REPORT TITLE:
Cigarette Stamp Tax


DESCRIPTION:
Prohibits sale of export cigarettes and altering the packaging of
cigarettes.  Provides for seizure of illegally held cigarettes.
(HB2961 HD2)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2961
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO TOBACCO.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      Section 1.  Chapter 245, Hawaii Revised Statutes, is amended
 
 2 by adding a new part to be appropriately designated and to read
 
 3 as follows:
 
 4              PART  .   EXPORT AND FOREIGN CIGARETTES
 
 5      245-A Sale of export cigarettes prohibited.  It shall be
 
 6 unlawful for a person to sell or distribute in the State, or to
 
 7 acquire, hold, own, possess, or transport for sale or
 
 8 distribution in the State, or to import or cause to be imported
 
 9 into the State for sale or distribution in the State any of the
 
10 following:
 
11      (1)  Cigarettes the package of which bears any statement,
 
12           label, stamp, sticker, or notice indicating that the
 
13           manufacturer did not intend the cigarettes to be sold,
 
14           distributed, or used in the United States, including
 
15           but not limited to labels stating "for export only",
 
16           "U.S. tax-exempt", for "use outside U.S.", or similar
 
17           wording;
 
18      (2)  Cigarettes the package of which does not comply with
 
19           all requirements imposed by federal law regarding
 
20           warnings and other information on packages of
 

 
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 1           cigarettes manufactured, packaged, or imported for
 
 2           sale, distribution, or use in the United States,
 
 3           including but not limited to the specific warning
 
 4           labels specified in the Federal Cigarette Labeling and
 
 5           Advertising Act, 15 U.S.C. 1333;
 
 6      (3)  Cigarettes the package of which does not comply with
 
 7           all federal trademark and copyright laws;
 
 8      (4)  Cigarettes imported into the United States on or after
 
 9           January 1, 2000, in violation of 26 U.S.C. 5754 or any
 
10           other federal law or regulation;
 
11      (5)  Cigarettes that the person otherwise knows or has
 
12           reason to know the manufacturer did not intend to be
 
13           sold, distributed, or used in the United States; or
 
14      (6)  Cigarettes for which there has not been submitted to
 
15           the Secretary of the United States Department of Health
 
16           and Human Services the list of the ingredients added to
 
17           tobacco in the manufacture of such cigarettes required
 
18           by the Federal Cigarette Labeling and Advertising Act,
 
19           15 U.S.C. 1335a.
 
20      245-B Alteration of packaging prohibited.  It shall be
 
21 unlawful for any person to alter the package of any cigarettes,
 
22 prior to sale or distribution to remove, conceal, or obscure:
 
23      (1)  Any statement, label, stamp, sticker, or notice
 

 
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 1           indicating that the manufacturer did not intend the
 
 2           cigarettes to be sold, distributed, or used in the
 
 3           United States, including but not limited to labels
 
 4           stating "for export only", "U.S. tax-exempt", "for use
 
 5           outside U.S.", or similar wording; or
 
 6      (2)  Any health warning that is not specified in or does not
 
 7           conform with the requirements of the Federal Cigarette
 
 8           Labeling and Advertising Act, 15 U.S.C. 1333.
 
 9      245-C Affixing of cigarette tax stamps to export cigarettes
 
10 or altered packages prohibited.  It shall be unlawful for any
 
11 person to affix any cigarette tax stamp relating to exported
 
12 cigarettes required under this chapter to the package of any
 
13 cigarettes described in section 245-A or to any package altered
 
14 in violation of section 245-B.
 
15      245-D Documentation of foreign cigarettes.  On the first
 
16 business day of each month, each person licensed to affix any
 
17 cigarette tax stamp relating to exported cigarettes under this
 
18 chapter shall file with the department of taxation all of the
 
19 following for all cigarettes imported into the United States to
 
20 which such person has affixed a cigarette tax stamp in the
 
21 preceding month:
 
22      (1)  A copy of a permit issued pursuant to the Internal
 
23           Revenue Code, 26 U.S.C. 5713, to the person importing
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           such cigarettes into the United States permitting the
 
 2           person to import those cigarettes;
 
 3      (2)  A copy of the United States Customs Service form
 
 4           containing, with respect to such cigarettes, the
 
 5           internal revenue tax information required by the United
 
 6           States Bureau of Alcohol, Tobacco and Firearms;
 
 7      (3)  A statement, signed by the person under penalty of
 
 8           perjury, which shall be treated as confidential by the
 
 9           department of taxation, and which shall be exempt from
 
10           disclosure under chapter 92F, identifying the brand and
 
11           brand styles of all such cigarettes, the quantity of
 
12           each brand style of such cigarettes, the supplier of
 
13           the cigarettes and the person or persons, if any, to
 
14           whom the cigarettes have been conveyed for resale; and
 
15      (4)  A statement, signed under penalty of perjury by an
 
16           officer of the manufacturer or importer of such
 
17           cigarettes, certifying that the manufacturer or
 
18           importer has complied with:
 
19           (A)  The package health warning and ingredient
 
20                reporting requirements of the Federal Cigarette
 
21                Labeling and Advertising Act, 15 U.S.C. 1333 and
 
22                1335a, with respect to such cigarettes; and
 
23           (B)  Chapter 675, including a statement of whether the
 

 
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 1                manufacturer is or is not a participating
 
 2                manufacturer within the meaning of section 675-3.
 
 3      245-E  Illegal sale or export of foreign cigarettes;
 
 4 revocation or suspension of license; civil penalties.  The
 
 5 director of taxation may revoke or suspend the license of a
 
 6 wholesaler or dealer under this chapter of any licensee pursuant
 
 7 to rules adopted under chapter 91, and impose on the licensee a
 
 8 civil penalty in an amount not to exceed the greater of five
 
 9 times the retail value of the cigarettes involved or $5,000, upon
 
10 finding a violation by such licensee of this part or any
 
11 implementing rule prescribed by the director.
 
12      245-F Criminal penalties for illegal sale or export of
 
13 foreign cigarettes.  Any person who knowingly violates section
 
14 245-A, 245-B or 245-C shall be guilty of a class C felony, and
 
15 upon conviction thereof, shall be fined not more than $10,000,
 
16 and may be imprisoned not less than one year and not more than
 
17 five years, or both; provided that a corporation shall be fined
 
18 not more than $50,000.
 
19      245-G Confiscation and seizure of illegal sale or export
 
20 of foreign cigarettes.  The attorney general and the police
 
21 departments of each of the counties may seize and confiscate any
 
22 cigarette, package of cigarettes, or carton of cigarettes which
 
23 is possessed, kept, stored, or retained for the purpose of sale,
 

 
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 1 or sold or offered for sale in violation of this part.
 
 2      245-H Forfeiture.  The forfeiture of any cigarette,
 
 3 package of cigarettes, or carton of cigarettes unlawfully
 
 4 possessed, or kept, stored, or retained for the purpose of sale,
 
 5 or sold or offered for sale, in violation of this part, may be
 
 6 enforced pursuant to chapter 712A by an appropriate
 
 7 administrative or judicial proceeding.  Any cigarette, package of
 
 8 cigarettes, or carton of cigarettes forfeited as provided in this
 
 9 section shall be ordered destroyed.
 
10      245-I  Unfair trade practices.  Any violation of this part
 
11 shall constitute an unfair method of competition and unfair and
 
12 deceptive acts or practices in the conduct of any trade of
 
13 commerce under section 480-2 and shall be subject to a civil
 
14 penalty as provided in section 480-3.1.  Each package of
 
15 cigarettes sold in violation of this part shall constitute a
 
16 separate violation.
 
17      245-J  Deceptive cigarette sales.  The importation or
 
18 reimportation of cigarettes into the United States for sale or
 
19 distribution under any trade name, trade dress, or trademark that
 
20 is the same as, or is confusingly similar to, any trade name,
 
21 trade dress, or trademark used for cigarettes manufactured in the
 
22 United States for sale or distribution in the United States shall
 
23 be deemed to violate section 481A-3.
 

 
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 1      245-K  Enforcement.(a)  Enforcement of this part shall be
 
 2 under the concurrent jurisdiction of the attorney general, the
 
 3 prosecuting attorneys or deputy prosecuting attorneys of the
 
 4 various counties, and the police departments of the various
 
 5 counties.
 
 6      (b)  In addition to any other remedy provided by law,
 
 7 including enforcement as provided in subsection (a), any person
 
 8 may bring an action for appropriate injunctive or other equitable
 
 9 relief for a violation of this part and for damages sustained by
 
10 the person, and, if the judgment is for the plaintiff, the
 
11 plaintiff shall be awarded a sum not less than $1,000 or
 
12 threefold damages by the plaintiff sustained, whichever sum is
 
13 the greater, and reasonable attorneys fees together with the
 
14 costs of suit.
 
15      245-L  Applicability.  This part shall not apply to:
 
16      (1)  Cigarettes allowed to be imported or brought into the
 
17           United States for personal use free of federal tax or
 
18           duty or voluntarily abandoned to the U.S. Secretary of
 
19           Treasury at the time of entry; or
 
20      (2)  Cigarettes sold or intended to be sold as duty-free
 
21           merchandise by a duty-free sales enterprise in
 
22           accordance with the provisions of 19 U.S.C. 1555(b) and
 
23           any implementing regulations; provided, however, that
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           this part shall apply to any such cigarettes that are
 
 2           brought back into the customs territory for resale
 
 3           within the customs territory.
 
 4      245-M  Penalties cumulative.  The penalties provided in
 
 5 this part are in addition to any other penalties imposed under
 
 6 other law."
 
 7      SECTION 2.  In codifying the new parts added to chapter 245,
 
 8 Hawaii Revised Statutes, the revisor of statutes shall substitute
 
 9 appropriate section numbers for the letters used in designating
 
10 the new sections in this Act.
 
11      SECTION 3.  This Act shall take effect on           .