House Bill 1941

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    Florida House of Representatives - 2000                HB 1941

        By Representative Albright






  1                      A bill to be entitled

  2         An act relating to tax on tobacco products;

  3         amending s. 210.01, F.S.; defining the terms

  4         "importer" and "primary source of supply";

  5         amending s. 210.05, F.S.; providing

  6         requirements with respect to stamps prescribed

  7         by the Division of Alcoholic Beverages and

  8         Tobacco; creating s. 210.155, F.S.; requiring

  9         registration of entities acting as a primary

10         source of supply; prohibiting wholesale dealers

11         from shipping or accepting delivery of

12         cigarettes from outside the state other than

13         directly from a primary source of supply;

14         providing requirements with respect to affixing

15         any stamp or other cover to a cigarette

16         package; providing for seizure and forfeiture

17         of cigarettes in violation and for revocation

18         of a wholesale dealer's permit; amending s.

19         210.15, F.S.; revising application requirements

20         for permits for distributing agents, wholesale

21         dealers, and exporters, and provisions relating

22         to renewal thereof; requiring submission of

23         manufacturers' affirmation forms by

24         distributing agents and wholesale dealers;

25         amending ss. 210.151 and 210.405, F.S.,

26         relating to temporary initial cigarette and

27         other tobacco products permits; conforming

28         language; revising provisions relating to

29         expiration of such permits; specifying that

30         manufacturers' affirmation forms must be

31         submitted prior to issuance of a temporary

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  1         cigarette permit; amending s. 210.16, F.S.;

  2         providing for revocation and suspension of

  3         registration of a primary source of supply;

  4         providing limitations on renewal of

  5         registration subsequent to revocation;

  6         providing for civil penalties in lieu of

  7         revocation or suspension; increasing the civil

  8         penalty that may be imposed on a wholesale

  9         dealer in lieu of suspension or revocation of a

10         permit; amending s. 210.19, F.S.; directing the

11         division to keep certain records; providing

12         severability; providing an effective date.

13

14  Be It Enacted by the Legislature of the State of Florida:

15

16         Section 1.  Subsections (19) and (20) are added to

17  section 210.01, Florida Statutes, to read:

18         210.01  Definitions.--When used in this part the

19  following words shall have the meaning herein indicated:

20         (19)  "Importer" means importer as that term is defined

21  in 26 U.S.C. s. 5702(1).

22         (20)  "Primary source of supply" means:

23         (a)  In the case of cigarettes manufactured in the

24  United States, the manufacturer of the cigarettes.

25         (b)  In the case of cigarettes not manufactured in the

26  United States:

27         1.  The manufacturer of the cigarettes; or

28         2.  Any other person that imports such cigarettes into

29  the United States.

30

31

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  1  Cigarettes are "manufactured in the United States" for

  2  purposes of this definition if they are manufactured in any

  3  state, the District of Columbia, the Commonwealth of Puerto

  4  Rico, or any other territory or possession of the United

  5  States, or on any Indian lands located within the geographical

  6  boundaries of the United States.

  7         Section 2.  Subsection (2) of section 210.05, Florida

  8  Statutes, is amended to read:

  9         210.05  Preparation and sale of stamps; discount.--

10         (2)  The division shall prescribe, prepare, and furnish

11  stamps of such denominations and quantities as may be

12  necessary for the payment of the tax imposed by this part, and

13  may from time to time and as often as it deems advisable

14  provide for the issuance and exclusive use of stamps of a new

15  design and forbid the use of stamps of any other design.

16  However, all stamps prescribed by the division must be

17  designed and furnished in a fashion that permits

18  identification of the agent or wholesale dealer that affixed

19  the stamp to the particular package of cigarettes by means of

20  a serial number or other mark on the stamp. The division shall

21  make provisions for the sale of such stamps at such places and

22  at such time as it may deem necessary.

23         Section 3.  Section 210.155, Florida Statutes, is

24  created to read:

25         210.155  Primary source of supply; tax control

26  registration; prohibitions; reports by agents and wholesale

27  dealers; enforcement.--

28         (1)  PRIMARY SOURCE OF SUPPLY; TAX CONTROL

29  REGISTRATION.--

30         (a)  For purposes of revenue control, beginning on the

31  effective date of this section, no person shall sell, offer

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  1  for sale, or accept orders for sale, to any person in this

  2  state, or ship, or cause to be shipped, into this state, for

  3  sale to any person in this state, any cigarettes, unless such

  4  person:

  5         1.  Is a primary source of supply; or

  6         2.  Has acquired such cigarettes directly from a

  7  primary source of supply; provided, that no primary source of

  8  supply shall sell, offer for sale, or accept orders for sale,

  9  to any person in this state, or ship, or cause to be shipped,

10  into this state, for sale to any person in this state, any

11  cigarettes, without first having registered as the primary

12  source of supply of such cigarettes on forms provided by, and

13  on such a date and in such manner as prescribed by, the

14  division.

15         (b)  Each primary source of supply registering under

16  this section shall, on the form provided by the division:

17         1.  List all cigarettes by brand style that the primary

18  source of supply sells, offers for sale, or for which the

19  primary source of supply accepts orders for sale, to any

20  person in this state, or ships, or causes to be shipped, into

21  this state for sale to any person in this state.

22         2.  Identify the manufacturer of such cigarettes and

23  the place where such cigarettes were manufactured.

24

25  Each primary source of supply shall file with the division

26  monthly updates of this information, together with a monthly

27  report of all shipments into the state, on forms provided by,

28  and on such date and in such manner as prescribed by, the

29  division.

30         (c)  Each primary source of supply shall supply such

31  documentation supporting its application for registration and

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  1  monthly reports as the division may require. The division may

  2  deny, suspend, or revoke the registration of any primary

  3  source of supply for failure to provide the required

  4  information or documentation sufficient to support the

  5  application of the primary source of supply for registration

  6  or one or more monthly reports.

  7         (2)  PROHIBITIONS.--No person shall:

  8         (a)  Sell or distribute in this state; acquire, hold

  9  own, possess, or transport, for sale or distribution in this

10  state; or import, or cause to imported, into this state for

11  sale or distribution in this state:

12         1.  Any cigarettes the package of which:

13         a.  Bears any statement, label, stamp, sticker, or

14  notice indicating that the manufacturer did not intend the

15  cigarettes to be sold, distributed, or used in the United

16  States, including, but not limited to, labels stating "For

17  export only," "U.S. tax-exempt," "For use outside U.S.," or

18  similar wording; or

19         b.  Does not comply with:

20         (I)  All requirements imposed by or pursuant to federal

21  law regarding warnings or other information on packages of

22  cigarettes manufactured, packaged, or imported for sale,

23  distribution, or use in the United States, including, but not

24  limited to, the precise warning labels specified in the

25  federal Cigarette Labeling and Advertising Act, 15 U.S.C. s.

26  1333.

27         (II)  All federal trademark and copyright laws;

28         2.  Any cigarettes imported into the United States in

29  violation of 26 U.S.C. s. 5754 or any other federal law, or

30  implementing federal regulations;

31

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  1         3.  Any cigarettes that such person otherwise knows or

  2  has reason to know the manufacturer did not intend to be sold,

  3  distributed, or used in the United States; or

  4         4.  Any cigarettes for which there has not been

  5  submitted to the Secretary of the United States Department of

  6  Health and Human Services the list of the ingredients added to

  7  tobacco in the manufacture of such cigarettes required by the

  8  federal Cigarette Labeling and Advertising Act, 15 U.S.C. s.

  9  1335(a);

10         (b)  Alter the package of any cigarettes, prior to

11  distribution to the ultimate consumer, so as to remove,

12  conceal, or obscure:

13         1.  Any statement, label, stamp, sticker, or notice

14  described in (2)a.1.; or

15         2.  Any health warning that is not specified in, or

16  does not conform with the requirements of, the federal

17  Cigarette Labeling and Advertising Act, 15 U.S.C. s. 1333; or

18         (c)  Affix any stamp required pursuant to this part to

19  the package of any cigarettes described in paragraph (a) or

20  altered in violation of paragraph (b).

21         (3)  REPORTS BY AGENTS AND WHOLESALE DEALERS.--Each

22  agent and wholesale dealer shall file monthly with the

23  division, in accordance with s. 210.09, for all cigarettes

24  imported into the United States to which an agent or

25  wholesaler dealer has affixed a stamp pursuant to this chapter

26  in the preceding month:

27         (a)  A copy of:

28         1.  The permit issued pursuant to the Internal Revenue

29  Code, 26 U.S.C. s. 5713, to the person importing such

30  cigarettes into the United States allowing such person to

31  import such cigarettes.

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  1         2.  The customs form containing, with respect to such

  2  cigarettes, the internal revenue tax information required by

  3  the Federal Bureau of Alcohol, Tobacco and Firearms.

  4         (b)  A statement, signed by such person under penalty

  5  of perjury, which shall be treated as confidential by the

  6  commissioner and exempt from disclosure under chapter 119,

  7  identifying the brand and brand styles of all such cigarettes,

  8  the quantity of each brand style of such cigarettes, the

  9  supplier of such cigarettes, and the person or persons, if

10  any, to whom the cigarettes have been conveyed for resale, and

11  a separate statement, signed by such individual under penalty

12  of perjury, which shall not be treated as confidential or

13  exempt from disclosure, separately identifying the brands and

14  brand styles of such cigarettes.

15         (c)  A statement, signed by an officer of the

16  manufacturer or importer under penalty of perjury, certifying

17  that the manufacturer or importer has complied with the

18  package health warning and ingredient reporting requirements

19  of the federal Cigarette Labeling and Advertising Act, 15

20  U.S.C. s. 1333 and 1335(a), with respect to such cigarettes.

21         (4)  CRIMINAL PENALTIES.--Any person that commits any

22  of the acts prohibited by subsection (1) or subsection (2),

23  either knowing or having reason to know he or she is doing so,

24  or that fails to comply with any of the requirements of

25  subsection (1) or subsection (3), commits a felony of the

26  third degree, punishable by a fine of not more than $5,000 or

27  imprisonment of not more than 5 years, or both.

28         (5)  ADMINISTRATIVE SANCTIONS.--

29         (a)  Upon finding a violation of this section by the

30  holder of any permit issued under this part or chapter 569, or

31

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  1  any implementing rule promulgated by the division, the

  2  division may:

  3         1.  Revoke or suspend the permit or permits issued to

  4  such permittee pursuant to the procedures set forth in this

  5  part or chapter 569, as applicable; and

  6         2.  Impose on the holder of such a permit a civil

  7  penalty in an amount not to exceed the greater of 500 percent

  8  of the retail value of the cigarettes involved or $5,000.

  9         (b)  Cigarettes that are acquired, held, owned,

10  possessed, transported in, imported into, or sold or

11  distributed in this state in violation of this section shall

12  be deemed contraband under s. 210.12 and shall be seized by

13  the division subject to forfeiture as provided therein, and

14  all such cigarettes so seized and forfeited shall be

15  destroyed. Such cigarettes shall be deemed contraband whether

16  the violation of this section is knowing or otherwise.

17         (6)  UNFAIR TRADE PRACTICES.--A violation of this

18  section shall constitute an unlawful trade practice as

19  provided in s. 501.204(1) and, in addition to any remedies or

20  penalties available set forth in this section, shall be

21  subject to any remedies or penalties available for a violation

22  of that section.

23         (7)  GENERAL PROVISIONS.--

24         (a)  This section shall be enforced by the division;

25  provided, that at the request of the division or the

26  division's duly authorized agent, the state police and all

27  local police authorities shall enforce the provisions of this

28  section. The Attorney General has concurrent power with the

29  prosecuting attorneys of the state to enforce this section.

30         (b)  For the purpose of enforcing this section, the

31  division and any agency to which the division shall have

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  1  delegated enforcement responsibility pursuant to paragraph (a)

  2  may request information from any state or local agency, and

  3  may share information with or request information from, any

  4  federal agency and any agency of any other state or any local

  5  agency thereof.

  6         (c)  In addition to any other remedy provided by law,

  7  including enforcement as provided in paragraph (a), any person

  8  may bring an action for appropriate injunctive or other

  9  equitable relief for a violation of this section; actual

10  damages, if any, sustained by reason of the violation; and, as

11  determined by the court, interest on the damages from the date

12  of the complaint, taxable costs, and reasonable attorney's

13  fees. If the trier of fact finds that the violation is

14  egregious, it may increase recovery to an amount not in excess

15  of three times the actual damages sustained by reason of the

16  violation.

17         (8)  APPLICABILITY.--

18         (a)  This section does not apply to:

19         1.  Cigarettes allowed to be imported or brought into

20  the United States for personal use; and

21         2.  Cigarettes sold or intended to be sold as duty-free

22  merchandise by a duty-free sales enterprise in accordance with

23  the provisions of 19 U.S.C. s. 1555(b) and any implementing

24  regulations, provided, however that this section shall apply

25  to any such cigarettes that are brought back into the customs

26  territory for resale within the customs territory.

27         (b)  The penalties provided in this section are in

28  addition to any other penalties imposed under other law.

29         Section 4.  Paragraphs (a), (b), (e), and (f) of

30  subsection (1) and subsections (3) and (4) of section 210.15,

31  Florida Statutes, are amended to read:

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  1         210.15  Permits.--

  2         (1)(a)  Every person, firm, or corporation desiring to

  3  deal in cigarettes as a distributing agent, wholesale dealer,

  4  or exporter within this state shall file an application for a

  5  cigarette permit for each place of business with the Division

  6  of Alcoholic Beverages and Tobacco.  Every application for a

  7  cigarette permit shall be made on forms furnished by the

  8  division and shall set forth the name under which the

  9  applicant transacts or intends to transact business, the

10  location of the applicant's place of business within the

11  state, and such other information as the division may require.

12  If the applicant has or intends to have more than one place of

13  business dealing in cigarettes within this state, the

14  application shall state the location of each place of

15  business.  If the applicant is an association, the application

16  shall set forth the names and addresses of the persons

17  constituting the association, and if a corporation, the names

18  and addresses of the principal officers thereof and any other

19  information prescribed by the division for the purpose of

20  identification.  The application shall be signed and verified

21  by oath or affirmation by the owner, if a natural person, and

22  in the case of an association or partnership, any partner

23  members or partners thereof, and in the case of a corporation,

24  by an executive officer thereof or by any person specifically

25  authorized by the corporation to sign the application, to

26  which shall be attached the written evidence of this

27  authority.  The cigarette permit for a distributing agent

28  shall be issued annually for which an annual fee of $5 shall

29  be charged.  No permit for a distributing agent or wholesale

30  dealer shall be issued prior to receipt of an affirmation, on

31  a form approved by the division, from each primary source of

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  1  supply registered with the division under s. 210.155 whose

  2  cigarettes the distributing agent or wholesale dealer intends

  3  to stamp or distribute. Such affirmation shall evidence the

  4  intent of the primary source of supply to provide such

  5  cigarettes to the applicant and shall be signed and sworn by

  6  an officer of the corporation, in the case of a primary source

  7  of supply that is a corporation, or a principal of the

  8  partnership or a sole proprietorship, in the case of a primary

  9  source of supply that is a partnership or a sole

10  proprietorship.

11         (b)  The holder of any duly issued, annual permit for a

12  distributing agent shall be entitled to a renewal of his or

13  her annual permit from year to year as a matter of course, on

14  or before July 1 unless otherwise established by rule, upon

15  making application to the division, and upon payment of this

16  annual permit fee, and receipt by the division of newly

17  executed affirmation forms as required by paragraph (a).

18         (e)  Prior to an application for a distributing agent,

19  wholesale dealer, or exporter permit being approved, the

20  applicant shall file a set of fingerprints when required by

21  the division on forms provided by the division. The applicant

22  shall also file a set of fingerprints for any person or

23  persons interested directly or indirectly with the applicant

24  in the business for which the permit is being sought, when so

25  required by the division.  If the applicant or any person

26  interested with the applicant, either directly or indirectly,

27  in the business for which the permit is sought shall be such a

28  person as is within the definition of persons to whom a

29  distributing agent, wholesale dealer, or exporter permit shall

30  be denied, then the application may be denied by the division.

31  If the applicant is a partnership, all members of the

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  1  partnership are required to file said fingerprints, or if a

  2  corporation, all principal officers of the corporation are

  3  required to file said fingerprints, when required by the

  4  division.  The cigarette permit for a wholesale dealer or

  5  exporter shall be originally issued at a fee of $100, which

  6  sum is to cover the cost of the investigation required before

  7  issuing such permit.

  8         (f)  The cigarette permit for a wholesale dealer or

  9  exporter shall be renewed from year to year as a matter of

10  course, at an annual cost of $100, on or before July 1, unless

11  otherwise established by rule, upon making application to the

12  division, and upon payment of the annual renewal fee, and

13  receipt by the division of newly executed affirmation forms as

14  required by paragraph (a).

15         (3)  Upon approval of the application, the division

16  shall grant and issue to each applicant a cigarette permit for

17  each place of business set forth in the application.

18  Cigarette permits shall not be assignable and shall be valid

19  only for the persons in whose names issued and for the

20  transaction of business at the places designated therein and

21  shall at all times be conspicuously displayed at the places

22  for which issued.

23         (4)  All permits of distributing agents, wholesale

24  dealers, or exporters shall remain in force and effect until

25  July 1 following their issuance, unless otherwise established

26  by rule, or until suspended or revoked for cause by the

27  division, or surrendered by the permitholder.

28         Section 5.  Section 210.151, Florida Statutes, is

29  amended to read:

30         210.151  Initial temporary cigarette and other tobacco

31  products permits.--When a person has filed a completed

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  1  application which does not on its face disclose any reason for

  2  denying a cigarette permit under s. 210.15, or other tobacco

  3  products permit under s. 210.40, the Division of Alcoholic

  4  Beverages and Tobacco of the Department of Business and

  5  Professional Regulation shall issue a temporary initial permit

  6  of the same type and series for which the application has been

  7  submitted, which is valid for all purposes under this part

  8  chapter. The application for a temporary cigarette permit must

  9  be accompanied by the affirmation forms required by s.

10  210.15(1)(a) prior to issuance of a temporary permit.

11         (1)  A temporary initial permit shall be valid for up

12  to 90 days and may be extended by the division for up to an

13  additional 90 days for good cause. The division may at any

14  time during such period grant or deny the permit applied for,

15  notwithstanding s. 120.60.

16         (1)(2)  A temporary initial permit expires on and may

17  not be continued or extended beyond the date the division

18  denies the permit applied for; or beyond 14 days after the

19  date the division approves the permit applied for; or beyond

20  the date the applicant pays the permit fee and the division

21  issues the permit applied for; or beyond the date the

22  temporary permit otherwise expires by law, whichever date

23  occurs first.

24         (2)(3)  Each applicant seeking a temporary initial

25  cigarette permit shall pay to the division for such permit a

26  fee of $100. Each applicant seeking a temporary initial permit

27  for other tobacco products shall pay to the division for such

28  permit a fee of $25.

29         (3)(4)  Any fee or penalty collected under the

30  provisions of this act shall be deposited into the Alcoholic

31  Beverage and Tobacco Trust Fund.

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  1         Section 6.  Section 210.19, Florida Statutes, is

  2  amended to read:

  3         210.19  Records to be kept by division.--The division

  4  shall keep records showing the total amount of taxes

  5  collected, which records shall be open to the public during

  6  the regular office hours of the division. The division shall

  7  maintain records that identify which agent or wholesale dealer

  8  affixed the tax stamp to each package of cigarettes. The

  9  identifying records must be made available for public

10  inspection and retained for at least 3 years.

11         Section 7.  Section 210.405, Florida Statutes, is

12  amended to read:

13         210.405  Initial temporary cigarette and other tobacco

14  products permits.--When a person has filed a completed

15  application which does not on its face disclose any reason for

16  denying a cigarette permit under s. 210.15, or other tobacco

17  products permit under s. 210.40, the Division of Alcoholic

18  Beverages and Tobacco of the Department of Business and

19  Professional Regulation shall issue a temporary initial permit

20  of the same type and series for which the application has been

21  submitted, which is valid for all purposes under this chapter.

22         (1)  A temporary initial permit shall be valid for up

23  to 90 days and may be extended by the division for up to an

24  additional 90 days for good cause. The division may at any

25  time during such period grant or deny the permit applied for,

26  notwithstanding s. 120.60.

27         (1)(2)  A temporary initial permit expires on and may

28  not be continued or extended beyond the date the division

29  denies the permit applied for; or beyond 14 days after the

30  date the division approves the permit applied for; or beyond

31  the date the applicant pays the permit fee and the division

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  1  issues the permit applied for; or beyond the date the

  2  temporary permit otherwise expires by law, whichever date

  3  occurs first.

  4         (2)(3)  Each applicant seeking a temporary initial

  5  cigarette permit shall pay to the division for such permit a

  6  fee of $100. Each applicant seeking a temporary initial permit

  7  for other tobacco products shall pay to the division for such

  8  permit a fee of $25.

  9         (3)(4)  Any fee or penalty collected under the

10  provisions of this act shall be deposited into the Alcoholic

11  Beverage and Tobacco Trust Fund.

12         Section 8.  Section 210.16, Florida Statutes, is

13  amended to read:

14         210.16  Revocation or suspension of permit or

15  registration.--

16         (1)  The Division of Alcoholic Beverages and Tobacco is

17  given full power and authority to revoke the permit of any

18  wholesale dealer receiving a permit to engage in business

19  under this part or the registration of any primary source of

20  supply for violation of any of the provisions of this part.

21         (2)  The division may suspend for a reasonable period

22  of time, in its discretion, the permit permits of any

23  wholesale dealer dealers issued under the provisions of this

24  part or the registration of any primary source of supply for

25  the same causes and under the same limitations as is

26  authorized hereunder to revoke the permit permits of such

27  wholesale dealer or the registration of such primary source of

28  supply dealers.

29         (3)  No wholesale dealer whose permit for any place of

30  business has been revoked shall engage in business under this

31  part at such place of business after such revocation until a

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  1  new permit is issued.  No wholesale dealer whose permit for

  2  any place of business has been revoked shall be permitted to

  3  have said permit renewed, or to obtain an additional cigarette

  4  permit for any other place of business, for a period of 6

  5  months after the date such revocation becomes final. No

  6  primary source of supply whose registration has been revoked

  7  shall be permitted to have said registration renewed for a

  8  period of 6 months after the date such revocation becomes

  9  final.

10         (4)  In lieu of the suspension or revocation of permits

11  or registrations, the division may impose civil penalties

12  against holders of permits or registrations for violations of

13  this part or rules and regulations relating thereto.  No civil

14  penalty so imposed shall exceed $100,000 $1,000 for each

15  offense, and all amounts collected shall be deposited with the

16  State Treasurer to the credit of the General Revenue Fund.  If

17  the holder of the permit or registration fails to pay the

18  civil penalty, his or her permit or registration shall be

19  suspended for such period of time as the division may specify.

20         Section 9.  If any provision of this act or the

21  application thereof to any person or circumstance is held

22  invalid, the invalidity does not affect other provisions or

23  applications of the act which can be given effect without the

24  invalid provision or application, and to this end the

25  provisions of this act are declared severable.

26         Section 10.  This act shall take effect upon becoming a

27  law.

28

29

30

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    Florida House of Representatives - 2000                HB 1941

    66-233A-00






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  2                          HOUSE SUMMARY

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      Requires entities that are the primary source of supply
  4    of cigarettes for wholesale dealers to register with the
      Division of Alcoholic Beverages and Tobacco. Provides
  5    that wholesale dealers may not ship or accept delivery of
      cigarettes from another state or foreign country except
  6    directly from a primary source of supply. Prohibits
      affixing any stamp or other cover to a package of
  7    cigarettes that does not comply with federal labeling
      requirements, or affixing any tax stamp to a package that
  8    is identified as intended for use outside the United
      States or exempt from federal tax. Provides for
  9    forfeiture of cigarettes in violation and for revocation
      of the wholesale dealer's permit. Provides that a primary
10    source of supply's registration may be revoked or
      suspended in the same manner as a wholesale dealer's
11    permit, and increases the civil penalty that may be
      imposed on a wholesale dealer in lieu of permit
12    suspension or revocation.

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      Revises application requirements for permits for
14    cigarette distributing agents, wholesale dealers, and
      exporters and provisions relating to renewal thereof.
15    Requires distributing agents and wholesale dealers to
      submit manufacturers' affirmation forms prior to
16    receiving a permit. Revises provisions relating to
      expiration of temporary initial cigarette and other
17    tobacco products permits.

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