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Regulatory Alert

CURRENT PROPOSED STATE OF ILLINOIS RULES AFFECTING SMALL BUSINESS

If any of the following proposed regulations impact your business, let us know!   Click here to submit comments on how the proposed rulemakings will impact your business or industry.   

Following are  proposed rules of possible interest to small businesses published in the Illinois Register.  During the comment period, individuals have an opportunity to express their support or opposition to the rule.  To submit comments or to learn more about the proposed rules, contact Katy Khayyat at the Department of Commerce and Economic Opportunity Business Information Center via e-mail at Katy.Khayyat@Illinois.gov  or call (800) 252-2923 or (217) 785-8020. 

To get more information on Illinois Rules and Regulations, how to file a complaint about a burdensome or excessive state rule, go to www.ienconnect.com/regflex.
 

 
The following proposed amendments will impact liquor license holders and those in the liquor industry:                     
 
The Illinois Liquor Control Commission proposed amendments to the Part titled “The Illinois Liquor Control Commission” (11 Ill. Adm. Code 100; 38 Ill. Reg. 16634) regulating low alcohol content products.  Specifically, the rulemaking excludes those who manufacture, import, distribute or sell products that contain 0.5% or less of alcohol by volume.  The rulemaking adds provisions concerning when a retailer licensee is subject to a bankruptcy proceeding and clarifies that post-dated checks that clear the bank before the end of the 30-day credit period are considered valid payment.  Finance, delivery and any or all customary charges in the industry may be added to the credit issued.  However, the retailer may not charge for electronic transfers.  Provisions prohibiting off-premises retail warehousing and regulating hotel/motel mini bars are established.  Product sampling and tasting guidelines allow for the supervised presentation of products at a retail location.  All products to be tasted or sampled must be registered with the Commission.  Samples are limited to ¼ oz. distilled spirits, 1 oz. wine and 2 oz. beer.  Samplings and tasting may only be conducted at a licensed premise.  The Commission will allow for test marketing on a case-by-case basis.  The rulemaking clarifies that the Commission has the exclusive right to issue liquor licenses to boats and that the Illinois Gaming Board has the exclusive jurisdiction to set hours of operation s for liquor sales on boats licensed under the Riverboat Gambling Act.  Provisions for auction liquor licenses are established and include there requirement that anyone applying for this type of license must first be licensed under the Illinois Auction License Act.  The Commission may allow a member to appear via audio or video conferencing in accordance with the Open Meetings Act.  W Wine makers and craft beer makers may self-distribute directly to retail license holders if they meet the established requirements.  The Commission will not issue a new license to a person who holds a 5% or greater interest in a revoked license unless it, in its discretion, determines that the person has been significantly rehabilitated.  Finally, liquor may be imported without a liquor license if it is less than 1 gallon or for personal use and the inventory has been approved by the Commission, all stat use taxes have been paid and all federal laws and rules are abided by.
 
Bottom Line:  The proposed rules define "alcoholic liquor" and the scope of the Illinois Liquor Control Act as it pertains to products and persons. (15) The proposed rules will modify the current rule on Credit to Retail licensees by clarifying certain definitions, introducing new provisions for checks that do not have sufficient funds when cashed, and modifying privileges pertaining to electronic transfers.   (90) The proposed rules will clarify the intention of the legislature behind the "Three-Tier” system that retailers must purchase alcoholic liquor from licensed distributors only.   Retailers may not purchase alcoholic liquors from other retailers or manufacturers unless exempt. Retailers also may not sell alcoholic liquor for future or subsequent resale. (250) The proposed rules prohibit the storage of alcoholic liquor at any location other than the retail licensed premises. This prohibits distributors from delivering to alternate delivery sites or for alternate retail locations. (255)  The proposed rules remove the requirement for multi-use facilities to invoice and store their alcoholic liquor separately within one central location by State liquor license number for investigative purposes. (270)  The proposed rules clarify the requirements for hotels/motels to be permitted to sell alcohol via mini bars and room service. (275)  The proposed rules will outline guidelines to regulate product tastings, samplings, and test marketing with regards to serving amounts, entrance fees, tracking, extraneous materials, licenses, and general operation. (285)
 
The proposed rules delineate the jurisdictions of state and local regulative bodies as they pertain to boat licenses and establish requirements of boat liquor license holders. (325)  The proposed rules define an "auction liquor license" and delineate the privileges it grants. (326)  Per the Open Meetings Act [5 ILCS 120] and the proposed rules, Commissioners may attend meetings through audio or video teleconferencing under certain conditions noted in the rule. Furthermore, the proposed rules will permit public attendance and comment at Commission meetings. (410) The proposed rules list the conditions that must be met before in-state and out-of-state makers of wine can be permitted to sell their own manufactured wine direct to retail license holders. (420)
 
The proposed rules list the conditions that must be met before in-state and out-of-state makers of beer can be permitted to sell their own manufactured beer direct to retail license holders. (430)  The proposed rules will remove the ambiguity of the Illinois Liquor Control Act's license eligibility statute by stating that the owners/officers/members of a revoked corporation, limited liability company, etc., are considered revoked persons in the same capacity as the revoked business entity. (460) The proposed rules prohibit the importation of alcoholic liquor into Illinois for a non-personal or commercial use without first obtaining a license to import issued by the Commission and these proposed rules list the conditions under which this may be permitted. (480)
 
For questions or to submit comments contact Richard Haymaker, Liquor Control Commission at (312) 814-1804. Click here to submit comments.
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The following proposed rule will impact restaurants, bars, casinos, other small businesses and municipalities:
 
The Department of Public Health proposed a new Part titled “Smoke Free Illinois Code” (77 Ill. Adm. Code 949; 38 Ill. Reg. 17283) implementing PA 96-17, the Smoke Free Illinois Act.  The new part outlines and clarifies various aspects of the Act and the procedures for complaints and enforcement.  Smoking is prohibited in restaurants, bars and any areas where food, beverages or both are prepared or served by employees, including outdoor areas such as patios, beer gardens, decks, rooftops and concession areas.  However, smoking may be permitted in a self-service outdoor area at least 15 feet away from any entrance, exit, window or ventilation intake, where employees do not prepare or serve food or beverages and are not required to enter, leave or pass through during their work time.  Clear and conspicuous signage designating a self-service outdoor area where smoking is permitted must be posted.  The statutory definition of a bar is expanded to include brew pubs, saloons, microbreweries and sports bars; independent contractors are added to the statutory definition of an employee; and places of worship are added to the statutory definition of public place.  The rule also includes procedures for filing complaints with DPH or a state-certified local public health department alleging violations.  The identity of complainants will be kept confidential unless the complainant agrees to disclosure.  Enforcement shall be conducted by DPH, local public health departments and local law enforcement agencies.  Persons or entities that receive a citation or notice of violation may request an administrative hearing from the agency that issued the citation or notice. 
 
Bottom Line:  These rules implement the Smoke Free Illinois Act, PA 95-17 that authorizes the Illinois Department of Public Health to enforce the provisions of the Act and to assess fines for violation of the Act.  This rulemaking focuses specifically on clarification that smoking is prohibited in a restaurant, bar and any area where food, beverages, or both are prepared or served by employees, including outdoor areas such as patios, beer gardens, decks, or rooftops or concession areas.  Additionally the proposed rule includes provisions regarding filing of complaints and enforcement provisions.   For questions or to submit comments, contact Susan Meister, Division of Legal Services, Illinois Department of Public Health at dph.rules@illinois.gov, or call (217) 782-2043.  Click here to submit comments.
 
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The following proposed rule will impact applicants for cannabis cultivation center permits:
The Department of Agriculture adopted emergency amendments to Compassionate Use of Medical Cannabis Pilot Program (8 IAC 1000; 38 Ill. Reg. 17772) effective 8/8/14 for a maximum of 150 days.  The amendments specify what percentage of a cultivation center permit applicant’s score will be determined by each section of an application.  Required elements of an application are scored as follows:  cultivation plan, 30%; security plan, 20%; product safety and labeling, 15%; facility suitability, 15%; staffing plan, 10%; and business plan, 10%.  Bonus points (up to an additional 16%, beyond the             00% score for required elements) will be awarded for optional submissions such as labor and employment practices, environmental impact statements and proof of minority, female or disabled person majority business ownership as defined in the Business Enterprise for Minorities, Females and Persons with Disabilities Act.  The emergency rule also allows applicants who are awaiting local zoning decisions to submit verification of zoning approval no later than 60 days after submitting the remainder of their applications to DOA. 
 
Bottom Line:  This rulemaking adds the scoring percentages the Department will use when scoring dispensing organization applications for implementation of the Compassionate Use of Medical Cannabis Pilot Program Act.  Applications will be scored based on five required categories.  Should the applicant meet the minimum percentage in the five required categories, it may be eligible to be scored in the bonus category.  The required five categories and the bonus category will be scored based on percentages.  The rule also amends the Selection Criteria Section (1290.70) to clarify that minority, female and disabled shall be defined as found in Section 2 of the Business Enterprise for Minorities, Females and Persons with Disabilities Act.  For questions or to submit comments, contact Craig Cellini at Craig.Cellini@Illinois.gov, or call (217) 785-0813.  Click here to submit comments.
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The Department of Revenue proposed an amendment which will impact small employers who are allowed to file withholding return annually rather than quarterly:
The Department of Revenue proposed an amendment to Income Tax (86 IAC 100; 38 Ill. Reg. 18122) related to the timeliness of filing and paying withholding income tax by an employer for an employee.  Employers owing no more than $12,000 in the previous complete state fiscal year may file a return annually during the current calendar year.  Employers that reported a liability of no more than $1,000 may pay the tax when the return for the current calendar year is due.  An employer eligible to file annually who withholds or is required to withhold more than $12,000 in any quarter must make a quarterly return for each subsequent quarter and make semi-weekly payments for the current and following calendar year.  However, those employers filing annually have the option to file quarterly, in which case monthly payments must be made, unless liability exceeds $12,000 in any quarter.
Bottom Line:  This rulemaking amends Section 100.7310 to implement changes in the policy of the Department of Revenue regarding permitting employers to file withholding returns annually rather than quarterly.  For questions or to submit comments, contact Paul Caselton at (217) 782-7055 or email Paul.Caselton@illinois.gov.  Click here to submit comments. 
 


For more information on anything in this issue of Regulatory and Information Alert, contact Katy Khayyat at Katy.Khayyat@Illinois.gov or call (217) 785-8020 or (800) 252-2923.  To be removed from this mailing list, please contact Katy Khayyat at Katy.Khayyat@Illinois.gov or by calling (217) 785-8020 or (800) 252-2923.