ENGROSSED
Senate Bill No. 475
(By Senators Tomblin, Mr. President, and Anderson, Bailey,
Ball, Boley, Bowman, Chafin, Craigo, Dawson, Deem, Dittmar,
Edgell, Fanning, Hunter, Jackson, Kessler, Love, McCabe,
McKenzie, Minard, Minear, Mitchell, Oliverio, Plymale,
Prezioso, Redd, Ross, Sharpe, Snyder, Sprouse, Walker, Wooton,
Unger and Helmick)
____________
[Introduced February 14, 2000; referred to the Committee on
Health and Human Resources; and then to the Committee on
Finance.]
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A BILL to amend chapter sixty of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article nine, relating to
additional requirements with respect to the sale of
cigarettes; prohibiting certain types of sales; providing
for restrictions with respect to distributors; providing for
civil administrative penalties; providing that certain acts
shall constitute certain unfair or deceptive acts or practices; providing for seizure and forfeiture of
contraband; providing for powers, duties, and authority of
the state tax commissioner and alcohol beverage control
commissioner with respect to the foregoing; and creating a
private cause of action to enforce provisions of article.
Be it enacted by the Legislature of West Virginia:
That chapter sixty of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article nine, to read as
follows:
ARTICLE 9. CIGARETTES PRODUCED FOR EXPORT; IMPORTED CIGARETTES.
§60-9-1. Definitions.
(a) As used in this article:
(1) "Package" means a pack, carton or container of any kind
in which cigarettes are offered for sale, sold, or otherwise
distributed, or intended for distribution, to consumers.
(2) "Importer" means "importer" as that term is defined in
26 U.S.C. 5702(1).
(3) "Person" means and includes any individual, firm,
association, company, partnership, corporation, joint-stock
company, club, agency, syndicate, municipal corporation or other political subdivision of this state, trust, receiver, trustee,
fiduciary or conservator, and when used in connection with any
penalties imposed by this article, means and includes officers,
directors, trustees or members of any firm, copartnership,
association, corporation, trust or any other unit acting as a
group.
(4) "Retailer" means and includes every person in this
state, other than a wholesaler or subjobber, as defined in
section two, article seventeen, chapter eleven of this code,
engaged in the selling of cigarettes at retail to a consumer or
to any person for any purpose other than resale.
§60-9-2. Cigarettes produced for export -- prohibitions.
(a) It is unlawful for any person:
(1) To sell or distribute to consumers in this state, to
acquire, hold, own, possess or transport, for sale or
distribution in this state, or to import, or cause to be
imported, into this state for sale or distribution in this state:
(A) Any cigarettes the package of which:
(i) Bears any statement, label, stamp, sticker, or notice
indicating that the manufacturer did not intend the cigarettes to
be sold, distributed, or used in the United States, including, but not limited to, labels stating "for export only," "U.S.
tax-exempt," "for use outside U.S." or similar wording; or
(ii) Does not comply with:
(I) All requirements imposed by or pursuant to federal law
regarding warnings and other information on packages of
cigarettes manufactured, packaged or imported for sale,
distribution, or use in the United States, including, but not
limited to, the precise warning labels specified in the Federal
Cigarette Labeling and Advertising Act, 15 U.S.C. 1333; and
(II) All federal trademark and copyright laws;
(B) Any cigarettes imported into the United States in
violation of 26 U.S.C. 5754 or any other federal law or the
implementing federal regulations;
(C) Any cigarettes that the person otherwise knows or has
reason to know the manufacturer did not intend to be sold,
distributed or used in the United States; or
(D) Any cigarettes for which there has not been submitted to
the secretary of the United States department of health and human
services, the list or lists of the ingredients added to tobacco
in the manufacture of such cigarettes required by the Federal
Cigarette Labeling and Advertising Act, 15 U.S.C. 1355a;
(2) To alter the package of any cigarettes, prior to sale or
distribution to the ultimate consumer, so as to remove, conceal
or obscure:
(A) Any statement, label, stamp, sticker or notice described
in subparagraph (i), paragraph (A), subdivision (1), subsection
(a) of this section; or
(B) Any health warning that is not specified in, or does not
conform with the requirements of, the Federal Cigarette Labeling
and Advertising Act, 15 U.S.C. 1333; or
(3) To affix any stamp required pursuant to article
seventeen, chapter eleven of this code to the package of any
cigarettes described in subdivision (1), subsection (a) of this
section or altered in violation of subdivision (2), subsection
(a) of this section.
§60-9-3. Imported cigarettes -- requirements.
On the first business day of each month, each person
authorized to affix the state tax stamp to cigarettes shall file
with the state tax commissioner, for all cigarettes imported into
the United States to which the person has affixed the tax stamp
in the preceding month, the following:
(1) A copy of the permit issued pursuant to the Internal Revenue Code, 26 U.S.C. 5713, to the person importing the
cigarettes into the United States allowing such person to import
the cigarettes; and
(2) A copy of the customs form containing, with respect to
the cigarettes, the internal revenue tax information required by
the U.S. bureau of alcohol, tobacco and firearms; and
(3) A statement, signed by the person under penalty of
perjury, which shall be treated as confidential by the
commissioner and exempt from disclosure under the freedom of
information act, article one, chapter twenty-nine-b of this code,
identifying the brand and brand styles of all the cigarettes, the
quantity of each brand style of such cigarettes, the supplier of
the cigarettes, and the person or person, if any, to whom the
cigarettes have been conveyed for resale; and a separate
statement signed by the individual under penalty of perjury,
which shall not be treated as confidential or exempt from
disclosure, separately identifying the brands and brand styles of
the cigarettes; and
(4) A statement, signed by an officer of the manufacturer or
importer under penalty of perjury, certifying that the
manufacturer or importer has complied with:
(A) The package health warning and ingredient reporting
requirements of the Federal Cigarette Labeling and Advertising
Act, 15 U.S.C. 1333 and 1335a, with respect to the cigarettes;
and
(B) The provisions of article nine-d, chapter sixteen of
this code, including a statement indicating whether the
manufacturer is, or is not, a participating tobacco manufacturer
within the meaning of that statute.
§60-9-4. Criminal penalties.
Any person that commits any of the acts prohibited by
section two of this article, either knowing or having reason to
know he or she is doing so, or that fails to comply with any of
the requirements of section three of this article, is guilty of
a felony and, upon conviction thereof, shall be fined not more
than five thousand dollars, or imprisoned in a state correctional
facility not more than five years, or both fined and imprisoned.
§60-9-5. Administrative sanctions.
(a) The state tax commissioner may revoke or suspend the
authorization to affix the tax stamp of any person for a
violation of this article or any legislative rule related to this
article that is promulgated by the commissioner pursuant to chapter twenty-nine-a of this code and, in conjunction, the
alcohol beverage control commissioner may impose on the person a
civil penalty in an amount not to exceed the greater of five
hundred percent of the retail value of the cigarettes involved or
five thousand dollars, upon a finding a violation by such person
of this enactment, or the rules promulgated by the commissioner.
(b) Cigarettes that are acquired, held, owned, possessed,
transported in, imported into or sold or distributed in this
state in violation of this article are considered contraband
under article seventeen, chapter eleven of this code and are
subject to seizure and forfeiture as provided therein. Such
cigarettes are considered contraband whether the violation of
this article is knowing or otherwise.
(c) The state tax commissioner may assess tax due, penalty,
and interest on any product acquired, possessed, sold, or offered
for sale in violation of this article.
(d) Any monetary penalty assessed and collected by the
alcohol beverage control commissioner shall be transmitted to the
state treasurer for deposit into the state treasury to the credit
of "the alcohol beverage control enforcement fund," established
pursuant to section thirteen, article seven, chapter sixty of this code. All moneys collected, received and deposited in the
"alcohol beverage control enforcement fund" shall be kept and
maintained for expenditures by the commissioner for the purpose
of enforcement of this article and rules pertaining to cigarettes
and shall not be treated by the state treasurer or state auditor
as any part of the general revenue of the state.
(e) Any person aggrieved by the imposition of a civil
penalty pursuant to this article may request a hearing, within
ten days of receipt of the notice imposing penalties, before the
alcohol beverage control commissioner in the manner set forth
herein. The commissioner may not hold a hearing or impose any
civil penalties until after at least ten days' notice to the
person of the time and place of such hearing, which notice shall
contain a statement or specification of the charges, grounds or
reasons for such penalty, and which shall be served upon the
person as notices under the West Virginia rules of civil
procedure or by certified mail, return receipt requested; at
which time and place, so designated in the notice, the person has
the right to appear and produce evidence in his or her behalf,
and to be represented by counsel.
The commissioner may summon witnesses in the hearing before him or her, and fees of witnesses summoned on behalf of the state
in proceedings shall be treated as a part of the expenses of
administration and enforcement. The fees shall be the same as
those in similar hearings in the circuit courts of this state.
The commissioner may, upon a finding of violation, assess a sum,
not to exceed two hundred dollars per violation, to reimburse the
commissioner for expenditures of witness fees, court reporter
fees and travel costs incurred in holding the hearing. Any
moneys so assessed shall be transferred to the alcohol beverage
control enforcement fund.
The action of the commissioner imposing a civil penalty is
subject to review by the circuit court of Kanawha County, West
Virginia, in the manner provided in chapter twenty-nine-a of this
code. Petition for such review must be filed with the circuit
court within a period of thirty days from and after the date
final imposition of the civil penalty following hearing, if any,
and any person obtaining an order for such review shall be
required to pay the costs and fees incident to transcribing,
certifying and transmitting the records pertaining to such matter
to the circuit court. An application to the supreme court of
appeals of West Virginia for a writ of error from any final order of the circuit court in any matter shall be made within thirty
days from and after the entry of the final order. All hearings
before the commissioner shall be held in the offices of the
commissioner in Charleston, Kanawha County, West Virginia, unless
otherwise provided in the notice, or agreed upon between the
person and the commissioner; and when the hearing is held
elsewhere than in the commissioner's office, the person may be
required to make deposits of the estimated costs of such hearing.
§60-9-6. Unfair trade practices.
A violation of section two or section three of this article
constitutes an unlawful trade practice as provided in article
eleven-a, chapter forty-seven of this code and, in addition to
any remedies or penalties set forth in this article, is subject
to any remedies or penalties for a violation of that article.
The alcohol beverage control commissioner shall enforce each
and every provision of the unfair trade practices act set forth
in article eleven-a, chapter forty-seven of this code with
respect to packages of cigarettes with like effect as if said
article were set forth in extenso herein.
§60-9-7. Unfair cigarette sales.
For purposes of this article, cigarettes imported or reimported into the United States for sale or distribution under
any trade name, trade dress, or trademark that is the same as, or
is confusingly similar to, any trade name, trade dress, or
trademark used for cigarettes manufactured in the United States
for sale or distribution in the United States shall be presumed
to have been purchased outside of the ordinary channels of trade.
§60-9-8. General enforcement provisions.
(a) This article shall be enforced by the state tax
commissioner and the alcohol beverage control commissioner and
for the purpose of enforcing this article, the commissioners may
request information from any state agency, constitutional officer
or local agency and, notwithstanding the provisions of section
five-d, article ten, chapter eleven of this code or any other
provision of this code, may share information with, and request
information from, any federal agency and any agency or
constitutional officer of this or any other state or any local
agency thereof.
(b) A person that acquires, holds, owns, possesses,
transports in or imports into this state cigarettes that are
subject to this article shall, with respect to the cigarettes,
maintain and keep all records required pursuant to article seventeen, chapter eleven of this code.
(c) In addition to any other remedy provided by law, any
person may bring an action for appropriate injunctive or other
equitable relief for a violation of this article; actual damages,
if any, sustained by reason of the violation; and, as determined
by the court, interest on the damages from the date of complaint,
taxable costs, and reasonable attorney's fees. If the trier of
fact finds that the violation is flagrant, it may increase
recovery to an amount not in excess of three times the actual
damages sustained by reason of the violation.
§60-9-9. Applicability.
This article does not apply to cigarettes allowed to be
imported or brought into the United States for personal use, and
cigarettes sold or intended to be sold as duty-free merchandise
by a duty-free sales enterprise in accordance with the provisions
of 19 U.S.C. 1555(b) and any implementing regulations:
Provided,
That this article does apply to any cigarettes that are brought
back into the customs territory for resale within the customs
territory. The penalties provided in this article are in
addition to any other penalties imposed under other law.
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