Senate Bill S5382

2013-2014 Legislative Session

Relates to the enforcement of state and city taxes on cigarettes and the regulation of tobacco products

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Archive: Last Bill Status - In Senate Committee Codes Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2014	referred to codes
May 16, 2013	referred to codes

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2013-S5382 (ACTIVE) - Details

See Assembly Version of this Bill:: A7545
Current Committee:: Senate Codes
Law Section:: Criminal Procedure Law
Laws Affected:: Amd §§1.20 & 2.10, CP L; amd §58, NYC Crim Ct Act; amd §168, NYC Chart; amd §§11-124, 11-1303, 11-1308, 11-1317, 11-4012, 11-4021, add §§11-1308.1 & 11-4024, NYC Ad Cd
Versions Introduced in 2015-2016 Legislative Session:: A1926

2013-S5382 (ACTIVE) - Summary

Relates to the enforcement of state and city taxes on cigarettes and the regulation of tobacco products.

2013-S5382 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5382

TITLE OF BILL:  An act to amend the criminal procedure law, the New
York city criminal court act, the New York city charter, and the
administrative code of the city of New York, in relation to the
enforcement of the state and New York city cigarette taxes and other
New York city taxes and the regulation of cigarettes and tobacco
products

SUMMARY OF PROVISIONS:

This bill would expand the authority of the New York City Sheriff's
Office and the New York City Department of Finance investigators with
respect to state and local laws concerning cigarettes and tobacco
products, including the enforcement of all state and local taxes on
such products. The bill would also expand the peace officer status of
Department of Finance investigators to include the enforcement of all
taxes administered by the Department of Finance as well as any state
or local laws concerning cigarettes or tobacco products. It would also
expressly authorize the Sheriff, Undersheriff and deputy sheriffs to
seize flavored tobacco products, which are illegal within the City of
New York, and cigarettes sold or possessed by unlicensed retail and
wholesale dealers.

This legislation removes matters relating to cigarette licensing from
the jurisdiction of the New York City Tax Appeals Tribunal and

authorizes the Commissioner to designate hearing officers or select an
administrative tribunal for hearings concerning any matter under
chapter 13 or chapter 40 of Title 11 of the Code. The bill further
provides that judicial review of determinations made under chapter 13
of Title 11 of the Code must be sought within 30 days rather than the
4-month period generally applicable to Article 78 proceedings.

The applicable penalties for failure to pay the City's cigarette tax
and for the possession of untaxed cigarettes and counterfeit cigarette
tax stamps would be increased under this proposal.  Additionally, the
bill would increase penalties for the knowing possession of untaxed
cigarettes and counterfeit cigarette tax stamps and would provide that
a person in the possession of more than 400 cigarettes in unstamped or
unlawfully stamped packages, who is also in the possession of
unaffixed, false, altered or counterfeit cigarette tax stamps,
imprints or impressions, would be presumed to be knowingly in the
possession of unstamped or unlawfully stamped cigarette packages.

The legislation would lower the Class 2, D and C thresholds in section
114012 of the Code with respect to the criminal penalties for
willfully evading the cigarette tax. It also lowers the threshold for
applying the presumption that the cigarettes are possessed for
purposes of sale..

JUSTIFICATION:

The widespread availability of untaxed cigarettes for sale in New York
City leads to adverse impacts on public health and deprives the City
and New York State of millions of dollars of cigarette tax revenues
every year. Targeted investigations of over 800 licensed retailers in
2012 by the Sheriff's Office found that 520 of these retailers


possessed cigarettes without the required New York City tax stamp. In
addition, untaxed cigarettes remain widely available from street
sellers and other illegitimate sources. Law abiding businesses that
sell cigarettes suffer because they are undercut by illicit and unfair
competition from the illegal acts of illegitimate dealers, and the
currently available enforcement tools and penalties for engaging in
the illicit cigarette trade have proven to be inadequate.

The bill corrects these various enforcement deficiencies with a
comprehensive, multi-faceted strategy: (1) increasing the civil and
criminal penalties for illegal acts; (2) expanding the law enforcement
authority of the New York City Sheriff's Office - the law enforcement
personnel most directly involved in enforcing the City's cigarette tax
laws; and (3) granting the New York City Commissioner of Finance the
authority to require cigarette dealers to file reports and submit
other information in electronic form.

The civil and criminal penalties in the current law are too low to
effectively deter the trade of illicit cigarettes and counterfeit tax
stamps. The bill increases the penalties for possessing untaxed
cigarettes and unaffixed counterfeit tax stamps, and reduces the
penalty threshold in a manner consistent with the existing personal
use exemptions. The bill also reduces the possession thresholds for
class E and class D felonies. These changes will expand the scope of
cases eligible for- felony prosecution and more effectively deter the
most egregious offenses involving untaxed cigarettes.

The Sheriff's Office is the primary law enforcement agency responsible
for the enforcement of the City's cigarette tax laws. Under current
law, Department of Finance investigators must rely on other law
enforcement agencies for key enforcement mechanisms, such as obtaining
and executing warrants. Given the inherent mobility of untaxed
cigarettes, time is of the essence in moving to shut down illegal
cigarette operations. The new authority created in the bill will allow
Department of Finance investigators to obtain and execute search and
arrest warrants directly so that they can expeditiously enforce the
cigarette tax laws. The bill would also enhance the ability of the
Sheriff's Office to enforce other tax laws administered by the
Department of Finance.

At present, the Commissioner of Finance can require stamping agents
and wholesale and retail cigarette dealers to file reports, but cannot
require that these reports be submitted in electronic form.  Paper
submission cannot be easily searched for important data. By requiring
the electronic submission of reports and other data from stamping
agents and wholesale and retail cigarette dealers, Department of
Finance investigators and other Department of Finance employees can
search fox trends in the electronic data and better track the
unauthorized distribution of cigarettes.

PRIOR LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None.


EFFECTIVE DATE:

Immediately.

2013-S5382 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5382

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Codes

AN ACT to amend the criminal procedure law, the New York  city  criminal
  court  act,  the New York city charter, and the administrative code of
  the city of New York, in relation to the enforcement of the state  and
  New  York  city  cigarette taxes and other New York city taxes and the
  regulation of cigarettes and tobacco products

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Subdivision  34 of section 1.20 of the criminal procedure
law is amended by adding a new paragraph (w) to read as follows:
  (W) THE SHERIFF, UNDERSHERIFF AND DEPUTY SHERIFFS OF NEW YORK CITY AND
EMPLOYEES OF THE NEW YORK CITY DEPARTMENT OF FINANCE DESCRIBED IN SUBDI-
VISION FIVE OF SECTION 2.10 OF THIS TITLE RESPONSIBLE FOR  THE  ENFORCE-
MENT  OF  LAWS  RELATING  TO  THE TAX ON CIGARETTES AND TOBACCO PRODUCTS
CONTAINED IN ARTICLE TWENTY AND SECTION EIGHTEEN HUNDRED FOURTEEN OF THE
TAX LAW, THE NEW YORK CITY CIGARETTE TAX CONTAINED IN CHAPTERS  THIRTEEN
AND  FORTY OF TITLE ELEVEN OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW
YORK, AND ANY OTHER LAW RELATING TO THE NEW YORK CITY CIGARETTE  TAX  OR
THE TAX ON CIGARETTES AND TOBACCO PRODUCTS, FOR PURPOSES OF:
  A.  EXECUTING  A WARRANT OF ARREST UNDER ARTICLE ONE HUNDRED TWENTY OF
THIS CHAPTER;
  B. PROCURING AND SERVING A SUMMONS PURSUANT  TO  ARTICLE  ONE  HUNDRED
THIRTY OF THIS CHAPTER;
  C.  ISSUING  AND  SERVING AN APPEARANCE TICKET PURSUANT TO ARTICLE ONE
HUNDRED FIFTY OF THIS CHAPTER;
  D. EXECUTING A BENCH WARRANT PURSUANT TO SECTION 530.70 OF THIS  CHAP-
TER;
  E.  EXECUTING A MATERIAL WITNESS WARRANT PURSUANT TO SECTION 620.70 OF
THIS CHAPTER; AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10957-02-3

S. 5382                             2

  F. APPLYING FOR  AND  EXECUTING  SEARCH  WARRANTS  UNDER  ARTICLE  SIX
HUNDRED NINETY OF THIS CHAPTER.
  S  2.  Subdivision 5 of section 2.10 of the criminal procedure law, as
added by chapter 843 of the laws of 1980, is amended to read as follows:
  5. Employees of the New York city department of  finance  assigned  BY
THE  COMMISSIONER  OF  FINANCE  to enforcement of [the tax on cigarettes
imposed by title D of chapter forty-six of the  administrative  code  of
the city of New York by the commissioner of finance]:
  (A)  LAWS RELATING TO NEW YORK CITY TAXES CONTAINED IN TITLE ELEVEN OF
THE ADMINISTRATIVE CODE OF THE CITY OF  NEW  YORK  ADMINISTERED  BY  THE
DEPARTMENT OF FINANCE; AND
  (B) ANY STATE OR LOCAL LAW CONCERNING CIGARETTES OR TOBACCO PRODUCTS.
  S  3. Subdivision 15 of section 58 of the New York city criminal court
act, as amended by chapter 843 of the laws of 1980, is amended  to  read
as follows:
  (15)  Where  an  appearance  ticket  has  been served by an officer or
employee of the department of taxation and finance of the state  of  New
York[, or by an employee of the New York city department of finance] who
is  a peace officer under the provisions of section 2.10 of the criminal
procedure law, in lieu of arrest as authorized by  article  one  hundred
fifty of the criminal procedure law, in cases relating to enforcement of
the  tax  on  cigarettes imposed by article twenty of the tax law [or by
title D of chapter forty-six of the administrative code of the  city  of
New  York],  any officer or employee of the state department of taxation
and finance assigned to act in  the  capacity  of  director  of  special
investigations,  principal  special  tax investigator, associate special
tax investigator, supervising excise tax examiner or supervising  excise
tax  investigator[,  and  in the city of New York, the assistant commis-
sioner, chief of special investigations,  or  deputy  chief  of  special
investigations  employed  by the New York city department of finance] is
empowered, upon written authorization of the  commissioner  of  taxation
and  finance [or the commissioner of finance of the city of New York], a
copy of which shall be filed with the court in the  manner  provided  by
rule  or  order  of  court, to administer to such officers all necessary
oaths in connection with the execution of the accusatory  instrument  to
be  presented  in  court  by  such  officers  in the prosecution of such
offense. The total number  of  New  York  state  officers  or  employees
authorized  to  administer  oaths pursuant to this subdivision shall not
exceed fifteen.
  S 4. Section 58 of the New York city criminal court act is amended  by
adding two new subdivisions 21 and 22 to read as follows:
  (21)  WHERE  AN  APPEARANCE  TICKET HAS BEEN SERVED BY A MEMBER OF THE
OFFICE OF THE SHERIFF OF THE CITY OF NEW YORK  WHO  IS  A  PEACE  OFFICE
UNDER  SUBDIVISION TWO OF SECTION 2.10 OF THE CRIMINAL PROCEDURE LAW, IN
LIEU OF AN ARREST IN CASES AUTHORIZED BY ARTICLE ONE  HUNDRED  FIFTY  OF
THE  CRIMINAL  PROCEDURE  LAW,  A  SERGEANT DEPUTY SHERIFF, A LIEUTENANT
DEPUTY SHERIFF, UNDERSHERIFF OR SHERIFF OF SUCH OFFICE IS AUTHORIZED  TO
ADMINISTER  TO SUCH PEACE OFFICER ALL NECESSARY OATHS IN CONNECTION WITH
THE EXECUTION OF THE ACCUSATORY INSTRUMENT TO BE PRESENTED IN  COURT  BY
SUCH PEACE OFFICER IN THE PROSECUTION OF SUCH OFFENSE.
  (22)  WHERE AN APPEARANCE TICKET HAS BEEN SERVED BY AN EMPLOYEE OF THE
NEW YORK CITY DEPARTMENT OF FINANCE WHO IS A PEACE OFFICER UNDER  SUBDI-
VISION FIVE OF SECTION 2.10 OF THE CRIMINAL PROCEDURE LAW, IN LIEU OF AN
ARREST  IN CASES AUTHORIZED BY ARTICLE ONE HUNDRED FIFTY OF THE CRIMINAL
PROCEDURE LAW, THE DEPUTY COMMISSIONER, ASSISTANT COMMISSIONER, DIRECTOR
OF TAX ENFORCEMENT  OR  ANY  OTHER  SUPERVISOR  OF  SUCH  PEACE  OFFICER

S. 5382                             3

EMPLOYED  BY  THE  DEPARTMENT  OF  FINANCE,  IS  EMPOWERED, UPON WRITTEN
AUTHORIZATION OF THE COMMISSIONER OF FINANCE OF THE CITY OF NEW YORK,  A
COPY OF WHICH SHALL BE FILED WITH THE COURT IN A MANNER PROVIDED BY RULE
OR ORDER OF THE COURT, TO ADMINISTER TO SUCH PEACE OFFICER ALL NECESSARY
OATHS  IN  CONNECTION WITH THE EXECUTION OF THE ACCUSATORY INSTRUMENT TO
BE PRESENTED IN COURT BY SUCH PEACE OFFICER IN THE PROSECUTION  OF  SUCH
OFFENSE.
  S  5.   Subdivision a of section 168 of the charter of the city of New
York, as amended by local law number 59 of the city of New York for  the
year 2007, is amended to read as follows:
  a.  An  independent  tax  appeals tribunal is hereby established. Such
tribunal shall be within the office of administrative tax appeals estab-
lished under section one hundred fifty of  this  charter.  The  tribunal
shall  have  jurisdiction  to  hear and determine cases initiated by the
filing of petitions protesting notices issued  by  the  commissioner  of
finance,  which give a person the right to a hearing, including, but not
limited to, any notice of determination of tax due, of a tax deficiency,
of a denial of a refund or credit application  [or  of  the  refusal  to
grant,  the suspension or the revocation of a license issued pursuant to
chapter thirteen of title eleven  of  the  administrative  code],  which
notices  relate  to  nonproperty  taxes,  excise  taxes and annual vault
charges imposed by the city, except those taxes and charges administered
by the State of New York on behalf of the City of New York. For purposes
of the preceding sentence, if the commissioner of finance fails  to  act
with  respect  to a refund application before the expiration of the time
period after which the taxpayer may file a petition for refund with  the
tribunal  pursuant  to  subdivision (c) of section 11-529 or subdivision
three of section 11-680 of the administrative code, such  failure  shall
be deemed to be a notice of denial of a refund issued by the commission-
er  of  finance  pursuant to such subdivision. The tribunal shall review
petitions and other documents submitted to it, hold hearings, and render
decisions as provided in this chapter. In  rendering  its  decisions  on
claims  asserted by taxpayers or the commissioner of finance, the tribu-
nal shall have the same power  and  authority  as  the  commissioner  of
finance  to  impose,  modify or waive any taxes within its jurisdiction,
interest thereon, and any applicable  civil  penalties.  In  appeals  in
which  the rules of the commissioner of finance are at issue, the tribu-
nal shall have the power and authority to rule on the legality  of  such
rules.
  S 6. Subdivision a of section 11-124 of the administrative code of the
city  of  New  York,  as  added  by  chapter 808 of the laws of 1992, is
amended to read as follows:
  a. The commissioner of finance may establish a procedure for providing
conciliation conferences for purposes  of  settling  contested  determi-
nations  of  taxes  or  charges  or  denials  of refunds or credits with
respect to taxes or charges imposed  under  chapter  five,  six,  seven,
eight,  nine,  eleven,  twelve, thirteen, fourteen, fifteen, twenty-one,
twenty-two, twenty-four, twenty-five or twenty-seven of this title[,  or
for  the  purpose  of settling disputes arising from the notification of
the refusal to grant, the suspension or  the  revocation  of  a  license
issued  pursuant to chapter thirteen of this title]. If such a procedure
is established, a conciliation  conference  shall  be  provided  at  the
option  of any taxpayer or any other person subject to the provisions of
any of such chapters. For purposes of this subdivision, if  the  commis-
sioner  of  finance  fails  to  act with respect to a refund application
before the expiration of the time period after which  the  taxpayer  may

S. 5382                             4

file  a petition for refund with the tax appeals tribunal established by
section one hundred sixty-eight of the charter pursuant  to  subdivision
(c)  of  section  11-529  or  subdivision three of section 11-680 of the
code, such failure shall be deemed to be the denial of a refund.
  S  7.  Paragraphs  2  and 4 of subdivision d of section 11-1303 of the
administrative code of the city of New York, as  amended  by  local  law
number  2 of the city of New York for the year 2000, are amended to read
as follows:
  (2) The commissioner of finance may also suspend or revoke a wholesale
cigarette license IN ACCORDANCE  WITH  THE  REQUIREMENTS  OF  ANY  OTHER
SECTION  OF  THIS CODE or any rules promulgated thereunder which author-
izes the suspension or revocation of a wholesale cigarette license.
  (4) Upon suspending or revoking any wholesale cigarette  license,  the
commissioner  of finance shall direct the holder thereof to surrender to
the commissioner of finance immediately all wholesale cigarette licenses
or duplicates thereof issued to such holder and the holder shall surren-
der promptly all  such  licenses  to  the  commissioner  of  finance  as
directed.  Before  the  commissioner  of  finance  suspends or revokes a
wholesale cigarette license or notifies  the  commissioner  of  consumer
affairs  of  a  finding of a violation of this chapter with respect to a
retail cigarette license pursuant to paragraph (1) of this  subdivision,
he or she shall notify the holder and PROVIDE the holder [shall be enti-
tled  to  a  hearing, if desired, if the holder, within ninety days from
the date of such notification, or, if the commissioner  of  finance  has
established  a  conciliation procedure pursuant to section 11-124 of the
code and the taxpayer has requested a conciliation conference in accord-
ance therewith, within ninety days from the mailing  of  a  conciliation
decision  or  the date of the commissioner's confirmation of the discon-
tinuance of the conciliation proceeding, both (A) serves a petition upon
the commissioner of finance and  (B)  files  a  petition  with  the  tax
appeals  tribunal  for]  WITH a hearing. After such hearing, the commis-
sioner of finance, good cause appearing therefor, may suspend or  revoke
the  wholesale cigarette license, and, in the case of a retail cigarette
license, notify the commissioner of consumer affairs of a  violation  of
this  chapter  or  any rules promulgated thereunder. Upon such notifica-
tion, the commissioner of consumer  affairs  may  suspend  or  revoke  a
retail  cigarette license as provided in subdivision b of section 20-206
of the code. The commissioner of  finance  may,  by  rule,  provide  for
granting a similar hearing to an applicant who has been refused a whole-
sale cigarette license by the commissioner of finance.
  S  8.  Subdivision  1 of section 11-1308 of the administrative code of
the city of New York is amended to read as follows:
  1. To make, adopt and amend rules and regulations appropriate  to  the
carrying  out of this chapter and the purposes thereof; [and] to require
the filing of reports AND THE SUBMISSION OF OTHER DATA by agents  and/or
WHOLESALE AND RETAIL dealers IN AN ELECTRONIC FORM; AND TO IMPOSE PENAL-
TIES  OF UP TO TWO THOUSAND FIVE HUNDRED DOLLARS FOR THE FAILURE TO FILE
SUCH REPORTS OR SUBMIT SUCH DATA;
  S 9. Section 11-1308 of the administrative code of  the  city  of  New
York is amended by adding a new subdivision 12 to read as follows:
  12.  TO  DESIGNATE  HEARING  OFFICERS OR AN ADMINISTRATIVE TRIBUNAL TO
CONDUCT ANY HEARING PROVIDED FOR UNDER THIS  CHAPTER  OR  UNDER  CHAPTER
FORTY  OF THIS TITLE WITH RESPECT TO ANY MATTER FOR WHICH A TRIBUNAL HAS
NOT BEEN PROVIDED UNDER THIS CODE OR ANY OTHER LAW.
  S 10. The administrative code of the city of New York  is  amended  by
adding a new section 11-1308.1 to read as follows:

S. 5382                             5

  S 11-1308.1 JUDICIAL REVIEW. A. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS  CHAPTER,  JUDICIAL  REVIEW  OF  ANY DECISION FOLLOWING ANY HEARING
PROVIDED UNDER THIS CHAPTER SHALL BE SOUGHT WITHIN THIRTY DAYS AFTER THE
GIVING OF THE NOTICE OF SUCH DECISION.
  B.  SUBDIVISION A OF THIS SECTION SHALL NOT APPLY TO ANY DETERMINATION
MADE REGARDING:
  (1) ANY CIGARETTE TAX OR CIGARETTE TAX REFUND UNDER SECTION 11-1310 OR
11-1311 OF THIS CHAPTER, OR
  (2) ANY CIGARETTE TAX PENALTY IMPOSED UNDER SECTION  11-1317  OF  THIS
CHAPTER.
  S  11.  Subdivisions  a and b of section 11-1317 of the administrative
code of the city of New York, subdivision b as amended by chapter 458 of
the laws of 2006, are amended to read as follows:
  a. Any person failing to pay a tax payable under this chapter when due
shall be subject to a penalty of [fifty] ONE HUNDRED per centum  of  the
amount  of  tax  due, but the commissioner of finance, if satisfied that
the delay was excusable, may remit all or any part of such penalty. Such
penalty shall be paid and disposed of in the same manner as other reven-
ues under this chapter. Unpaid penalties may be  enforced  in  the  same
manner as the tax imposed by this chapter.
  b.  (1)  In addition to any other penalty imposed by this section, the
commissioner of finance may (a) impose a penalty of not more than  [one]
TWO  hundred dollars for each two hundred cigarettes or fraction thereof
in excess of [one] FOUR HUNDRED BUT NOT MORE  THAN  TWO  thousand  ciga-
rettes  in unstamped or unlawfully stamped packages in the possession or
under the control of any person, AND A PENALTY OF  NOT  MORE  THAN  FIVE
HUNDRED  DOLLARS  FOR EACH TWO HUNDRED CIGARETTES IN EXCESS OF TWO THOU-
SAND CIGARETTES and (b) impose a penalty of not more than [two  hundred]
ONE  THOUSAND dollars for each ten [affixed or] unaffixed false, altered
or counterfeit cigarette tax stamps, imprints or impressions,  or  frac-
tion  thereof,  [in  excess  of  one hundred affixed or unaffixed false,
altered or counterfeit cigarette tax stamps, imprints or impressions] in
the possession or under the control of any person. Such penalty shall be
determined as provided in section 11-1310 of this chapter,  and  may  be
reviewed  only pursuant to such section. Such penalty may be enforced in
the same manner as the tax imposed by this chapter. The commissioner  of
finance,  in his or her discretion, may remit all or part of such penal-
ty. Such penalty shall be paid and disposed of in  the  same  manner  as
other revenues under this chapter.
  (2)  The  penalties  imposed  by  this paragraph may be imposed by the
commissioner of finance in addition to any other penalty imposed by this
section, but in lieu of the penalties imposed  by  subparagraph  (a)  of
paragraph  one  of  this  subdivision:  (a)  not  less than [thirty] TWO
HUNDRED dollars but not more than [two] FIVE hundred  dollars  for  each
two hundred cigarettes, or fraction thereof, in excess of [one thousand]
FOUR  HUNDRED  cigarettes  but less than or equal to [five] TWO thousand
cigarettes in unstamped or unlawfully stamped packages knowingly in  the
possession  or  knowingly  under the control of any person; (b) not less
than [seventy-five] TWO HUNDRED FIFTY dollars but  not  more  than  [two
hundred]  ONE THOUSAND dollars for each two hundred cigarettes, or frac-
tion thereof, in excess of [five] TWO thousand cigarettes but less  than
or  equal to [twenty] TEN thousand cigarettes in unstamped or unlawfully
stamped packages knowingly in the  possession  or  knowingly  under  the
control  of any person; and (c) not less than [one] FIVE hundred dollars
but not more than [two  hundred]  ONE  THOUSAND  dollars  for  each  two
hundred  cigarettes,  or  fraction  thereof,  in excess of [twenty] FIVE

S. 5382                             6

thousand cigarettes in unstamped or unlawfully stamped  packages,  know-
ingly  in  the  possession or knowingly under the control of any person.
Such penalty shall be determined as provided in section 11-1310 of  this
chapter, and may be reviewed only pursuant to such section. Such penalty
may  be  enforced in the same manner as the tax imposed by this chapter.
The commissioner of finance, in his or her discretion, may remit all  or
part  of such penalty. Such penalty shall be paid and disposed of in the
same manner as other revenues under this chapter.
  (3) A PERSON, IN THE POSSESSION OF MORE THAN FOUR  HUNDRED  CIGARETTES
IN  UNSTAMPED  OR  UNLAWFULLY  STAMPED  PACKAGES,  WHO  IS  ALSO  IN THE
POSSESSION OF UNAFFIXED, FALSE, ALTERED  OR  COUNTERFEIT  CIGARETTE  TAX
STAMPS,  IMPRINTS  OR  IMPRESSIONS, SHALL BE PRESUMED TO KNOWINGLY BE IN
THE POSSESSION OF, OR HAVE UNDER HIS, HER OR ITS CONTROL, THE  UNSTAMPED
OR UNLAWFULLY STAMPED PACKAGES DESCRIBED IN PARAGRAPH TWO OF THIS SUBDI-
VISION.
  S 12. Subdivisions (a), (c) and (d) of section 11-4012 of the adminis-
trative  code  of  the  city  of New York, subdivision (a) as amended by
chapter 201 of the laws of 2009, subdivision (c) as amended  by  chapter
262  of  the  laws of 2000, paragraph 1 of subdivision (c) as amended by
chapter 508 of the laws of 2004, and subdivision (d) as added by chapter
765 of the laws of 1985, are amended to read as follows:
  (a) Attempt to evade or defeat tax. Any person who willfully  attempts
in  any manner to evade or defeat any tax imposed by chapter thirteen of
this title or payment thereof where: (1) such tax  is  unpaid  on  [ten]
FIVE  thousand cigarettes or more or (2) such person has previously been
convicted [two or more times] of a  crime  set  forth  in  this  chapter
relating to cigarette taxes; shall be guilty of a class E felony.
  (c)  (1)  Any person, other than an agent so authorized by the commis-
sioner of finance, who willfully possesses or transports for the purpose
of sale [ten] FIVE thousand  or  more  cigarettes  subject  to  the  tax
imposed by chapter thirteen of this title in any unstamped or unlawfully
stamped  packages  or  who willfully sells or offers for sale [ten] FIVE
thousand or more cigarettes in any unstamped or unlawfully stamped pack-
ages in violation of such chapter shall be guilty of a class E felony.
  (2) Any person, other than an agent appointed by the  commissioner  of
finance,  who  willfully possesses or transports for the purpose of sale
[thirty] TEN thousand or more cigarettes subject to the tax  imposed  by
chapter  thirteen  of  this title in any unstamped or unlawfully stamped
packages or who willfully sells or offers for sale [thirty] TEN thousand
or more cigarettes in any unstamped or unlawfully  stamped  packages  in
violation of such chapter shall be guilty of a class D felony.
  (d) For the purposes of this section, the possession or transportation
within  this city by any person, other than an agent, at any one time of
[five thousand or] more THAN FOUR HUNDRED  cigarettes  in  unstamped  or
unlawfully  stamped  packages  shall  be  presumptive evidence that such
cigarettes are possessed or transported for the purpose of sale and  are
subject  to  the  tax  imposed  by  chapter thirteen of this title. With
respect to such possession or transportation, any provisions of  chapter
thirteen  of  this  title providing for a time period during which a use
tax imposed by such chapter may  be  paid  on  unstamped  cigarettes  or
unlawfully  or  improperly stamped cigarettes or during which such ciga-
rettes may be returned to an agent shall not apply. The possession with-
in this city of more than four hundred cigarettes in unstamped or unlaw-
fully stamped packages by any person other than an agent at any one time
shall be presumptive evidence that such cigarettes are subject to tax as
provided by chapter thirteen of this title.

S. 5382                             7

  S 13. Subdivisions (a) and (c) of section 11-4021 of  the  administra-
tive code of the city of New York, as amended by chapter 556 of the laws
of 2011, are amended to read as follows:
  (a) Whenever a police officer designated in section 1.20 of the crimi-
nal  procedure  law  or A SHERIFF, UNDERSHERIFF OR DEPUTY SHERIFF OF THE
CITY OF NEW YORK DESIGNATED  A  PEACE  OFFICER  IN  SUBDIVISION  TWO  OF
SECTION  2.10  OF SUCH LAW, OR a peace officer designated in subdivision
five of section 2.10 of such law, acting pursuant to his special duties,
shall discover any cigarettes subject to any  tax  provided  by  chapter
thirteen  of this title, and upon which the tax has not been paid or the
stamps not affixed as required by such chapter, they are hereby  author-
ized  and empowered forthwith to seize and take possession of such ciga-
rettes, together with any vending machine or receptacle  in  which  they
are held for sale. Such cigarettes, vending machine or receptacle seized
by  a  police  officer or such peace officer shall be turned over to the
commissioner of finance.
  (c) The commissioner of finance may, within a  reasonable  time  after
the forfeiture to the city of such vending machines or receptacles, upon
publication  of  a  notice  to  such effect for at least five successive
days, in a newspaper published or circulated  in  the  city,  sell  such
forfeited  vending  machines  or  receptacles at public sale and pay the
proceeds into the treasury of the city to  the  credit  of  the  general
fund.  Such  seized vending machines or receptacles may be sold prior to
forfeiture if the owner of the seized property  consents  to  the  sale.
Notwithstanding any other provision of this section, the commissioner of
finance  may  enter  into  an agreement with the state tax commission to
provide for the disposition between the city and state of  the  proceeds
from  any such sale. The commissioner of finance may [also] transfer any
seized cigarettes to the state for destruction. All cigarettes forfeited
to the [state] CITY shall be  destroyed  or  used  for  law  enforcement
purposes,  except  that  cigarettes  that  violate,  or are suspected of
violating, federal trademark laws or import laws shall not be  used  for
law  enforcement purposes. If the commissioner determines the cigarettes
may not be used  for  law  enforcement  purposes,  the  commissioner  of
finance  must, within a reasonable time after the forfeiture to the city
of such cigarettes, upon publication of a notice to such effect  for  at
least  five  successive  days,  prior  to  destruction,  in  a newspaper
published or circulated in the city, destroy such forfeited  cigarettes.
Such  commissioner  may,  prior to any destruction of cigarettes, permit
the true holder of the trademark rights in  the  cigarettes  to  inspect
such  forfeited  cigarettes  in  order  to  assist  in any investigation
regarding such cigarettes.
  S 14. The administrative code of the city of New York  is  amended  by
adding a new section 11-4024 to read as follows:
  S  11-4024  SEIZURE AND FORFEITURE OF TAXED AND LAWFULLY STAMPED CIGA-
RETTES SOLD OR POSSESSED BY UNLICENSED RETAIL OR WHOLESALE  DEALERS  AND
FLAVORED  TOBACCO  PRODUCTS. (A) WHENEVER A POLICE OFFICER DESIGNATED IN
SECTION 1.20 OF THE CRIMINAL PROCEDURE LAW OR A PEACE  OFFICER  EMPLOYED
BY  THE DEPARTMENT OF FINANCE, INCLUDING BUT NOT LIMITED TO THE SHERIFF,
UNDERSHERIFF OR DEPUTY SHERIFFS OF THE CITY OF NEW  YORK  DESIGNATED  AS
PEACE OFFICERS IN SUBDIVISION TWO OF SECTION 2.10 OF THE CRIMINAL PROCE-
DURE  LAW, SHALL DISCOVER (1) ANY CIGARETTES SUBJECT TO ANY TAX PROVIDED
BY CHAPTER THIRTEEN OF THIS TITLE, AND UPON WHICH THE TAX HAS BEEN  PAID
AND  THE STAMPS AFFIXED AS REQUIRED BY SUCH CHAPTER, BUT SUCH CIGARETTES
ARE SOLD, OFFERED FOR SALE OR POSSESSED BY  A  PERSON  IN  VIOLATION  OF
SECTION  11-1303,  17-703  OR  20-202  OF THIS CODE, OR (2) ANY FLAVORED

S. 5382                             8

TOBACCO PRODUCT THAT IS SOLD, OFFERED FOR SALE OR POSSESSED WITH  INTENT
TO SELL IN VIOLATION OF SECTION 17-715 OF THIS CODE, HE OR SHE IS HEREBY
AUTHORIZED  AND EMPOWERED FORTHWITH TO SEIZE AND TAKE POSSESSION OF SUCH
CIGARETTES  OR  FLAVORED  TOBACCO  PRODUCT,  TOGETHER  WITH  ANY VENDING
MACHINE OR RECEPTACLE IN WHICH SUCH CIGARETTES OR FLAVORED TOBACCO PROD-
UCT ARE HELD FOR SALE. SUCH  CIGARETTES  OR  FLAVORED  TOBACCO  PRODUCT,
VENDING  MACHINE  OR  RECEPTACLE  SEIZED  BY SUCH POLICE OFFICER OR SUCH
PEACE OFFICER SHALL BE TURNED OVER TO THE COMMISSIONER OF FINANCE.
  (B) THE SEIZED CIGARETTES OR FLAVORED TOBACCO PRODUCT AND ANY  VENDING
MACHINE  OR  RECEPTACLE SEIZED THEREWITH, BUT NOT THE MONEY CONTAINED IN
SUCH VENDING MACHINE OR RECEPTACLE, SHALL THEREUPON BE FORFEITED TO  THE
CITY,  UNLESS  THE PERSON FROM WHOM THE SEIZURE IS MADE, OR THE OWNER OF
SUCH SEIZED CIGARETTES OR FLAVORED TOBACCO PRODUCT, VENDING  MACHINE  OR
RECEPTACLE,  OR  ANY  OTHER  PERSON HAVING AN INTEREST IN SUCH PROPERTY,
SHALL WITHIN TEN DAYS OF SUCH SEIZURE,  APPLY  TO  THE  COMMISSIONER  OF
FINANCE  FOR  A  HEARING  TO  DETERMINE  THE PROPERTY OF THE SEIZURE, OR
UNLESS THE COMMISSIONER OF FINANCE  SHALL  ON  HIS  OR  HER  OWN  MOTION
RELEASE THE SEIZED CIGARETTES, FLAVORED TOBACCO PRODUCT, VENDING MACHINE
OR RECEPTACLE. AFTER SUCH HEARING THE COMMISSIONER OF FINANCE SHALL GIVE
NOTICE  OF  HIS  OR  HER DECISION TO THE PETITIONER. THE DECISION OF THE
COMMISSIONER SHALL BE REVIEWABLE FOR ERROR, ILLEGALITY,  UNCONSTITUTION-
ALITY  OR  ANY  OTHER  REASON  WHATSOEVER  BY A PROCEEDING UNDER ARTICLE
SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND  RULES  WITHIN  THIRTY  DAYS
AFTER  THE  GIVING OF SUCH DECISION. SUCH PROCEEDING SHALL NOT BE INSTI-
TUTED UNLESS THERE SHALL FIRST BE FILED WITH THE COMMISSIONER OF FINANCE
AN UNDERTAKING, ISSUED BY A SURETY COMPANY AUTHORIZED TO TRANSACT  BUSI-
NESS  IN  NEW YORK STATE AND APPROVED BY THE SUPERINTENDENT OF FINANCIAL
SERVICES OF NEW YORK STATE AS TO SOLVENCY AND  RESPONSIBILITY,  IN  SUCH
AMOUNT  AS  A  JUSTICE OF THE SUPREME COURT SHALL APPROVE, TO THE EFFECT
THAT IF SUCH PROCEEDING BE DISMISSED,  OR  THE  SEIZURE  CONFIRMED,  THE
PETITIONER WILL PAY ALL COSTS AND CHARGES WHICH MAY ACCRUE IN THE PROSE-
CUTION OF THE PROCEEDING.
  (C)  THE  COMMISSIONER  OF FINANCE MAY, WITHIN A REASONABLE TIME AFTER
THE FORFEITURE TO THE CITY OF SUCH VENDING MACHINE OR  RECEPTACLE  UNDER
THIS  SECTION,  UPON PUBLICATION OF A NOTICE TO SUCH EFFECT FOR AT LEAST
FIVE SUCCESSIVE DAYS, IN A NEWSPAPER  PUBLISHED  OR  CIRCULATED  IN  THE
CITY,  SELL  SUCH FORFEITED VENDING MACHINE OR RECEPTACLE AT PUBLIC SALE
AND PAY THE PROCEEDS INTO THE TREASURY OF THE CITY TO THE CREDIT OF  THE
GENERAL  FUND.  SUCH  SEIZED  VENDING  MACHINE OR RECEPTACLE MAY BE SOLD
PRIOR TO FORFEITURE IF THE OWNER OF THE SEIZED PROPERTY CONSENTS TO  THE
SALE.  CIGARETTES  AND  FLAVORED  TOBACCO PRODUCTS FORFEITED TO THE CITY
UNDER THIS SECTION SHALL  BE  DESTROYED  OR  USED  FOR  LAW  ENFORCEMENT
PURPOSES,  EXCEPT  THAT  CIGARETTES  THAT  VIOLATE,  OR ARE SUSPECTED OF
VIOLATING, FEDERAL TRADEMARK LAWS OR IMPORT LAWS SHALL NOT BE  USED  FOR
LAW  ENFORCEMENT PURPOSES. IF THE COMMISSIONER DETERMINES THE CIGARETTES
FORFEITED UNDER THIS  SECTION  MAY  NOT  BE  USED  FOR  LAW  ENFORCEMENT
PURPOSES,  THE  COMMISSIONER  OF  FINANCE MUST, WITHIN A REASONABLE TIME
AFTER THE FORFEITURE TO THE CITY OF SUCH CIGARETTES, UPON PUBLICATION OF
A NOTICE TO SUCH EFFECT FOR AT LEAST  FIVE  SUCCESSIVE  DAYS,  PRIOR  TO
DESTRUCTION, IN A NEWSPAPER PUBLISHED OR CIRCULATED IN THE CITY, DESTROY
SUCH FORFEITED CIGARETTES.
  (D)  IN  THE  ALTERNATIVE,  THE COMMISSIONER OF FINANCE, ON REASONABLE
NOTICE BY MAIL OR OTHERWISE, MAY PERMIT THE PERSON FROM WHOM  A  SEIZURE
OF  CIGARETTES  OR FLAVORED TOBACCO PRODUCT UNDER THIS SECTION WAS MADE,
TO REDEEM ANY VENDING MACHINE OR RECEPTACLE SEIZED WITH SUCH  CIGARETTES
OR FLAVORED TOBACCO PRODUCT, OR MAY PERMIT THE OWNER OF ANY SUCH VENDING

S. 5382                             9

MACHINE  OR RECEPTACLE TO REDEEM THE SAME, UPON THE PAYMENT OF ANY CIVIL
PENALTY IMPOSED PURSUANT TO CHAPTER SEVEN OF TITLE SEVENTEEN OR SUBCHAP-
TER ONE OF CHAPTER TWO OF TITLE  TWENTY  OF  THIS  CODE  AND  THE  COSTS
INCURRED IN SUCH PROCEEDING.
  S 15. This act shall take effect immediately.

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Senate Bill S5382

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Sponsored By

Diane J. Savino

Archive: Last Bill Status - In Senate Committee Codes Committee

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co-Sponsors

Martin J. Golden

2013-S5382 (ACTIVE) - Details

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2013-S5382 (ACTIVE) - Sponsor Memo

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