Senate Bill No. 66–Committee on Judiciary

 

February 7, 2003

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Revises provisions governing certain agreements relating to sale of cigarettes. (BDR 32‑186)

 

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; authorizing a retail dealer to contract or agree with a supplier to participate in any merchandising, advertising, display or other promotional program of the supplier; prohibiting such a contract or agreement from limiting the use of the cigarette category space of the retail dealer or restricting certain other activities engaged in by the retail dealer as a condition for participating in such a program; 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:

 

1-1  Section 1. Chapter 370 of NRS is hereby amended by adding

1-2  thereto a new section to read as follows:

1-3  1.  Except as otherwise provided in this section, a retail dealer

1-4  may contract or enter into any other agreement with a supplier to:

1-5  (a) Obtain, participate in or receive payments from the

1-6  supplier in accordance with any merchandising, advertising,

1-7  display or promotional program of the supplier relating to the sale

1-8  of cigarettes;

1-9  (b) Receive compensation from the supplier for providing

1-10  space to advertise, display or promote any product of the supplier;

1-11  or

1-12      (c) Purchase cigarettes from the supplier.

2-1  2.  A contract or agreement specified in subsection 1 must

2-2  not:

2-3  (a) Require the retail dealer to allocate to the supplier for any

2-4  purpose:

2-5       (1) All or any portion of the retail dealer’s cigarette

2-6  category space or any other space that is used to display, advertise

2-7  or place a sign for a product; or

2-8       (2) A determined amount of space specified in

2-9  subparagraph (1) as a condition for participating in or receiving

2-10  payments under a program specified in paragraph (a) of

2-11  subsection 1;

2-12      (b) Limit or prohibit the retail dealer’s:

2-13          (1) Use of any cigarette category space; or

2-14          (2) Conduct relating to or participation in any promotion,

2-15  program or other activity relating to the sale, display,

2-16  merchandising, pricing or advertising of any product of another

2-17  supplier; or

2-18      (c) Violate any other provision of NRS 370.001 to 370.430,

2-19  inclusive, or any regulation adopted pursuant to those provisions.

2-20      3.  A person who violates any provision of this section is guilty

2-21  of a misdemeanor and shall be punished by a fine of not more

2-22  than $50 for each offense.

2-23      4.  As used in this section:

2-24      (a) “Cigarette category space” means all or any portion of the

2-25  premises of a retail dealer that is reserved, identified or otherwise

2-26  made available to display a sign, advertisement, promotion or

2-27  other statement relating to the sale of cigarettes.

2-28      (b) “Promotion” means a promotion, solicitation or

2-29  notification that induces or attempts to induce a person to

2-30  purchase cigarettes or any product relating to cigarettes.

2-31      (c) “Supplier” means any manufacturer, importer or

2-32  wholesale dealer who, directly or through an agent, representative,

2-33  broker or distributor, supplies, sells or delivers to a retail dealer in

2-34  this state, or offers to supply, sell or deliver to a retail dealer in this

2-35  state, any cigarettes or any advertisement, merchandise or

2-36  promotion relating to the sale of cigarettes.

2-37      Sec. 2.  NRS 370.001 is hereby amended to read as follows:

2-38      370.001  As used in NRS 370.001 to 370.430, inclusive, and

2-39  section 1 of this act, unless the context otherwise requires, the

2-40  words and terms defined in NRS 370.005 to 370.055, inclusive,

2-41  have the meanings ascribed to them in those sections.

2-42      Sec. 3.  NRS 370.250 is hereby amended to read as follows:

2-43      370.250  1.  If any dealer in cigarettes upon which a

2-44  precollected or advance tax is required to be paid fails to report to

2-45  the Department or its agents on or before the date due, the

3-1  Department may suspend his license or permit until the report is

3-2  received and found to be correct.

3-3  2.  The Department may temporarily suspend or permanently

3-4  revoke the licenses of any cigarette dealer for violating, or causing

3-5  or permitting to be violated, any of the provisions of NRS 370.001

3-6  to 370.430, inclusive[.] , and section 1 of this act.

3-7  Sec. 4.  NRS 370.3715 is hereby amended to read as follows:

3-8  370.3715  The Executive Director may adopt regulations [for

3-9  the enforcement] to carry out the provisions of NRS 370.371 to

3-10  370.379, inclusive[.] , and section 1 of this act.

3-11      Sec. 5.  NRS 370.3735 is hereby amended to read as follows:

3-12      370.3735  The provisions of NRS 370.371 to 370.379,

3-13  inclusive, and section 1 of this act, do not apply to a sale at

3-14  wholesale made:

3-15      1.  As an isolated transaction and not in the usual course of

3-16  business;

3-17      2.  When cigarettes are advertised, offered for sale or sold in a

3-18  bona fide clearance sale for the purpose of discontinuing trade in the

3-19  cigarettes, and the advertisement, offer to sell or sale states the

3-20  reason therefor and the quantity of cigarettes advertised, offered for

3-21  sale or to be sold;

3-22      3.  When cigarettes are advertised, offered for sale or sold as

3-23  imperfect or damaged and the advertising, offer to sell or sale states

3-24  the reason therefor and the quantity of cigarettes advertised, offered

3-25  for sale or to be sold;

3-26      4.  When cigarettes are sold upon the final liquidation of a

3-27  business; or

3-28      5.  When cigarettes are advertised, offered for sale or sold by a

3-29  fiduciary or other officer acting under the order or direction of a

3-30  court.

3-31      Sec. 6.  NRS 370.376 is hereby amended to read as follows:

3-32      370.376  A contract or agreement made by a person in

3-33  violation of any of the provisions of NRS 370.371 to 370.379,

3-34  inclusive, and section 1 of this act, is void and no recovery thereon

3-35  may be made.

3-36      Sec. 7.  NRS 370.378 is hereby amended to read as follows:

3-37      370.378  1.  An action may be maintained in any court of

3-38  competent jurisdiction to prevent, restrain or enjoin a violation or

3-39  threatened violation of any provision of NRS 370.371 to 370.379,

3-40  inclusive[.] , and section 1 of this act. An action may be instituted

3-41  by any person injured by a violation or threatened violation of NRS

3-42  370.371 to 370.379, inclusive, and section 1 of this act, or by the

3-43  Attorney General upon the request of the Executive Director. If in

3-44  such an action[,] a violation or threatened violation is established,

3-45  the court shall enjoin and restrain[,] or otherwise prohibit the

4-1  violation or threatened violation. In such an action it is not

4-2  necessary that actual damages to the plaintiff be alleged or proved,

4-3  but where alleged and proved, the plaintiff, in addition to injunctive

4-4  relief and costs of the suit, including reasonable attorney’s fees, may

4-5  recover from the defendant the actual damages sustained by the

4-6  plaintiff.

4-7  2.  If [no] injunctive relief is not sought or required, any person

4-8  injured by a violation of the provisions of NRS 370.371 to 370.379,

4-9  inclusive, and section 1 of this act, may maintain an action for

4-10  damages and costs, including attorney’s fees, in any court of

4-11  competent jurisdiction.

4-12      Sec. 8.  NRS 370.379 is hereby amended to read as follows:

4-13      370.379  1.  The Department may suspend or revoke the

4-14  license of a retail or wholesale dealer who violates the provisions of

4-15  NRS 370.371 to 370.379, inclusive, and section 1 of this act, or any

4-16  regulation adopted [thereunder,] pursuant to those provisions, after

4-17  notice to the licensee and a hearing as prescribed by the Department.

4-18      2.  The Department, upon a finding that the licensee has failed

4-19  to comply with any provision of NRS 370.371 to 370.379, inclusive,

4-20  and section 1 of this act, or any regulation adopted by the Executive

4-21  Director, shall, in the case of a first offender, suspend the license of

4-22  the licensee for not less than 5 nor more than 20 consecutive

4-23  business days. If the Department finds the offender has been guilty

4-24  of willful and persistent violations, it may suspend for not more than

4-25  6 months or revoke the person’s license.

4-26      3.  A person whose license has been revoked may apply to the

4-27  Department at the end of 1 year for a reinstatement of his license.

4-28  The Department may reinstate the license if the Department

4-29  determines that the licensee will comply [within] with the

4-30  provisions of this chapter and the regulations adopted by the

4-31  Department.

4-32      4.  A person whose license has been suspended or revoked shall

4-33  not sell cigarettes or permit cigarettes to be sold during the period of

4-34  suspension or revocation on the premises occupied by him or upon

4-35  any other premises controlled by him. The expiration, transfer,

4-36  surrender, continuance, renewal or extension of a license issued

4-37  pursuant to this chapter does not bar or abate any disciplinary

4-38  proceedings or action.

4-39      Sec. 9.  The amendatory provisions of this act apply to any

4-40  contract or agreement specified in section 1 of this act that is or was

4-41  entered into before, on or after October 1, 2003.

 

4-42  H