S T A T E O F N E W Y O R K
________________________________________________________________________
3717
2019-2020 Regular Sessions
I N A S S E M B L Y
January 30, 2019
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Introduced by M. of A. GUNTHER -- read once and referred to the Commit-
tee on Governmental Operations
AN ACT establishing a temporary task force on black market cigarettes
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The sale of black market, untaxed ciga-
rettes has resulted in the loss of hundreds of millions of dollars in
revenue to the state, robbing state health care and programs designed to
help children. According to the Tax Foundation, a Washington D.C., busi-
ness-oriented tax research organization, approximately 60.9 percentage
of cigarettes sold in New York were smuggled in from other states. In
addition, a study conducted by John Dunham & Associates on behalf of New
York Association of Convenience Stores found that state taxes were not
collected on one out of every two packs of cigarettes consumed in New
York State in 2011.
The widely available black market cigarettes threaten national securi-
ty and public safety of New Yorkers. Investigations conducted on feder-
al, state and local levels revealed that proceeds from black market
cigarettes are used to fuel organized crime and terrorist organizations,
such as Hamas and Hezbollah. In addition, this criminal activity creates
imbalanced and unfair business competition for law-abiding mom and pop
stores and other businesses who do pay taxes. In light of the overwhelm-
ing growth in black market cigarettes and the inherent dangers of this
unbridled criminal activity, it is imperative that we make concerted
efforts to develop enhanced measures and strategies to fully address
this issue.
It is the intent of the Legislature to create a temporary task force
to effectively address the illegal tobacco sale and distribution of
untaxed, unstamped and smuggled tobacco products in New York. The Task
Force will be comprised of departments and agencies involved in tackling
illicit tobacco and will examine and analyze currently existing laws,
policies and programs to develop measures that can reduce and prevent
black market tobacco in New York.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00568-01-9
A. 3717 2
§ 2. 1. A temporary task force, to be known as the temporary task
force on black market cigarettes, is hereby created to examine and
investigate such issues related to sale and distribution in New York of
tobacco products for which required tax has not been paid, including,
but not limited to, unlawfully manufactured cigarettes, cigarettes smug-
gled from low-tax jurisdictions, and stolen tobacco products from
convenience stores, cargos and truck hijacking. This task force will be
comprised of appropriate state agency personnel, law enforcement author-
ities, and an expert in the fields of taxation. The task force will
facilitate studying the root causes of rising black market cigarettes in
New York and assess the economic, health, and public safety impact of
illicit cigarette sales and distribution in this state.
2. Such temporary task force shall have the powers, including, but not
limited to, to:
(a) conduct public hearings in furtherance of the performance of its
duties under this act;
(b) issue subpoenas for and to compel attendance of witnesses and the
production of books, records, documents and other relevant evidence;
(c) recommend legislation consistent with the purpose of this section;
(d) develop and support innovative law enforcement models to target
and disrupt smuggling and distribution networks;
(e) develop and communicate messages for the general public, informing
them of the serious consequences of purchasing black market cigarettes;
(f) educate private sector entities about the dangers of black market
cigarettes; and
(g) develop measures and goals that will enable the task force and its
partners to better gauge success in decreasing the black market in ciga-
rettes.
3. The task force shall consist of 9 members as follows:
(a) the attorney general, or his or her designee thereof, shall chair
the task force;
(b) commissioner of financial services, or his or her designee;
(c) commissioner of criminal justice services, or his or her designee;
(d) commissioner of health, or his or her designee;
(e) the governor shall appoint one member who shall be an expert in
tobacco taxation;
(f) the temporary president of the senate and the speaker of the
assembly shall each appoint one member to the task force who shall be a
member of a state or local law enforcement agency; and
(g) the president of the Small Business Congress, Inc. or his or her
designee and the commissioner of the New York City department of finance
or his or her designee shall serve as non-voting members.
4. Four voting members of the temporary task force shall, at all
times, constitute a quorum. Members shall receive no compensation for
their services; members (including non-voting members) who are not
governmental employees shall be reimbursed for their reasonable expenses
incurred during the performance of their duties. Notwithstanding any
inconsistent provision of any general, special or local law, no officer
or employee of the state or of any political subdivision thereof shall
forfeit his or her office or employment by reason of acceptance of
appointment to the temporary task force.
5. Within one year of the effective date of this act, such temporary
task force shall issue a report containing such findings and recommenda-
tions.
§ 3. This act shall take effect immediately.