv) is subject

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1to the Cigarette Tax Act, the Tobacco Products Tax Act of 1995,
2the Prevention of Tobacco Use By Minors and Sale and
3Distribution of Tobacco Products Act, or the Display of Tobacco
4Products Act.
5 (d) A violation of this Section is a petty offense for
6which a court shall impose a fine of not less than $100 nor
7more than $1,000.
8 Section 900. The State Finance Act is amended by adding
9Section 5.891 as follows:
10 (30 ILCS 105/5.891 new)
11 Sec. 5.891. The Vapor Products Compliance Fund.
12 Section 905. The Prevention of Tobacco Use by Minors and
13Sale and Distribution of Tobacco Products Act is amended by
14changing Section 1.5 as follows:
15 (720 ILCS 675/1.5)
16 Sec. 1.5. Distribution of alternative nicotine products to
17persons under 18 years of age prohibited.
18 (a) For the purposes of this Section, "alternative nicotine
19product" means a product or device not consisting of or
20containing tobacco that provides for the ingestion into the
21body of nicotine, whether by chewing, smoking, absorbing,
22dissolving, inhaling, snorting, sniffing, or by any other

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1means. "Alternative nicotine product" excludes cigarettes,
2smokeless tobacco, or other tobacco products as these terms are
3defined in Section 1 of this Act, vapor products as defined
4under Section 5 of the Vapor Products Regulatory Act, and any
5product approved by the United States Food and Drug
6Administration as a non-tobacco product for sale as a tobacco
7cessation product, as a tobacco dependence product, or for
8other medical purposes, and is being marketed and sold solely
9for that approved purpose.
10 (b) A person, either directly or indirectly by an agent or
11employee, or by a vending machine owned by the person or
12located in the person's establishment, may not sell, offer for
13sale, give, or furnish any alternative nicotine product, or any
14cartridge or component of an alternative nicotine product, to a
15person under 18 years of age.
16 (c) Before selling, offering for sale, giving, or
17furnishing an alternative nicotine product, or any cartridge or
18component of an alternative nicotine product, to another
19person, the person selling, offering for sale, giving, or
20furnishing the alternative nicotine product shall verify that
21the person is at least 18 years of age by:
22 (1) examining from any person that appears to be under
23 27 years of age a government-issued photographic
24 identification that establishes the person is at least 18
25 years of age or
26 (2) for sales made through the Internet or other remote

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1 sales methods, performing an age verification through an
2 independent, third-party age verification service that
3 compares information available from public records to the
4 personal information entered by the person during the
5 ordering process that establishes the person is 18 years of
6 age or older.
7 (d) A person under 18 years of age shall not possess an
8alternative nicotine product.
9(Source: P.A. 99-496, eff. 6-1-16; 100-201, eff. 8-18-17.)
10 Section 999. Effective date. This Act takes effect January
111, 2020.
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