HB 1459CS

CHAMBER ACTION




2The Committee on Business Regulation recommends the following:
3
4     Committee Substitute
5     Remove the entire bill and insert:
6
A bill to be entitled
7An act relating to transportation and sale of cigarettes;
8amending s. 210.01, F.S.; revising and providing
9definitions; amending s. 210.05, F.S.; providing stamp
10requirements for cigarettes in transport; providing stamp
11exceptions for certain cigarettes; providing
12nonapplicability of stamp requirements for certain
13cigarettes; requiring transporters of certain cigarettes
14to submit certain reports; requiring such transporters to
15make certain certifications under oath and subject to
16penalties for perjury; providing a definition; providing
17applicability; amending s. 210.06, F.S.; revising
18requirements for and limitations on the affixation of
19stamps; providing requirements with respect to receipt,
20possession, storage, and transport of unstamped cigarette
21packages; creating s. 210.085, F.S.; requiring
22manufacturers, importers, distributing agents, dealers,
23and retail dealers to hold a current, valid permit to
24sell, distribute, or receive cigarettes; amending s.
25210.09, F.S.; providing notice and filing guidelines for
26certain persons shipping unstamped cigarette packages;
27authorizing certain law enforcement officials to inspect
28certain shipping vehicles; amending s. 210.12, F.S.;
29authorizing the state to claim certain property and
30materials from certain dealers and retailers who attempt
31to defraud the state; authorizing the destruction of
32certain cigarettes; amending s. 210.15, F.S.; providing
33criteria for permit application; prohibiting issuance,
34maintenance, or renewal of certain permits for certain
35applicants; providing guidelines for permit application
36denial; amending s. 210.18, F.S.; expanding the group of
37violators subject to criminal liability; prohibiting the
38sale or possession for sale of counterfeit cigarettes;
39providing penalties; creating s. 210.181, F.S.; providing
40civil penalties for failure to comply with certain duties
41or pay certain taxes; providing an effective date.
42
43Be It Enacted by the Legislature of the State of Florida:
44
45     Section 1.  Subsections (6) and (7) of section 210.01,
46Florida Statutes, are amended, and subsections (19) through (23)
47are added to said section, to read:
48     210.01  Definitions.--When used in this part the following
49words shall have the meaning herein indicated:
50     (6)  "Wholesale dealer" means any person located inside or
51outside this state who sells cigarettes to retail dealers or
52other persons for purposes of resale only, or any person who
53operates more than one cigarette vending machine located in more
54than one place of business. Such term shall not include any
55cigarette manufacturer, export warehouse proprietor, or importer
56with a valid permit under 26 U.S.C. s. 5712 if such person sells
57or distributes cigarettes in this state only to dealers who are
58agents and who hold valid and current permits under s. 210.15 or
59to an export warehouse proprietor or another manufacturer.
60     (7)  "Retail dealer" means any person located inside or
61outside this state other than a wholesale dealer engaged in the
62business of selling cigarettes, including persons licensed
63pursuant to s. 569.003.
64     (19)  "Stamp" or "stamps" means the indicia required to be
65placed on cigarette packages that evidences payment of the tax
66on cigarettes under s. 210.02.
67     (20)  "Importer" means any person with a valid permit under
6826 U.S.C. s. 5712 who imports into the United States, directly
69or indirectly, a finished cigarette for sale or distribution.
70     (21)  "Manufacturer" means any person with a valid permit
71under 26 U.S.C. s. 5712 who manufactures, fabricates, assembles,
72processes, or labels a finished cigarette.
73     (22)  "Counterfeit cigarettes" means cigarettes that have
74false manufacturing labels, tobacco product packs without tax
75stamps or with counterfeit tax stamps, or any combination
76thereof.
77     (23)  "Brand family" means all styles of cigarettes sold
78under the same trademark and differentiated from one another by
79means of additional modifiers or descriptors, including, but not
80limited to, "menthol," "lights," "kings," and "100s," and
81includes any brand name used alone or in conjunction with any
82other word, trademark, logo, symbol, motto, selling message,
83recognizable pattern of colors, or any other indicia of product
84identification identical or similar to, or identifiable with, a
85previously known brand of cigarettes.
86     Section 2.  Subsection (6) is added to section 210.05,
87Florida Statutes, to read:
88     210.05  Preparation and sale of stamps; discount.--
89     (6)(a)  A person may not transport or cause to be
90transported from this state cigarettes for sale in another state
91without first affixing to the cigarettes the stamp required by
92the state in which the cigarettes are to be sold or paying any
93other excise tax on the cigarettes imposed by the state in which
94the cigarettes are to be sold.
95     (b)  A person may not affix to cigarettes the stamp
96required by another state or pay any other excise tax on the
97cigarettes imposed by another state if the other state prohibits
98stamps from being affixed to the cigarettes, prohibits the
99payment of any other excise tax on the cigarettes, or prohibits
100the sale of the cigarettes.
101     (c)  The requirements of paragraphs (a) and (b) do not
102apply to cigarettes with respect to which the manufacturer or
103importer is either a Participating Manufacturer as defined in
104section II(jj) of the Master Settlement Agreement or is in full
105compliance with the Qualifying Statute as defined in section
106IX(d)(2)(E) of the Master Settlement Agreement of the state in
107which the cigarettes are to be sold. An exemption pursuant to
108this paragraph may only be asserted with respect to cigarettes
109that, in the case of a Participating Manufacturer, are deemed to
110be its cigarettes for purposes of calculating its payments under
111the Master Settlement Agreement for the relevant year in the
112volumes and shares determined pursuant to the Master Settlement
113Agreement and, in the case of any other manufacturer or
114importer, are deemed to be its cigarettes for purposes of the
115applicable Qualifying Statute. For purposes of this paragraph,
116the term "Master Settlement Agreement" means the settlement
117agreement and related documents entered into in 1998 by 46
118states and leading United States tobacco manufacturers. A person
119asserting an exemption pursuant to this paragraph shall submit
120the report required by paragraph (d) and shall certify as
121provided therein.
122     (d)  On or before the 10th day of each month, a person who
123transports or causes to be transported from this state
124cigarettes for sale in another state shall submit to the
125division a report identifying the quantity and brand family of
126each brand of the cigarettes transported or caused to be
127transported in the preceding calendar month and the name and
128address of each recipient of the cigarettes. Such person shall
129also certify under oath and subject to the penalties of perjury
130that:
131     1.  The stamps required by paragraph (a) have been affixed
132in accordance with said paragraph or that such stamps were not
133affixed per paragraph (b); or
134     2.  The requirements of paragraph (c) have been satisfied.
135     (e)  For purposes of this subsection, the term "person"
136means an individual, partnership, committee, association,
137corporation, or any other organization or group of persons.
138"Person" does not include any common or contract carrier or any
139public warehouse that is not owned, in whole or in part,
140directly or indirectly, by the person transporting the
141cigarettes or causing the transport to be made.
142     (f)  Nothing in this subsection shall be deemed to
143authorize the possession or transportation of cigarettes by any
144person not so authorized by another provision of this part.
145     Section 3.  Subsection (1) of section 210.06, Florida
146Statutes, is amended, and subsection (5) is added to said
147section, to read:
148     210.06  Affixation of stamps; presumption.--
149     (1)  Every dealer within or without the state shall affix
150or cause to be affixed to such package or container of such
151cigarettes such, stamps as are required under this section
152within 10 days after receipt of such products. Dealers outside
153this state shall affix such stamps before the shipment of
154cigarettes into this state, evidencing the payment of the tax
155imposed by virtue of this part before such cigarettes are
156offered for sale or use or consumed or before they are otherwise
157disposed of in the state.
158     (a)  A tax stamp shall be applied to all cigarette packages
159intended for sale or distribution to consumers subject to the
160tax imposed under s. 210.02, except as otherwise provided in
161this part.
162     (b)  No stamp shall be applied to any cigarette package
163exempt from tax under 26 U.S.C. s. 5704 that is distributed by a
164manufacturer pursuant to federal regulations.
165     (c)  Dealers may apply stamps only to cigarette packages
166received directly from a manufacturer or importer of cigarettes
167who possesses a valid and current permit under 26 U.S.C. s.
1685712.
169     (5)  Except as provided in s. 210.09(1), no person, other
170than a dealer that receives unstamped cigarette packages
171directly from a cigarette manufacturer or importer in accordance
172with this section and s. 210.085, shall hold or possess an
173unstamped cigarette package. Dealers shall be permitted to set
174aside, without application of stamps, only such part of the
175dealer's stock that is identified for sale or distribution
176outside this state. If a dealer maintains stocks of unstamped
177cigarette packages, such unstamped packages shall be stored
178separately from stamped product packages. No unstamped cigarette
179packages shall be transferred by a dealer to another facility of
180the dealer within this state or to another person within this
181state.
182     Section 4.  Section 210.085, Florida Statutes, is created
183to read:
184     210.085  Transactions only with permitted manufacturers,
185importers, distributing agents, dealers, and retail dealers.--A
186manufacturer, importer, or distributing agent may sell or
187distribute cigarettes to a person located or doing business
188within this state, including on any tribal lands located within
189the borders of this state, only if such person is a dealer with
190a valid, current permit under s. 210.15. A dealer may sell or
191distribute cigarettes to a person located or doing business
192within this state, including on any tribal lands located within
193the borders of this state, only if such person is a dealer or
194retail dealer with a valid, current permit under s. 569.003. A
195dealer may obtain cigarettes only from a manufacturer or
196importer who possesses a valid, current permit under 26 U.S.C.
197s. 5712 or from a distributing agent or dealer with a valid,
198current permit under s. 210.15. A retail dealer may obtain
199cigarettes only from a manufacturer or dealer with a valid,
200current permit under s. 210.15.
201     Section 5.  Subsection (1) of section 210.09, Florida
202Statutes, is amended to read:
203     210.09  Records to be kept; reports to be made;
204examination.--
205     (1)(a)  Every person who shall possess or transport any
206unstamped cigarettes upon the public highways, roads, or streets
207of the state, shall be required to have in his or her actual
208possession invoices or delivery tickets for such cigarettes. The
209absence of such invoices or delivery tickets shall be prima
210facie evidence that such person is a dealer in cigarettes in
211this state and subject to the provisions of this part.
212     (b)  Any person who ships unstamped cigarette packages into
213this state other than to a dealer holding a valid, current
214permit pursuant to s. 210.15 shall first file with the division
215a notice of such shipment. This paragraph shall not apply to any
216common or contract carrier that is transporting cigarettes
217through this state to another location outside this state under
218a proper bill of lading or freight bill that states the
219quantity, source, and destination of such cigarettes.
220     (c)  In any case in which the division or its duly
221authorized agent, or any law enforcement officer of this state,
222has knowledge or reasonable grounds to believe that any vehicle
223is transporting cigarettes in violation of this part, the
224division, such agent, or such law enforcement officer is
225authorized to stop such vehicle and inspect the vehicle for
226contraband cigarettes.
227     Section 6.  Subsection (1) of section 210.12, Florida
228Statutes, is amended, subsections (2) through (6) of said
229section are renumbered as subsections (4) through (8),
230respectively, and new subsections (2) and (3) are added to said
231section, to read:
232     210.12  Seizures; forfeiture proceedings.--
233     (1)  The state, acting by and through the division, shall
234be authorized and empowered to seize, confiscate, and forfeit
235for the use and benefit of the state, any cigarettes upon which
236taxes payable hereunder may be unpaid or that are otherwise held
237in violation of the requirements of this chapter, and also any
238vending machine or receptacle in which such cigarettes upon
239which taxes have not been paid are held for sale, or any vending
240machine that does not have affixed thereto the identification
241sticker required by the provisions of s. 210.07, or which does
242not display at all times at least one package of each brand of
243cigarettes located therein so the same is clearly visible and
244arranged in such a manner that the cigarette tax stamp or meter
245impression of the stamp affixed thereto is clearly visible. Such
246seizure may be made by the division, its duly authorized
247representative, any sheriff or deputy sheriff, or any police
248officer.
249     (2)  All fixtures, equipment, and other materials and
250personal property on the premises of any dealer or retail dealer
251who, with intent to defraud the state, fails to keep or make any
252record, return, report, or inventory required by this part;
253keeps or makes any false or fraudulent record, return, report,
254or inventory required by this part; refuses to pay any tax
255imposed by this part; or attempts in any manner to evade or
256defeat the requirements of this part shall be forfeited to the
257state.
258     (3)  All cigarettes seized, confiscated, and forfeited to
259the state under this part shall be destroyed.
260     Section 7.  Subsection (1) of section 210.15, Florida
261Statutes, is amended to read:
262     210.15  Permits.--
263     (1)(a)  Every person, firm, or corporation desiring to
264engage in business as a manufacturer, importer, exporter,
265distributing agent, or wholesale dealer of cigarettes deal in
266cigarettes as a distributing agent, wholesale dealer, or
267exporter within this state shall file with the division an
268application for a cigarette permit for each place of business
269located within this state or, in the absence of such place of
270business in this state, for wherever its principal place of
271business is located with the Division of Alcoholic Beverages and
272Tobacco. Every application for a cigarette permit shall be made
273on forms furnished by the division and shall set forth the name
274under which the applicant transacts or intends to transact
275business, the location of the applicant's place of business
276within the state, if any, and such other information as the
277division may require. If the applicant has or intends to have
278more than one place of business dealing in cigarettes within
279this state, the application shall state the location of each
280place of business. If the applicant is an association, the
281application shall set forth the names and addresses of the
282persons constituting the association, and if a corporation, the
283names and addresses of the principal officers thereof and any
284other information prescribed by the division for the purpose of
285identification. The application shall be signed and verified by
286oath or affirmation by the owner, if a natural person, and in
287the case of an association or partnership, members or partners
288thereof, and in the case of a corporation, by an executive
289officer thereof or by any person specifically authorized by the
290corporation to sign the application, to which shall be attached
291the written evidence of this authority. The cigarette permit for
292a distributing agent shall be issued annually for which an
293annual fee of $5 shall be charged.
294     (b)  The holder of any duly issued, annual permit for a
295distributing agent shall be entitled to a renewal of his or her
296annual permit from year to year as a matter of course, on or
297before July 1, upon making application to the division and upon
298payment of this annual permit fee.
299     (c)  Permits The permit for a distributing agent, wholesale
300dealer, or exporter shall be issued only to persons of good
301moral character, who are not less than 18 years of age.
302Distributing agent, wholesale dealer, or exporter Permits to
303corporations shall be issued only to corporations whose officers
304are of good moral character and not less than 18 years of age.
305There shall be no exemptions from the permit fees herein
306provided to any persons, association of persons, or corporation,
307any law to the contrary notwithstanding.
308     (d)  No distributing agent, wholesale dealer, or exporter
309permit shall be issued, maintained, or renewed if the applicant,
310its officers, or any person or persons owning directly or
311indirectly, in the aggregate, more than 10 percent of the
312ownership interests in the applicant:
313     1.  Owes $500 or more in delinquent cigarette taxes;
314     2.  Had a cigarette importer, retail dealer, or dealer
315permit revoked by the division within the previous 2 years;
316     3.  Has been convicted of selling stolen or counterfeit
317cigarettes, receiving stolen cigarettes, or being involved in
318the counterfeiting of cigarettes; or
319     4.  to any person who Has been convicted within the past 5
320years of any offense against the cigarette laws of this state or
321who has been convicted in this state, any other state, or the
322United States during the past 5 years of any offense designated
323as a felony by such state or the United States, or to a
324corporation, any of whose officers have been so convicted. The
325term "convicted" "conviction" shall include an adjudication of
326guilt on a plea of guilty or a plea of nolo contendere, or the
327forfeiture of a bond when charged with a crime.
328     (e)(d)  The division may refuse to issue a distributing
329agent, wholesale, or exporter permit to any person, firm, or
330corporation whose permit under the cigarette law has been
331revoked or to any corporation, an officer of which has had his
332or her permit under the cigarette law revoked, or to any person
333who is or has been an officer of a corporation whose permit has
334been revoked under the cigarette law. Any permit issued to a
335firm or corporation prohibited from obtaining such permit under
336the cigarette law may be revoked by the division.
337     (f)(e)  Prior to an application for a distributing agent,
338wholesale dealer, or exporter permit being approved, the
339applicant shall file a set of fingerprints on forms provided by
340the division. The applicant shall also file a set of
341fingerprints for any person or persons interested directly or
342indirectly with the applicant in the business for which the
343permit is being sought, when so required by the division. If the
344applicant or any person interested with the applicant, either
345directly or indirectly, in the business for which the permit is
346sought shall be such a person as is within the definition of
347persons to whom a distributing agent, wholesale dealer, or
348exporter permit shall be denied, then the application may be
349denied by the division. If the applicant is a partnership, all
350members of the partnership are required to file said
351fingerprints, or if a corporation, all principal officers of the
352corporation are required to file said fingerprints. The
353cigarette permit for a wholesale dealer or exporter shall be
354originally issued at a fee of $100, which sum is to cover the
355cost of the investigation required before issuing such permit.
356     (g)(f)  The cigarette permits issued under this section
357permit for a wholesale dealer or exporter shall be renewed from
358year to year as a matter of course, at an annual cost of $100,
359on or before July 1, upon making application to the division and
360upon payment of the annual renewal fee.
361     (h)(g)  Permittees, by acceptance of their permits, agree
362that their places of business or vehicles transporting
363cigarettes shall always be subject to be inspected and searched
364without a search warrant for the purpose of ascertaining that
365all provisions of this part are complied with by authorized
366employees of the division and also by sheriffs, deputy sheriffs,
367and police officers during business hours or during any other
368time such premises are occupied by the permittee or other
369persons. Retail cigarette dealers and manufacturers'
370representatives, by dealing in cigarettes, agree that their
371places of business or vehicles transporting cigarettes shall
372always be subject to inspection and search without a search
373warrant for the purpose of ascertaining that all provisions of
374this part are complied with by authorized employees of the
375division and also by sheriffs, deputy sheriffs, and police
376officers during business hours or other times when the premises
377are occupied by the retail dealer or manufacturers'
378representatives or other persons.
379     (i)(h)  No retail sales of cigarettes may be made at a
380location for which a wholesale dealer, distributing agent, or
381exporter permit has been issued. The excise tax on sales made to
382any traveling location, such as an itinerant store or industrial
383caterer, shall be paid into the General Revenue Fund
384unallocated. Cigarettes may be purchased for retail purposes
385only from a person holding a wholesale dealer permit. The
386invoice for the purchase of cigarettes must show the place of
387business for which the purchase is made and the cigarettes
388cannot be transferred to any other place of business for the
389purpose of resale.
390     Section 8.  Subsections (2), (3), and (6) of section
391210.18, Florida Statutes, are amended, and subsection (9) is
392added to said section, to read:
393     210.18  Penalties for tax evasion; reports by sheriffs.--
394     (2)  Except as otherwise provided in this section, any
395person wholesale or retail dealer who fails, neglects, or
396refuses to comply with, or violates the provisions of, this part
397or the rules adopted and regulations promulgated by the division
398under this part commits is guilty of a misdemeanor of the first
399degree, punishable as provided in s. 775.082 or s. 775.083. Any
400person wholesale or retail dealer who has been convicted of a
401violation of any provision of the cigarette tax law and who is
402thereafter convicted of a further violation of the cigarette tax
403law is, upon conviction of such further offense, guilty of a
404felony of the third degree, punishable as provided in s.
405775.082, s. 775.083, or s. 775.084.
406     (3)  Any person who falsely or fraudulently makes, forges,
407alters, or counterfeits any stamp or impression die used in
408meter machines prescribed by the division under the provisions
409of this part; or, with intent to evade taxes, jams, tampers
410with, or alters such a machine; or causes or procures to be
411falsely or fraudulently made, forged, altered, or counterfeited
412any such stamp or die; or knowingly and willfully utters,
413purchases, passes or tenders as true any such false, altered, or
414counterfeited stamp or die impression; or, with the intent to
415defraud the state, fails to comply with any other requirement of
416this chapter commits is guilty of a felony of the third degree,
417punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
418     (6)(a)  Every person, firm, or corporation, other than a
419licensee under the provisions of this part, who possesses,
420removes, deposits, or conceals, or aids in the possessing,
421removing, depositing, or concealing of, any unstamped cigarettes
422not in excess of 50 cartons is guilty of a misdemeanor of the
423second degree, punishable as provided in s. 775.082 or s.
424775.083. In lieu of the penalties provided in those sections,
425however, the person, firm, or corporation may pay the tax plus a
426penalty equal to the amount of the tax authorized under s.
427210.02 on the unstamped cigarettes.
428     (a)(b)  Every person, firm, or corporation, other than a
429licensee under the provisions of this part, who possesses,
430removes, deposits, or conceals, or aids in the possessing,
431removing, depositing, or concealing of, any unstamped cigarettes
432in excess of 50 cartons is presumed to have knowledge that they
433have not been taxed and commits is guilty of a felony of the
434third degree, punishable as provided in s. 775.082, s. 775.083,
435or s. 775.084.
436     (b)(c)  This section does not apply to a person possessing
437not in excess of three cartons of such cigarettes purchased by
438such possessor outside the state in accordance with the laws of
439the place where purchased and brought into this state by such
440possessor. The burden of proof that such cigarettes were
441purchased outside the state and in accordance with the laws of
442the place where purchased shall in all cases be upon the
443possessor of such cigarettes.
444     (9)  Notwithstanding any other provision of law, the sale
445or possession for sale of counterfeit cigarettes by any person
446or by a manufacturer, importer, distributing agent, wholesale
447dealer, or retail dealer shall result in the seizure of the
448product and related machinery by the division or any law
449enforcement agency and shall be punishable as follows:
450     (a)1.  A first violation with a total quantity of less than
451two cartons of cigarettes or the equivalent amount of other
452cigarettes shall be punishable by a fine not to exceed $1,000 or
453five times the retail value of the cigarettes involved,
454whichever is greater, or imprisonment not to exceed 5 years, or
455both.
456     2.  A subsequent violation with a total quantity of less
457than two cartons of cigarettes or the equivalent amount of other
458cigarettes shall be punishable by a fine not to exceed $5,000 or
459five times the retail value of the cigarettes involved,
460whichever is greater, or imprisonment not to exceed 5 years, or
461both, and shall also result in the revocation by the division of
462the permit of the manufacturer, importer, distributing agent,
463wholesale dealer, or retail dealer.
464     (b)1.  A first violation with a total quantity of two or
465more cartons of cigarettes or the equivalent amount of other
466cigarettes shall be punishable by a fine not to exceed $2,000 or
467five times the retail value of the cigarettes involved,
468whichever is greater, or imprisonment not to exceed 5 years, or
469both.
470     2.  A subsequent violation with a quantity of two cartons
471of cigarettes or more or the equivalent amount of other
472cigarettes shall be punishable by a fine not to exceed $50,000
473or five times the retail value of the cigarettes involved,
474whichever is greater, or imprisonment not to exceed 5 years, or
475both, and shall also result in the revocation by the division of
476the permit of the manufacturer, importer, distributing agent,
477wholesale dealer, or retail dealer.
478
479For purposes of this subsection, any counterfeit cigarettes
480seized by the division shall be destroyed.
481     Section 9.  Section 210.181, Florida Statutes, is created
482to read:
483     210.181  Civil penalties.--
484     (1)  Whoever knowingly omits, neglects, or refuses to
485comply with any duty imposed upon him or her by this part, or to
486do or cause to be done any of the things required by this part,
487or does anything prohibited by this part shall, in addition to
488any other penalty provided in this part, be liable for a fine of
489$1,000 or five times the retail value of the cigarettes
490involved, whichever is greater.
491     (2)  Whoever fails to pay any tax imposed by this part at
492the time prescribed by law or rules shall, in addition to any
493other penalty provided in this part, be liable for a penalty of
494five times the unpaid tax due.
495     Section 10.  This act shall take effect upon becoming a
496law.


CODING: Words stricken are deletions; words underlined are additions.