Add S1399-ll, Pub Health L; amd SS480, 480-a, 481 & 1814, Tax L;
amd SS11-1317 & 11-4012, NYC Ad Cd
Relates to unlawful shipment or transportation of cigarettes.
Eff. Date 11/14/2000 (see table)
Governor's Program
SPONSORS MEMO:
BILL
NUMBER: S8177
AN ACT to amend the
public health law, in relation to the shipment of
cigarettes; and to amend
the tax law and the administrative code of the
city of New York, in
relation to penalties for violations of the ciga-
rette tax
SPONSOR: FUSCHILLO
PURPOSE:
Amend the Public Health
Law to create civil and criminal penalties for
persons who sell and
ship cigarettes, and on carriers who transport
cigarettes, to persons
who are not licensed or registered cigarette
dealers or agents. These
amendments will prevent underage youths from
obtaining cigarettes,
and in effect, require that all purchases be made
face-to-face in retail
stores where proof of age can be ascertained; and
Amend the Tax Law and
the Administrative Code of the City of New York to
increase civil and criminal
penalties, including penalties on unregis-
tered retail dealers
who sell cigarettes and on persons who bootleg
cigarettes (i.e., possess
unstamped or unlawfully stamped cigarettes in
the State). These amendments
will ensure funding for health care as
enacted by the Health
Care Reform Act of 2000.
SUMMARY
OF PROVISIONS:
Section one of the bill
provides a statement of legislative findings.
Section two of the bill
adds a new section 1399-11 to the Public Health
Law to provide rules
relating to the shipment of cigarettes. Subdivi-
sion 1 of section 1399-11
provides that it is unlawful for any person
who sells cigarettes
either in this state or another state to ship, or
cause to be shipped,
any cigarettes to any person in this State who is
not a licensed or registered
cigarette dealer, an export warehouse
proprietor or a person
operating a customs bonded warehouse, or an
employee or official
of the Federal or State government (or a political
subdivision thereof)
who is acting pursuant to his or her official
duties. A person is
licensed or registered under Article 20 of the Tax
Law, for purposes of
subdivision 1, when the person's name appears on a
list of licensed or
registered agent or wholesale or retail dealers
published by the Tax
Department or the person is in fact licensed or
registered under Article
20 of the Tax Law.
Subdivision 2 of section
1399-11 provides that it is unlawful for a
common carrier or a
contract carrier to knowingly transport cigarettes
to any person in the
State reasonably believed by such carrier to be
other than one of the
persons who is a proper party to whom cigarettes
may be shipped pursuant
to subdivision 1. However, if cigarettes are
transported to a home
or residence, there is a presumption that the
common or contract carrier
knew that such person was not one of the
persons described in
subdivision 1. Also, it is unlawful for any other
person to knowingly
transport cigarettes to any person in the State,
other than one described
in subdivision 1. An exception is provided for
up to 800 cigarettes
being transported by a person who is not a common
or contract carrier.
Subdivision 3 provides
that when a person who sells and ships or causes
cigarettes to be shipped
to a person in this State, other than in a
manufacturer's original
container, the container or wrapping must be
marked with the word
"cigarettes".
Subdivision 4 provides
that police officers, and certain peace officers,
are authorized to seize
cigarettes being shipped or transported in
violation of the section,
and such cigarettes are subject to forfeiture.
Subdivision 5 of section
1399-11 provides that violations of subdivision
1 or 2 shall be punished
as a class A misdemeanor, and a second or
subsequent violation
of those subdivisions shall be punished as a class
E felony. In addition,
the Commissioner of Health may impose a civil
fine, not to exceed
$5,000, for each violation of subdivision 3.
Section 3 of the bill
amends Tax Law section 480(1)(k), relating to
cigarette agent's licenses,
to prohibit the sale of cigarettes to unreg-
istered retail dealers.
This section also makes it clear that such
agents cannot sell cigarettes
to retailers whose registrations have been
suspended or revoked.
Section 4 of the bill
amends Tax Law section 480-a(1) by adding a new
paragraph (e) to authorize
the Commissioner to revoke the registration
of a retail dealer or
to refuse to register an application for a retail
dealer registration
where the applicant's or retailer's place of busi-
ness is at the same
premises as that of a retail dealer whose registra-
tion revocation is pending,
unless the applicant or the retail dealer
provides the Commissioner
with adequate documentation demonstrating that
the applicant or retail
dealer acquired the premises or business in an
arms length transaction.
The subdivision further defines an "arm's
length transaction"
as a sale in good faith and for valuable consider-
ation that reflects
the fair market value in the open market between two
informed and willing
parties, neither under any compulsion to partic-
ipate in the transaction.
A sale between relatives, related companies or
partners or a sale for
the primary purpose of avoiding the effect of the
violations on the premises,
is presumed not to be "arm's length".
Section 5 amends Tax
Law section 480-a(3), relating to retail dealer and
vending machine registrations,
to provide that the civil fine for
violating that section
(i.e., for selling cigarettes while not regis-
tered or while the registration
is revoked) shall be not less than $500
but not more than $2,000,
and for a second or subsequent offense within
3 years, not less than
$1,000 but not more than $3,500. Currently, the
fine for a first violation
is not more than $1,000 and for a second or
subsequent violation
not more than $2,500. Section 480-a(3) is also
amended to increase
the fines for violations by vending machine opera-
tors.
Section 6 of the bill
amends Tax Law section 480-a(4)(d) to clarify that
the Division of the
Lottery may suspend or revoke any licenses that were
issued for a specific
location to a cigarette retailer whose registra-
tion as a retail cigarette
dealer for that location is suspended or
revoked.
Section 7 amends Tax
Law section 481(1)(b) to provide that the civil
penalties for possession
of unstamped or unlawfully stamped cigarettes
shall be not more than
$150 for each carton (i.e., 200 cigarettes) in
excess of 5 cartons
(i.e., 1,000 cigarettes) of unstamped or unlawfully
stamped cigarettes.
Currently, the penalty is not more than $100 for
each carton in excess
of 10 cartons. The amounts of the fines with
respect to cigars and
tobacco products are amended to correspond to the
changes made with respect
to cigarettes.
Significantly, as a
further deterrent, the bill requires that certain
minimum penalties be
imposed on those who bootleg unlawful cigarettes.
The penalties are as
follows: (i) not less than $30 but not more than
$200 for each 200 cigarettes
in excess of 1,000 but less than or equal
to 5,000, (ii) not less
than $75 but not more than $200 for each 200
cigarettes in excess
of 5,000 but less than or equal to 20,000; and
(iii) not less than
$100 but not more than $200 for each 200 cigarettes
in excess of 20,000
cigarettes. Corresponding penalty increases may be
imposed for the knowing
possession of cigars or tobacco products with
respect to which the
tobacco products tax has not been paid or assumed
by a distributor.
Section 8 of the bill
amends Tax Law section 1814(d) to provide that a
person who possesses
or transports unstamped or unlawfully stamped pack-
ages of cigarettes for
the purpose of sale after having previously been
convicted of violating
this subdivision within the preceding five years
shall be guilty of a
class E felony.
Section 9 of the bill
amends section 1814(e) to provide that willful
possession or transportation
for sale of 30,000 or more unstamped or
unlawfully stamped cigarettes,
other than by a licensed agent, shall be
a class D felony.
Section 10 of the bill
amends section 11-13l7(.b) of the Administrative
Code of the City of
New York to enhance the civil penalties that may be
imposed by the Commissioner
of Finance to correspond to the amendments
made to the equivalent
provisions in the bill with respect to the State
cigarette tax.
Section 11 of the bill
amends section 11-4012 (b) and (c) of the Admin-
istrative Code of the
City of New York to authorize criminal penalties
for possession of unstamped
or unlawfully stamped packages of cigarettes
to correspond to state
penalties.
Section 12 of the bill
provides a severability clause.
Section 13 of the bill
provides that the act shall take effect on the
ninetieth day after
it shall have become a law, but subdivision 2 of
section 2 shall take
effect January 1, 2001.
EXISTING
LAW:
Section 1399-cc of the
Public Health Law provides that any person oper-
ating a place of business
wherein tobacco products are sold is prohibit-
ed from selling such
products to persons under 18 years of age. More-
over, the sale of tobacco
in such places, other than by vending
machines, shall be made
only to an individual who demonstrates proof of
legal age. In addition,
Penal Law section 260.21(3) provides that sale
of tobacco products
to a person under 18 is punished as a class B misde-
meanor. Unfortunately,
these sections do not adequately address the
situation where cigarettes
are shipped directly to minors (i.e., who
receive cigarettes via
mail order or the Internet).
Also, despite existing
penalties designed to curb cigarette bootlegging,
the incidence of this
unlawful activity persists at an alarming pace.
The current penalties
are as follows:
* Section 12 of the
Public Health Law provides for imposition of a civil
penalty by the Commissioner
of Health not exceeding $2,000 for each
violation of the Public
Health Law, unless another penalty is expressly
provided for. That section
also provides that the Attorney General shall
bring an action for
injunction, at the request of the Commissioner of
Health, against any
person who violates any provision of the Public
Health Law.
* Section 480 of the
Tax Law provides for licensing of cigarette whole-
salers and agents, and
provides that agents may not sell cigarettes to a
retail dealer who has
been forbidden to continue selling cigarettes.
* Section 480-a of the
Tax Law provides for the registration of ciga-
rette retail dealers
and for civil fines for violation of the registra-
tion requirement. It
also provides for cancellation or suspension of
registrations for violations
of the Public Health Law's regulation of
tobacco sales to minors.
* Section 481 of the
Tax Law provides for the imposition of civil penal-
ties for violations
of the cigarette tax imposed by Article 20 of such
law.
* Section 1814 of the
Tax Law provides for imposition of criminal penal-
ties for violation.
of cigarette tax provisions, and section 1846
provides for seizure
and forfeiture of cigarettes.
The main deficiency
of these penalties is that they do not adequately
address the increasing
prevalence of illegal cigarettes.
STATEMENT
IN SUPPORT:
Cigarette smoking is
an avoidable health hazard, but the addictive qual-
ities in cigarettes
makes smoking a very difficult habit for a person to
break. For this reason,
it is the State's policy to prevent young people
in New York from becoming
addicted to cigarettes, a policy which is
reflected in existing
Public Health Law and Penal Law provisions that
prohibit the sale of
cigarettes to persons under 18 years old. Regretta-
bly, although these
laws significantly reduce the ability of minors to
obtain cigarettes, they
remain available to young would-be purchasers by
means other than face-to-face
sales. For example, aware of the practical
difficulties of verifying
a person's age in a non-face-to-face trans-
action, persons under
18 often receive cigarettes by mail-order or
Internet purchases from
out-of-state or unlicensed in-state vendors.
Recognizing this problem
and the proliferation of Internet sales, this
bill would make it unlawful
for persons who sell cigarettes to ship or
cause cigarettes to
be shipped to any person in the State who is not a
licensed or registered
cigarette dealer, an export warehouse proprietor
or an operator of a
customs bonded warehouse, or a government officer or
agency. Further, the
bill would make it unlawful for a common or
contract carrier to
knowingly transport cigarettes to such a person in
this State reasonably
believed by such carrier to be a person other than
a person authorized
to receive cigarettes. With few exceptions, ciga-
rette consumers will
thus have to purchase their cigarettes at a regis-
tered retail dealer's
place of business. As a result, these amendments
would ensure that the
Public Health Law's proof of age requirements
would not be evaded
by underage purchasers. Further, the State's Ciga-
rette Marketing Standards
Act (CMSA) in Article 20-A of the Tax Law,
which provides minimum
prices for sales of cigarettes in the State in
conjunction with the
State's tax on cigarettes, would not be avoided,
thereby further discouraging
smoking among persons under 18.
Additionally, very often,
mail order and Internet sales of cigarettes
are currently made without
payment of the State's excise and sales
taxes. Current law requires
the consumer to file and pay the state and
local cigarette use
taxes on the purchase of untaxed cigarettes (i.e.,
which includes Internet
and mail order sales), but consumers often do
not comply with these
requirements. Further, the Health Care Reform Act
of 2000 imposed a 55-cent
per pack tax increase on cigarettes which is
to be used to fund the
health care of New Yorkers.
Recognizing that the
frequency of cigarette sales to unregistered and
unlicensed vendors would
likely increase because of the tax increase on
cigarettes under the
Health Care Reform Act, the bill strengthens exist-
ing civil and criminal
penalties. Significantly, the bill creates a new
class D felony offense
for any unlicensed person who willfully possesses
or transports for the
purpose of sale or sells 30,000 or more cigarettes
in any unstamped or
unlawfully stamped packages. Also, the bill seeks to
punish repeat violators
by raising from a class A misdemeanor to a class
E felony the penalty
for a person who is convicted of possessing or
transporting for the
purpose of sale or selling less than 20,000 ciga-
rettes in unstamped
or unlawfully stamped packages after having been
previously convicted
of such conduct within the preceding five years. To
deter further the bootlegging
of illegal cigarettes, the bill raises the
civil penalties for
those who violate current registration requirements
for retail dealers.
Additionally, the bill makes it clear that a retail
dealer's license as
a lottery agent may be suspended, revoked or
canceled at a given
location whenever the retail dealer's registration
to sell cigarettes or
tobacco products has been suspended or revoked for
that location. Moreover,
the bill raises the dollar amount of existing
civil penalties that
may be imposed for possession of unstamped or
unlawfully stamped cigarettes
in addition to penalties that must be
imposed when an agent
fails to pay a required tax on cigarettes or fails
to file a return within
the time. Significantly, the bill establishes
penalty "minimums" that
must be imposed on those who knowingly bootleg
unlawful cigarettes.
LEGISLATIVE
HISTORY:
None.
BUDGET
IMPLICATIONS:
This proposal is necessary
to maintain the revenue estimate for ciga-
rettes contained in
the State FY 2000-2001 Executive Budget.
EFFECTIVE
DATE:
The bill shall take
effect on the ninetieth day after enactment,
provided that subdivision
two of section two of the bill shall take
effect January 1, 2001.
CHAPTER TEXT:
LAWS OF NEW YORK, 2000
AN ACT
to amend the public health law, in relation to the shipment of
cigarettes;
and to amend the tax law and the administrative code
of
the
city of New York, in relation to penalties for violations of the
cigarette
tax
Became a law August
16, 2000, with the approval of the Governor. Passed
on
message of necessity pursuant to Article III, section
14 of the
Constitution
by a majority vote, three-fifths being present.
The
People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:
Section
1. Legislative findings. The legislature finds and declares
that the shipment
of cigarettes sold via the internet or by telephone or
by mail order
to residents of this state poses a serious
threat to
public health,
safety, and welfare, to the funding of health care pursu-
ant to
the health care reform act of 2000, and to the economy of the
state. The legislature
also finds that when cigarettes are
shipped
directly
to a consumer, adequate proof that the purchaser is of legal
age cannot be
obtained by the vendor, which enables minors to avoid the
provisions
of article 13-F of the public health law. It is
also the
legislature's
finding that by preventing shipment of cigarettes directly
to consumers,
the State will be better able to measure and monitor ciga-
rette consumption
and to better determine the public health and fiscal
consequences
of smoking. The legislature further finds that existing
penalties for
cigarette bootlegging are inadequate. Therefore, the bill
enhances
existing penalties for possession of unstamped or unlawfully
stamped cigarettes.
§
2. The public health law is amended by adding a new section 1399-ll
to read as follows:
§
1399-ll. Unlawful shipment or transport of cigarettes. 1. It shall
be unlawful for any person engaged in the business of selling cigarettes
to ship or cause to be shipped any cigarettes to any
person in this
state who is not: (a) a person licensed as
a cigarette tax agent or
wholesale dealer under article twenty of the tax
law or registered
retail dealer under section four hundred eighty-a of the tax law; (b) an
export warehouse proprietor pursuant to chapter
52 of the internal
revenue code or an operator of a customs bonded warehouse pursuant
to
section 1311 or 1555 of title 19 of the United
States Code; or (c) a
person who is an officer, employee or agent of the United States govern-
ment, this state or a department, agency, instrumentality or
political
subdivision of the United States or this
state, when such person is
acting in accordance with his or her official duties. For purposes
of
this subdivision, a person is a licensed or registered agent
or dealer
described in paragraph (a) of this subdivision if
his or her name
appears on a list of licensed or registered agents or dealers published
by the department of taxation and finance, or if such person is licensed
or registered as an agent or dealer under article twenty of the tax law.
EXPLANATION--Matter
in italics is new; matter in
brackets [-] is old law
to be omitted.
CHAP. 262 2
2.
It shall be unlawful for any common or contract carrier to knowing-
ly transport cigarettes to any person in this state reasonably believed
by such carrier to be other than a person described in
paragraph (a),
(b) or (c) of subdivision one of this section. For
purposes of the
preceding sentence, if cigarettes are transported
to a home or resi-
dence, it shall be presumed that the common or contract
carrier knew
that such person was not a person described in paragraph (a), (b) or (c)
of subdivision one of this section. It shall be unlawful for
any other
person to knowingly transport cigarettes to any person in this
state,
other than to a person described in paragraph (a), (b) or (c) of
subdi-
vision one of this section. Nothing in this
subdivision shall be
construed to prohibit a person other than a common or contract
carrier
from transporting not more than eight hundred cigarettes at any one time
to any person in this state.
3. When a person engaged in the business of selling cigarettes
ships
or causes to be shipped any cigarettes to
any person in this state,
other than in the cigarette manufacturer's original container or
wrap-
ping, the container or wrapping must be plainly and visibly marked
with
the word "cigarettes".
4. Whenever a police officer designated in section 1.20 of the crimi-
nal procedure law or a peace officer designated in subdivision
four of
section 2.10 of such law, acting pursuant to his or her special duties,
shall discover any cigarettes which have been or which are being shipped
or transported in violation of this
section, such person is hereby
empowered and authorized to seize and take possession
of such ciga-
rettes, and such cigarettes shall be subject
to a forfeiture action
pursuant to the procedures provided for in article thirteen-A
of the
civil practice law and rules, as if such article specifically
provided
for forfeiture of cigarettes seized pursuant to this section as a
pre-
conviction forfeiture crime.
5. Any person who violates the provisions of subdivision one or two of
this section shall be guilty of a class A misdemeanor and for
a second
or subsequent violation shall be guilty of a class E felony.
In addi-
tion to the criminal penalty, the commissioner may impose a
civil fine
not to exceed five thousand dollars for each such
violation on any
person who violates subdivision one or two of this section. The commis-
sioner may impose a civil fine not to exceed five thousand dollars
for
each violation of subdivision three of
this section on any person
engaged in the business of selling cigarettes who ships or causes to
be
shipped any such cigarettes to any person in this state.
§
3. Paragraph (k) of subdivision 1 of section 480 of the tax law, as
amended by chapter
629 of the laws of 1996, is amended to
read as
follows:
(k)
No agent shall sell cigarettes and no distributor
shall sell
tobacco products
to an unlicensed wholesale dealer, or to a wholesale
dealer whose
license has been suspended or revoked, or to a retail deal-
er who
[has been forbidden to continue selling
cigarettes or tobacco
products, as the case may be] is
not registered under section four
hundred eighty-a of this article, or
whose registration has been
suspended or revoked, and no wholesale dealer shall sell
cigarettes or
tobacco
products to a retail dealer [so forbidden
after notice of the
prohibition] who is not registered
under section four hundred eighty-a
of this article, or whose registration has been suspended
or revoked,
and no retail
dealer [so forbidden] shall [continue
selling] sell
ciga-
rettes
or tobacco products unless
such dealer is registered under
section four hundred eighty-a of this article.
3 CHAP. 262
§
4. Subdivision 1 of section 480-a of the tax law
is amended by
adding a new
paragraph (e) to read as follows:
(e)
The commissioner may refuse to register as a retail dealer or may
revoke the registration of a retail dealer where the
applicant's or
retail dealer's place of business is at the same premises as
that of a
retail dealer whose retail dealer registration has been
revoked and
where such revocation is still in effect, unless the applicant or retail
dealer provides the commissioner with adequate documentation demonstrat-
ing that such applicant or retail dealer acquired the premises or
busi-
ness through an arm's length transaction as defined in this
paragraph
and that the sale or lease was not conducted, in whole or in
part, for
the purpose of permitting the original registrant to avoid the effect of
the previous revocation for the same premises. For purposes
of this
paragraph, "arm's length transaction" means a sale of a fee or all undi-
vided interests in real property, or lease of any
part thereof, or a
sale of a business, in good faith and for valuable consideration,
that
reflects the fair market value of such real property or lease, or
busi-
ness, in the open market, between two informed and
willing parties,
where neither is under any compulsion to participate in the transaction,
unaffected by any unusual conditions indicating a reasonable possibility
that the sale or lease was made
for the purpose of permitting the
original registrant to avoid the effect of the previous revocation
for
the same premises. The following sales or leases shall be presumed
not
to be arm's length transactions unless
adequate documentation is
provided demonstrating that the sale or lease
was not conducted, in
whole or in part, for the purpose of permitting the original registrant
to avoid the effect of the previous revocation for the same premises:
(i) a sale between relatives; or
(ii) a sale between related companies or partners in a business; or
(iii) a sale or lease affected by other facts or circumstances
that
would indicate that the sale or lease is entered into for the
primary
purpose of permitting the original registrant to avoid the effect of the
previous revocation for the same premises.
§
5. Subdivision 3 of section 480-a of the tax law, as added by chap-
ter 190 of the
laws of 1990, paragraph (a) as amended by chapter 629 of
the laws of 1996,
is amended to read as follows:
3.
In addition to any other penalty imposed by this chapter: (a) Any
retail dealer
who violates the provisions of this section shall, after
due notice
and an opportunity for a hearing, for a first violation be
liable for a
civil fine not less than five hundred dollars
but not to
exceed
[one] two
thousand dollars and for a second or subsequent
violation within
three years following a prior finding of violation be
liable
for a civil fine not less than
one thousand dollars but not to
exceed [two]
three
thousand five hundred dollars; or
(b)
Any person who owns or, if the owner is not the operator, then any
person who operates
one or more vending machines through which ciga-
rettes
or tobacco products are sold in this state and who violates the
provisions of
this section shall, after due notice and an opportunity
for a hearing,
for a first violation be liable for a civil fine not less
than seventy-five dollars but not to exceed
[one] two
hundred dollars
and for a second
or subsequent violation within three years following a
prior finding
of violation be liable for a civil fine not less
than two
hundred dollars but not to exceed [three]
six
hundred dollars.
§
6. Paragraph (d) of subdivision 4 of section 480-a of the tax
law,
as added
by chapter 629 of the laws of 1996, is amended
to read as
follows:
CHAP. 262 4
(d)
After review of the suspension or revocation of registration
by
the commissioner
or his designee is complete, or the time within which a
retail dealer
may request such review has expired without such a request
having
been made, notice of the suspension or revocation of
a retail
dealer
registration pursuant to this subdivision shall be given by the
commissioner
to the head of the division of the lottery for the purpose
of enforcement
of section sixteen hundred seven of this chapter and
such
division may suspend or revoke any license
issued with respect to a
lottery agent's specific location pursuant to article
thirty-four of
this chapter if such lottery agent is a retail
dealer of cigarettes
whose registration for such location is suspended or revoked pursuant to
this section. In addition, notice of such
suspension or revocation
shall also
be given to the division of alcoholic beverage control and
such suspension
or revocation shall constitute cause, for purposes of
section
one hundred eighteen of the alcoholic beverage control law, for
revocation, cancellation
or suspension of any license or permit issued
pursuant to such
law.
§
7. Paragraph (b) of subdivision 1 of section 481 of the tax law, as
amended by chapter
61 of the laws of 1989, is amended
to read as
follows:
(b)
(i) In addition to any other penalty
imposed by this article, the
commissioner
[of taxation and finance] may impose
a penalty of not more
than one hundred
fifty
dollars for each two hundred cigarettes,
or frac-
tion thereof,
in excess of [two] one
thousand cigarettes in unstamped or
unlawfully
stamped packages in the possession or under the control of
any person. In
addition, the commissioner may impose a penalty of not
more than
[fifty] seventy-five
dollars for each fifty cigars or one
pound of tobacco,
or fraction thereof, in excess
of two hundred fifty
cigars
or five pounds of tobacco in the possession or under the control
of any person
and a penalty of not more than one hundred fifty
dollars
for each
fifty cigars or pound of tobacco,
or fraction thereof, in
excess of five
hundred cigars or ten pounds of tobacco in the possession
or under the
control of any person, with respect to which the tobacco
products
tax has not been paid or assumed by a distributor or tobacco
products dealer;
provided, however, that any such penalty imposed shall
not exceed
[five] seven
thousand five hundred dollars
in the aggregate.
The commissioner
may impose a penalty of not more than [fifty]
seventy-
five dollars for each fifty cigars or one pound of
tobacco, or fraction
thereof, in excess
of fifty cigars or one pound of tobacco
in the
possession
or under the control of any tobacco
products dealer or
distributor appointed
by the commissioner, and a penalty of not more
than one
hundred fifty dollars for each
fifty cigars or pound of tobac-
co, or fraction
thereof, in excess of two hundred fifty cigars or five
pounds
of tobacco in the possession or under the control of
any such
dealer or distributor,
with respect to which the tobacco products tax
has not
been paid or assumed by a distributor or a tobacco products
dealer; provided,
however, that any such penalty imposed shall
not
exceed [ten]
fifteen
thousand dollars in the aggregate.
(ii)
The penalties imposed by this subparagraph may be imposed by the
commissioner in addition to any other penalty imposed by this
article,
but in lieu of the penalties imposed by subparagraph (i) of
this para-
graph:
(A) (I) not less than thirty dollars but not more than
two hundred
dollars for each two hundred cigarettes, or fraction thereof, in
excess
of one thousand cigarettes but less than or equal to five thousand ciga-
5 CHAP. 262
rettes in unstamped or unlawfully stamped packages knowingly
in the
possession or knowingly under the control of any person;
(II) not less than seventy-five dollars but not more than two hundred
dollars for each two hundred cigarettes, or fraction thereof, in
excess
of five thousand cigarettes but less than or equal to
twenty thousand
cigarettes in unstamped or unlawfully stamped packages knowingly in
the
possession or knowingly under the control of any person; and
(III) not less than one hundred dollars but not more than two hundred
dollars for each two hundred cigarettes, or fraction thereof, in
excess
of twenty thousand cigarettes in unstamped or unlawfully stamped
pack-
ages, knowingly in the possession or knowingly under the control of
any
person.
(B)(I) not less than twenty-five dollars but not more than one hundred
dollars for each fifty cigars or one pound of tobacco, or fraction ther-
eof, in excess of two hundred fifty cigars or five
pounds of tobacco
knowingly in the possession or knowingly under
the control of any
person, with respect to which the tobacco products tax has not been paid
or assumed by a distributor or tobacco products dealer; and
(II) not less than fifty dollars but not more than two hundred dollars
for each fifty cigars or pound of tobacco,
or fraction thereof, in
excess of five hundred cigars or ten pounds of tobacco knowingly in
the
possession or knowingly under the control of any person, with respect to
which the tobacco products tax has
not been paid or assumed by a
distributor or tobacco products dealer; provided, however, that any such
penalty imposed under this clause shall not exceed ten thousand dollars
in the aggregate.
(C) (I) not less than twenty-five dollars
but not more than one
hundred dollars for each fifty cigars or one pound of tobacco, or
frac-
tion thereof, in excess of fifty cigars or one pound of tobacco knowing-
ly in the possession or knowingly under the control of any person,
with
respect to which the tobacco products tax has not been paid or
assumed
by a distributor or tobacco products dealer; and
(II) not less than fifty dollars but not more than two hundred dollars
for each fifty cigars or pound of tobacco,
or fraction thereof, in
excess of two hundred fifty cigars or five pounds of tobacco
knowingly
in the possession or knowingly under the control
of any person, with
respect to which the tobacco products tax has not been paid or
assumed
by a distributor or a tobacco products dealer; provided, however,
that
any such penalty imposed under this clause shall not exceed twenty thou-
sand dollars in the aggregate.
(iii) Any penalty provided for in this paragraph shall
be determined
as provided
in section four hundred seventy-eight of this chapter, and
may be reviewed
only pursuant to such section. Such penalty shall
be
collected
in the same manner as the taxes imposed by this article. The
commissioner
[of taxation and finance,]
in [his] the
commissioner's
discretion, may
remit all or part of such penalty. Such penalty shall be
paid to
the department [of taxation
and finance] and disposed of as
hereinafter provided
with respect to moneys derived from the tax.
§
8. Subdivision (d) of section 1814 of the tax law, as added by chap-
ter 65 of the
laws of 1985, is amended to read as follows:
(d)
Any person, other than an agent [so authorized]
licensed by the
[tax
commission] commissioner,
who possesses or transports for the
purpose of sale
any unstamped or unlawfully stamped packages of ciga-
rettes
subject to tax imposed by section four hundred seventy-one
of
this chapter,
or who sells or offers for sale unstamped or unlawfully
stamped packages
of cigarettes in violation of the provisions of article
CHAP. 262 6
twenty of this
chapter shall be guilty of a misdemeanor. Any
person who
violates the provisions of this subdivision after having previously been
convicted of a violation of this subdivision within the preceding
five
years shall be guilty of a class E felony.
§
9. Subdivision (e) of section 1814 of the tax law, as added by chap-
ter 65 of the
laws of 1985, is amended to read as follows:
(e)
(1) Any person, other than an agent [so
authorized] licensed
by
the [tax
commission] commissioner,
who willfully possesses or transports
for the purpose
of sale twenty thousand or more cigarettes subject to
the tax
imposed by section four hundred seventy-one of this chapter in
any unstamped
or unlawfully stamped packages or who willfully sells or
offers
for sale twenty thousand or more cigarettes in any unstamped or
unlawfully stamped
packages in violation of article twenty of this chap-
ter shall be
guilty of a class E felony.
(2)
Any person, other than an agent licensed by the commissioner, who
willfully possesses or transports for the purpose of sale thirty
thou-
sand or more cigarettes subject to the tax imposed
by section four
hundred seventy-one of this chapter in
any unstamped or unlawfully
stamped packages or who willfully sells or offers for sale thirty
thou-
sand or more cigarettes in any unstamped or unlawfully stamped packages
in violation of article twenty of this chapter shall be
guilty of a
class D felony.
§
10. Subdivision b of section 11-1317 of the administrative code of
the city of New
York is amended to read as follows:
b.
(1)
In addition to any other penalty imposed by this section, the
commissioner
of finance may impose a penalty of
not more than one
hundred dollars
for each two hundred cigarettes or fraction thereof in
excess
of [two] one
thousand cigarettes in unstamped or unlawfully
stamped packages
in the possession or under the control of any person.
Such penalty
shall be determined as provided in section 11-1310 of this
chapter, and
may be reviewed only pursuant to such section. Such penalty
may be enforced
in the same manner as the tax imposed by this chapter.
The commissioner
of finance, in his or her discretion, may remit all or
part of such
penalty. Such penalty shall be paid and disposed of in the
same manner as
other revenues under this chapter.
(2)
The penalties imposed by this paragraph may be
imposed by the
commissioner of finance in addition to any other penalty imposed by this
section, but in lieu of the penalties imposed by paragraph one of
this
subdivision: (a) not less than thirty dollars
but not more than two
hundred dollars for each two hundred cigarettes, or fraction thereof, in
excess of one thousand cigarettes but less than or equal to five
thou-
sand cigarettes in unstamped or unlawfully stamped packages knowingly in
the possession or knowingly under the control of
any person; (b) not
less than seventy-five dollars but not more than two hundred dollars for
each two hundred cigarettes, or fraction thereof, in
excess of five
thousand cigarettes but less than or equal to twenty thousand cigarettes
in unstamped or unlawfully stamped packages knowingly in the possession
or knowingly under the control of any person; and (c) not less than
one
hundred dollars but not more than two
hundred dollars for each two
hundred cigarettes, or fraction thereof, in excess of twenty
thousand
cigarettes in unstamped or unlawfully stamped packages, knowingly in the
possession or knowingly under the control of any person.
Such penalty
shall be determined as provided in section 11-1310 of this chapter,
and
may be reviewed only pursuant to such
section. Such penalty may be
enforced in the same manner as the tax imposed by this
chapter. The
commissioner of finance, in his or her discretion, may remit all or part
7 CHAP. 262
of
such penalty. Such penalty shall be paid and disposed of in the same
manner as other revenues under this chapter.
§
11. Subdivisions (b) and (c) of section 11-4012 of the administra-
tive code of
the city of New York, as added by chapter 765 of the laws
of 1985, are
amended to read as follows:
(b)
Any person, other than an agent so authorized by the commissioner
of finance, who
possesses or transports for the purpose of sale
any
unstamped
or unlawfully stamped packages of cigarettes subject to tax
under chapter
thirteen of this title, or who sells or offers for sale
unstamped
or unlawfully stamped packages of cigarettes in violation of
the provisions
of such chapter shall be guilty of a misdemeanor.
Any
person who violates the provisions of this
subdivision after having
previously been convicted of a violation of this subdivision within
the
preceding five years shall be guilty of a class E felony.
(c)
(1) Any person, other
than an agent so authorized by the commis-
sioner of finance,
who willfully possesses or transports for the purpose
of sale twenty
thousand or more cigarettes subject to the tax imposed by
chapter thirteen
of this title in any unstamped or unlawfully stamped
packages
or who willfully sells or offers for sale twenty thousand or
more cigarettes
in any unstamped or unlawfully stamped packages
in
violation of
such chapter shall be guilty of a class E felony.
(2)
Any person, other than an agent appointed by the commissioner of
finance, who willfully possesses or transports for the purpose of
sale
thirty thousand or more cigarettes subject to the tax imposed by chapter
thirteen of this title in any unstamped or unlawfully stamped
packages
or who willfully sells or offers for sale thirty thousand or more
ciga-
rettes in any unstamped or unlawfully stamped packages in violation
of
such chapter shall be guilty of a class D felony.
§
12. Severability clause. If any clause, sentence, paragraph, subdi-
vision,
section or part of this act shall be adjudged by any court
of
competent jurisdiction
to be invalid, such judgment shall not affect,
impair,
or invalidate the remainder thereof, but shall be confined
in
its operation
to the clause, sentence, paragraph, subdivision, section
or part thereof
directly involved in the controversy in which such judg-
ment shall have
been rendered. It is hereby declared to be the intent of
the legislature
that this act would have been enacted even if such
invalid provisions
had not been included herein.
§
13. This act shall take effect on the ninetieth day after it
shall
have become
a law; provided, however, that subdivision two of section
1399-ll of the
public health law as added by section two of this
act
shall take effect
January 1, 2001.
The Legislature
of the STATE OF NEW YORK ss:
Pursuant
to the authority vested in us by section 70-b of the Public
Officers Law,
we hereby jointly certify that this slip copy of
this
session law was
printed under our direction and, in accordance with such
section, is entitled
to be read into evidence.
JOSEPH L. BRUNO
SHELDON SILVER
Temporary
President of the Senate
Speaker of the Assembly