(REPRINTED WITH ADOPTED AMENDMENTS)

 

Senate Bill No. 527–Committee on Taxation

 

March 26, 2001

____________

 

Referred to Committee on Taxation

 

SUMMARY—Revises provisions governing contraband cigarettes, cigarette dealers and enforcement of statutes regarding cigarettes. (BDR 32‑1326)

 

FISCAL NOTE:  Effect on Local Government: No.

                             Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to cigarettes; exempting duty-free sales enterprises and persons importing cigarettes for personal use from provisions governing the licensing of cigarette dealers and the taxation of cigarettes; providing that cigarette revenue stamps must identify the dealer who affixed the stamps; requiring certain dealers to file certificates regarding cigarettes imported into the United States; expanding the scope of prohibited acts by cigarette dealers; revising the provisions governing the disposal of certain contraband cigarettes; providing for a private right of action for injunctive relief regarding certain violations of chapter 370 of NRS; providing a penalty; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

   Section 1. Chapter 370 of NRS is hereby amended by adding thereto a new section to read as follows:

   1.  Except as otherwise provided in subsection 2, a person may institute a civil action in a court of competent jurisdiction for appropriate injunctive relief if the person:

   (a) Sells, distributes or manufactures cigarettes; and

   (b) Sustains direct economic or commercial injury as a result of a violation of subsection 4 of NRS 370.240 or NRS 370.385.

   2.  Nothing in this section authorizes an action against this state, a political subdivision of this state, or an officer, employee or agency thereof.

1-1    Sec. 2. NRS 370.070 is hereby amended to read as follows:

1-2    370.070  The provisions of NRS 370.001 to 370.430, inclusive, do not

1-3  apply to [common] :

1-4    1.  Common carriers while engaged in interstate commerce which sell

1-5  or furnish cigarettes on their trains, buses or airplanes[.] ;

2-1    2.  A person entering this state with a quantity of cigarettes for

2-2  household or personal use which is exempt from federal import duty; and

2-3    3.  A duty-free sales enterprise as defined in 19 U.S.C. §

2-4  1555(b)(8)(D) that:

2-5    (a) Operates pursuant to the provisions of 19 U.S.C. § 1555(b); and

2-6    (b) To the extent it sells cigarettes, only sells cigarettes that are duty-

2-7  free merchandise as defined in 19 U.S.C. § 1555(b)(8)(E).

2-8    Sec. 3.  NRS 370.180 is hereby amended to read as follows:

2-9    370.180  1.  The department shall:

2-10    (a) Design [a suitable stamp or] suitable stamps for the purpose of this

2-11  chapter[.] which meet the requirements of this section; and

2-12    (b) From time to time, have as many revenue stamps printed as may be

2-13  required.

2-14    2.  Each stamp must be designed to permit the identification of the

2-15  dealer who affixed the stamp to a package or other container of

2-16  cigarettes. The dealer must be identified by a number or other mark on

2-17  the stamp. The department shall maintain, for not less than 3 years after

2-18  the date the stamp is provided to the dealer, a record of the information

2-19  necessary to identify the dealer by examining the stamp. Upon request,

2-20  the department shall provide to any person the information maintained

2-21  pursuant to this subsection.

2-22    3.  The use of a metered stamping machine approved by and registered

2-23  with the department shall be subject to such regulations as prescribed by

2-24  the department.

2-25    Sec. 4.  NRS 370.240 is hereby amended to read as follows:

2-26    370.240  1.  Each dealer authorized to purchase or affix cigarette

2-27  revenue stamps shall report to the department:

2-28    (a) The inventory of all cigarettes in his possession or control at the

2-29  close of business on the last day of each month.

2-30    (b) The total value of all cigarette revenue stamps affixed by him upon

2-31  cigarette packages sold in or shipped into the state by him during the

2-32  preceding month.

2-33    2.  The report must be made by the 25th day of the month following

2-34  shipments upon forms to be provided by the department.

2-35    3.  The dealer may be allowed 5 additional days to file his report, if he

2-36  makes prior written application to the department and the department finds

2-37  good cause for extension.

2-38    4.  If, during the preceding month, the dealer affixed cigarette

2-39  revenue stamps upon cigarette packages imported into the United States,

2-40  he shall file with the report a copy of each certificate submitted pursuant

2-41  to 19 U.S.C. § 1681a(c) with regard to the cigarette packages.

2-42  Sec. 5. NRS 370.385 is hereby amended to read as follows:

2-43  370.385  1.  A wholesale or retail dealer shall not affix a Nevada

2-44  cigarette revenue stamp or a metered machine impression upon a package,

2-45  carton, packet or other container of cigarettes which:

2-46  (a) Does not meet the requirements of the Federal Cigarette Labeling

2-47  and Advertising Act, 15 U.S.C. §§ 1331 et seq., for the placement of labels,

2-48  warnings or any other information required by that Act to be placed upon a

2-49  container of cigarettes sold within the United States;

3-1    (b) Is labeled as “for export only,” “U.S. tax exempt,” “for use outside

3-2  the U.S.” or with similar wording indicating that the manufacturer did not

3-3  intend for the product to be sold in the United States;

3-4    (c) Has been altered by the unauthorized addition or removal of

3-5  wording, labels or warnings described in paragraph (a) or (b);

3-6    (d) Has been exported from the United States after January 1, 2000, and

3-7  imported into the United States in violation of 26 U.S.C. § 5754; [or]

3-8    (e) Has been imported into the United States in violation of 19 U.S.C.

3-9  § 1681a;

3-10  (f) Was manufactured, packaged or imported by a person who has not

3-11  complied with 15 U.S.C. § 1335a with regard to the cigarettes;

3-12  (g) Violates a federal trade-mark or copyright law [.] ; or

3-13  (h) Violates any other federal statute or regulation or with respect to

3-14  which any federal statute or regulation has been violated.

3-15  2.  A wholesale or retail dealer shall not:

3-16  (a) Affix Nevada cigarette revenue stamps or metered machine

3-17  impressions on;

3-18  (b) Sell or distribute in this state; or

3-19  (c) Possess in this state with the intent to sell or distribute in this

3-20  state,

3-21  cigarettes manufactured for export outside the United States.

3-22  3.  The department may impose a penalty on a wholesale or retail

3-23  dealer who violates subsection 1 or 2 as follows:

3-24  (a) For the first violation, a penalty of $5,000.

3-25  (b) For each subsequent violation, a penalty of $10,000.

3-26  4.  Notwithstanding any other provision of law, the department [may

3-27  seize, destroy or sell to the manufacturer, for export only, a container of]

3-28  shall seize and destroy cigarettes upon which a revenue stamp or metered

3-29  machine impression was placed in violation of subsection 1 or 2.

3-30  5.  As used in this section, “cigarettes manufactured for export outside

3-31  the United States” means cigarettes contained in a package or carton which

3-32  indicates that the cigarettes are tax exempt and for use outside the United

3-33  States.

3-34    Sec. 6. NRS 370.415 is hereby amended to read as follows:

3-35  370.415  1.  The department, its agents, sheriffs within their respective

3-36  counties and all other peace officers of the State of Nevada shall seize any

3-37  contraband cigarettes found or located in the State of Nevada.

3-38    2.  A sheriff or other peace officer who seizes cigarettes pursuant to

3-39  this section shall provide written notification of the seizure to the

3-40  department not later than 5 working days after the seizure. The

3-41  notification must include the reason for the seizure.

3-42    3.  After consultation with the department, the sheriff or other peace

3-43  officer shall transmit the cigarettes to the department if:

3-44    (a) The cigarettes, except for revenue stamps or metered machine

3-45  impressions being properly affixed as required by this chapter, comply

3-46  with all state and federal statutes and regulations; and

3-47    (b) The department approves the transmission of the cigarettes.

3-48    4.  Upon receipt of the cigarettes, the department shall dispose of the

3-49  cigarettes as provided in subsection 4 of NRS 370.270.

4-1    5.  If the sheriff or other peace officer does not transmit the cigarettes

4-2  to the department, he shall destroy the cigarettes.

4-3    Sec. 7.  The amendatory provisions of this act do not apply to offenses

4-4  committed before July 1, 2001.

4-5    Sec. 8.  This act becomes effective on July 1, 2001.

 

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