1.  TTB USER FEES PROPOSAL
On May 6, the Obama Administration released its Fiscal Year 2010 Budget. Included in the budget is
a proposal to institute "user fees" to fully fund the Alcohol and Tobacco Tax and Trade Bureau (TTB).
Currently, the TTB's $109 million budget is appropriated by Congress. The proposal inserts a new title into the Federal Alcohol Administration Act (FAA), Title III - Annual Fees, etc. This would authorize the Secretary of the Treasury to collect a "fee for services rendered to the regulated community at levels not lower than those provided" in order to fund TTB. It creates three "fee categories" for each of the three tiers of the alcohol beverage industry. The fees would be due annually by July 1.

Fee Categorv 1: $1000 per year in respect of each such premises under his control:
1. Proprietors of a distilled spirits plant;
2. Proprietors of a bonded wine cellar;
3. Proprietors of a bonded wine warehouse;
4. Proprietors of a taxpaid wine bottling house;
5. Proprietors of a brewery.

Fee Cateaorv 2: $500 per year:
1. Wholesale dealers in liquor;
2. Wholesale dealers in beer;
3. Every person intending to claim eligibility for drawback under section 5131 of the IRC of 1986

Fee Categorv 3: $300 per year:
1. Retail dealers in liquors;
2. Retail dealers in beer;
3. Every holder of a permit issued under section 5271 of the IRC of 1986

These new user fees amount to a re-imposition of the annual $250 Special Occupational Tax (SOT), which ILBA and ABL worked to first suspend for three years in 2004 and then permanently repeal in 2005, with repeal taking effect on July 1, 2008. It is still unclear as to whether a $300 fee would be assessed (1) per license/establishment versus per licensee; and (2) for each alcohol beverage category (beer, wine & spirits).
        ILBA IS OPPOSED

2.  FET INCREASE PROPOSAL
          The Senate Finance Committee held a hearing on May 12th to review options to finance a health care
package. The Executive Director of Center for Science in the Public Interest (CSPI), Michael Jacobsen, testified at the hearing and not surprisingly called for an increase in alcohol taxes across the board.
         On May 18, the Senate Finance Committee released a list of potential revenue options to offset the cost
of the health care package. Included was a recommendation to raise ALL alcohol excise taxes to $16 per proof gallon. This rate increase would apply to beer, wine and distilled spirits products, with some exemptions for small vintners and brewers.

 The current excise tax rates are $13.50 per proof gallon for spirits; approximately $11.07 per proof gallon for wine; and $18 per barrel for beer.  In addition to increased alcohol taxes, the report recommended implementing a new federal excise tax on sugar sweetened beverages, including soft drinks, fruit drinks, energy and sports drinks, iced teas and coffees, and flavored mild and dairy drinks.
The Senate Finance Committee provided a comment period for these policy proposals and the ILBA met with and submitted a letter to Senator Dick Durbin opposing the financing of healthcare reform with FET increases.
The threat of an FET increase to fund healthcare programs has waned ever so slightly as other issues surrounding the healthcare debate have cropped up, but these tax increases do remain on the table.  There is also a sense thate even if Congress was not to use an FET increase to partially fund healthcare programs, an FET increase will be suggested to fund other Administration and Congressional programs.
The ILBA and ABL will continue to work with those in the industry who oppose such increases.
ILBA IS OPPOSED

3.  CREDIT CARD REFORM & INTERCHANGE FEES
On April 30, the House of Representatives passed the Credit Cardholders' Bill of Rights Act, H.R. 627, by a margin of 357-70. The bill then passed the Senate on May 19 by a vote of 90-5. The President subsequently signed the bill into law on May 22. The new law addresses a number of major consumer-related issues such as prohibiting companies from giving cards to people under 21 unless they have a parent or guardian co-sign for the card and provide customers with 45 days' notice and an explanation before their interest rates increase.
Despite the media attention and fanfare for this bill, this legislation did not address interchange fees and merchant concerns. There was an attempt to include an amendment to the bill- the Consumer Discount and Fee Transparency Amendment, sponsored by Sens. Dick Durbin and Kit Bond (R-MO) - which would have allowed merchants to give consumers discounts for using non-credit card forms of payment. However, the amendment was not allowed into the bill by Sens. Chris Dodd (D-CT) and Richard Shelby (R-AL), the chairman and ranking member of the Senate Banking Committee. Included in the final version of the bill, however, was a study of the effects of interchange fees on merchants, consumers, and other parties in Section 501.
On June 4 House Judiciary Committee Chairman Rep. John Conyers (D-MI) and Rep. Bill Shuster (R-PA) introduced the Credit Card Fair Fee Act of 2009 (HR 2695 and urged Members of Congress to support its passage.  The bill is an important step in reining in excessive credit card swipe fees, the fees merchants are charged every time they run a customer’s credit card.
Following the House’s lead, on June 10 Assistant Senate Majority Leader Dick Durbin (d-IL) introduced the Senate version of the Credit Card Fair Fee Act of 2009 (S.1212) to allow large and small businesses to negotiate directly with credit card companies to reduce the interchange fees that are charged on every credit card transaction.
The Credit Card Fair Fee Act would grant narrow anti-trust exemptions to allow merchants and other business owners to negotiate as a group with credit card companies and banks over swipe fee rates.  American consumers pay among the highest swipe fees in the industrialized world.  An average of $2 out of every $100 Americans spend goes to swipe fees and for many businesses, swipe fees are now their highest non-labor cost, outpacing even health care.  As other countries have reined in excessive swipe fees in recent years, and the actual cost of processing a transaction has gone down, Americans are now paying triple the amount in swipe fees they paid in 2001 reaching $48 billion last year alone.
ILBA IS SUPPORTIVE
 
4.    EMPLOYEE FREE CHOICE ACT (EFCA)
The Employee Free Choice Act, otherwise known as the “Card Check Bill” employees effectively lose their right to private ballot elections.  Under the bill, employers would be required to recognize a labor union if a majority of employees signs cards saying they want to join. Workers would lose their current right to a private ballot vote when determining whether or not to participate in a union. Employers and employees would also have all wages and working conditions determined by a federal arbitrator under a binding two-year agreement.  This bill is currently losing momentum, as Democrats in the Senate have been hampered by defections by moderate Southern members of their caucus; who oppose the bill in its current form. Support for the bill, which would make it significantly easier for workers to form unions and force arbitration in disputes, has waned as other issues have become more prominent.
ILBA IS OPPOSED

5.    SUPPORT 21 ACT OF 2009
The Support 21 Act of 2009 (H.R. 1028) was introduced on February 12 by Rep. Lucille Roybal-Allard (D-CA) and Rep. Mary Bono-Mack (R-CA).  Joining them in support of the bill was Rep. Rosa DeLauro (D-
CT) and Rep. Zach Wamp (R-TN).  The bill calls for $110 million in spending on an underage drinking prevention advertising campaign and other underage drinking prevention programs over the next 5 years.  It would provide grant funding and would include NHTSA, SAMHSA, ONDCP and the pediatric healthcare community.  The bill also includes some language calling for studies by the Centers for Disease Control (CDC) and National Academy of Sciences.  ILBA and ABL are monitoring this legislation, though movement of the bill is not imminent.

6.    MENU LABELING
Two competing menu labeling bills have been combined to form a new, bipartisan piece of legislation that has garnered support from the both the food service industry and public health advocates.  Sens. Tom Harkin, D-Iowa, Tom Carper, D-Del., and Lisa Murkowski, R-Alaska, came to an agreement in supporting a single uniform national nutrition standard based on the two previous bills: the Menu Education and Labeling Act (MEAL Act) and the Labeling Education and Nutrition Act (LEAN Act).
The new bill will call for chains with 20 units or more to post calorie counts for standard items on menus and menu boards as well as calories per serving for each item on a buffet and salad bar.  Standard menu items must be offered for at least 60 days per calendar year and would not include daily specials, custom orders and test market items on the menu for less than 90 days.
Also of importance is the fact that the bill will preempt all state and local menu-labeling laws, which protects restaurateurs and on-premise establishments from the whim of local health boards and potential litigation.  In addition to calorie counts, other nutritional data must be made available upon request, including calories from fat, total fat, saturated fat, cholesterol, sodium, carbohydrates, sugars, dietary fiber and protein.
It is unclear at this time whether legislators will attempt to the legislation as a standalone bill, or include it in a larger piece of health legislation.  Oregon, Connecticut and Maine, as well as New York City and Philadelphia already have menu-labeling measures in place.  Oklahoma, Indiana, Florida, Hawaii, Kentucky, Minnesota, New York and South Carolina have all considered adopting menu-labeling policies.
ILBA IS SUPPORTIVE

ILLINOIS STATE 96TH GENERAL ASSEMBLY
2009 SPRING SESSION LEGISLATIVE REPORT

The 2009 political arena in Springfield has been very active this past spring session.  From former Governor Blagojevich’s impeachment to Governor Quinn’s inauguration to pledges of co-operation to a total lack of co-operation…. There has always been something for everyone.

Thanks to all of the ILBA supporters and especially thanks to the over 100 ILBA members that participated in our Legislative Day in Springfield on May 6, 2009.  The ILBA, BP Consultants and many coalition partners worked to defeat harmful legislation and pass favorable legislation.

The following six proposals outcomes were “favorable” to the ILBA.

1.  HB2462 - RETAIL WINE SHIPPER’S LICENSE - DEFEATED
Proposed creating a retail wine shipper’s license, which allows a person with a wine retailing or wine auctioning license under the laws of another state to ship wine directly to a resident of this State who is 21 years of age or older for that resident’s personal use and not for resale.  Provides that sale and shipment by a retail wine shipper licensee pursuant to this Act shall be deemed to constitute a sale in this State for the purposes of the Retailers’ Occupation Tax Act.

2.  HB2522 - RIVERBOATS-FREE DRINKS - DEFEATED
Proposed allowing the distribution of free drinks on the gaming floor of a riverboat.

3.  HB3757 - LIQUOR-ILLEGAL GAMBLING - DEFEATED
Proposed that the Illinois Liquor Control Commission shall have the duty and power of suspending or revoking all licenses of a licensee under the Act for the licensee’s conviction for a gambling offense under the Criminal Code of 1961.  Provides that the State Liquor Control Commission may not delegate this responsibility to any local liquor commission.  Provides that the State Liquor Control Commission shall suspend for 30 days all liquor licenses of a licensee upon the licensee’s first conviction for a gambling offense, shall revoke or suspend for at least 30 days those licenses upon a second conviction within a 12 month period, and shall revoke those licenses upon a third or subsequent conviction within a 5 year period.

4.  SB0198 - BOTTLE DEPOSIT ACT - DEFEATED
Proposed requiring a statewide bottle deposit.

5.  HB4557 ALCOHOLIC DRINK TAX - DEFEATED
Proposed Illinois Adult Beverage Tax increases to support drug treatment, mental health care and budget.
TAX INCREASES PROPOSED
Beer  $1.20 per case
Wine   $ . 30 per 750 ML
Spirits   $1.50 per 1.0 L

6. HB1793 ADULT BEVERAGE SIGNAGE - PASSED
Amends the Liquor Control Act of 1934.  In a provision concerning birth defects warning signs, adds to the required message on signs the following “If you need assistance for substance abuse, please call the office of Alcoholism and Substance Abuse (OASA) at 1-800-843-6154” effective on January 1, 2010.

The following outcome was “unfavorable” to the ILBA.

1. HB1145 – LIQUOR/SMOKING LICENSE – DEFEATED
Proposed that the local liquor control commissions have the power to issue a smoking license to certain eligible establishments.  Provides that an eligible establishment must be able to document that (i) it has disclosed to all employees that if a smoking license is granted to the establishment, smoking will be permitted on the premises and (ii) all employees have acknowledged receiving the disclosure.  Provides that if the eligible establishment has a liquor license, it must be in compliance with all of the terms of the liquor license in order to receive a license to allow smoking on the premises.  Amends the Smoke Free Illinois Act.  Provides that Smoking Is allowed in any eligible establishment that has obtained a license to allow smoking on the premises from the local liquor control commission.  Provides that an eligible establishment must post prominent signage notifying the public that the establishment has been designated as a smoking establishment.

The Capitol Bill (HB2424 Senate Amendment 1) has both unfavorable and favorable items for the ILBA.

1. TAX INCREASES ON ADULT BEVERAGES
.10 per case on beer
.80 per bottle on wine
.80 per bottle on spirits

This was less tax than the other proposed alcohol tax increase.  A large coalition fought this bill.  The ILBA has sent Governor Quinn a letter opposing the alcohol tax increase.

2. VIDEO GAMING BILL
Creates the Video Gaming Act.  Provides that licensed retail establishments where alcoholic liquor is served for consumption, licensed fraternal establishments, and licensed veterans establishments and truck stops may conduct video gaming.  Provides that the Illinois Gaming Board shall be responsible for administration and enforcement of laws relating to video gaming terminals.  Amends the Riverboat Gambling Act to provide that the Illinois Gaming Board shall be responsible for administration and enforcement of the Video Gaming Act.  Amends the Gambling Article of the Criminal Code of 1961 to make corresponding changes.  Amends the State Finance Act to  create the Local Government Video Gaming Distributive Fund as a special fund in the State treasury.
For detailed information on the Capitol Bill to www.ilga.gov/legislation HB2424 Senate Amendment 1.

The Capitol Plan has been approved in both chambers, but the bills are being held in the House on parliamentary maneuvers.  Governor Quinn, the House and the Senate are positioning other agenda and holding the Capitol Plan as hostage.  Needless to say, it has been an interesting session.