S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5144
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 7, 2019
                                ___________
 
 Introduced  by  M.  of  A.  CYMBROWITZ -- Multi-Sponsored by -- M. of A.
   WEPRIN -- read once and referred to the Committee on Ways and Means
 
 AN ACT to amend the tax law, in  relation  to  increasing  the  presumed
   "cost  of the agent" relating to cigarette marketing standards; and to
   amend the state finance law, in relation to establishing the cigarette
   tax enforcement account; and making an appropriation therefor
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subparagraph  (B)  of  paragraph  1 of subdivision (b) of
 section 483 of the tax law, as amended by chapter 1 of the laws of 1999,
 is amended to read as follows:
   (B) In the absence of the filing with the commissioner of satisfactory
 proof of a lesser cost of doing business of the agent making  the  sale,
 the  cost  of doing business by the agent shall be presumed to be seven-
 eighths of one percent of the basic cost  of  cigarettes  for  sales  to
 wholesale  dealers plus [one cent] NINE CENTS per package of [ten] ciga-
 rettes, [two cents per package of twenty cigarettes and in the case of a
 package containing more than twenty cigarettes, two cents  and  one-half
 of  a  cent  for  each  five  cigarettes in excess of twenty cigarettes]
 REGARDLESS OF THE NUMBER OF CIGARETTES CONTAINED IN  SUCH  PACKAGE,  one
 and  one-half percent of the basic cost of cigarettes for sales to chain
 stores plus [one cent] NINE CENTS per package of [ten] cigarettes,  [two
 cents  per  package  of  twenty  cigarettes and in the case of a package
 containing more than twenty cigarettes, two cents and one-half of a cent
 for each five cigarettes in excess of twenty cigarettes]  REGARDLESS  OF
 THE  NUMBER  OF  CIGARETTES  CONTAINED  IN  SUCH  PACKAGE, and three and
 seven-eighths percent of the basic cost of cigarettes  with  respect  to
 sales  to retail dealers plus [one cent] NINE CENTS per package of [ten]
 cigarettes, [two cents per package of twenty cigarettes and in the  case
 of  a package containing more than twenty cigarettes, two cents and one-
 half of a cent for each five cigarettes in excess of twenty  cigarettes]
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09355-01-9

 A. 5144                             2
 
 REGARDLESS OF THE NUMBER OF CIGARETTES IN SUCH PACKAGE and the foregoing
 cents  per  pack shall be included in the "cost of doing business by the
 agent" referred to in paragraphs two and three of this subdivision.
   §  2. Subdivision 1 of section 472 of the tax law, as amended by chap-
 ter 629 of the laws of 1996 and as further amended  by  section  104  of
 part A of chapter 62 of the laws of 2011, is amended to read as follows:
   1.  The  commissioner  shall  prescribe, prepare and furnish stamps of
 such denominations and quantities as may be necessary for the payment of
 the tax on cigarettes imposed by this article PLUS THE  PAYMENT  BY  THE
 AGENT  OF  A CONCURRENT EXPENSE ALLOWANCE FOR THE CIGARETTE TAX ENFORCE-
 MENT ACCOUNT ESTABLISHED PURSUANT TO SECTION  NINETY-SEVEN-SSSS  OF  THE
 STATE  FINANCE  LAW  OF  FOUR  CENTS  PER STAMP WHICH SHALL BE DEPOSITED
 PURSUANT TO SUBDIVISION (C) OF SECTION FOUR HUNDRED EIGHTY-TWO  OF  THIS
 ARTICLE,  and  may  from time to time and as often as he deems advisable
 provide for the issuance and exclusive use of stamps of a new design and
 forbid the use of stamps of any other design, in the manner and with the
 effect provided in section two hundred seventy-four of this chapter. The
 commissioner shall make provisions for the sale of such stamps  at  such
 places and at such times as he may deem necessary and may license agents
 for  such  purpose.  The commissioner may license dealers in cigarettes,
 who maintain separate warehousing facilities for the purpose of  receiv-
 ing  and distributing cigarettes and conducting their business, who have
 received commitments from at least  two  cigarette  manufacturers  whose
 aggregate  market  share is at least forty percent of the New York state
 cigarette market, and importers, exporters and  manufacturers  of  ciga-
 rettes,  and  other persons within or without the state as agents to buy
 or affix stamps to be used in paying the  tax  herein  imposed,  but  an
 agent  shall  at  all  times have the right to appoint the person in his
 employ who is to affix the stamps to any cigarettes  under  the  agent's
 control.  The  fee  for  filing  such application for an agent's license
 shall be one thousand five hundred dollars, unless  such  fee  has  been
 paid  during  the  preceding twelve months, in which case, the fee for a
 new license shall be one thousand dollars.  All  of  the  provisions  of
 section  four hundred eighty OF THIS ARTICLE relating to wholesale deal-
 ers' licenses,  including  the  procedure  for  suspension,  revocation,
 refusal  to  license and for hearings, except for paragraphs (c) and (g)
 of subdivision one of such  section,  shall  be  applicable  to  agents'
 licenses  applied  for  or  granted pursuant to this section, as if such
 provisions had been set forth  in  full  in  this  subdivision  and  had
 expressly  referred  to  the applicant for, or the holder of, an agent's
 license. Whenever the commissioner shall sell and deliver  to  any  such
 agent  any  such  stamps,  such  agent  shall  be entitled to receive as
 compensation for his services and expenses as such agent in  selling  or
 affixing  such stamps, and to retain out of the moneys to be paid by him
 for such stamps, a commission on the par value thereof. The commissioner
 is hereby authorized to prescribe a schedule of commissions, not exceed-
 ing five per centum, allowable to such agent  for  buying  and  affixing
 such  stamps. Such schedule shall be uniform with respect to the differ-
 ent types of stamps used, and may be on a graduated scale  with  respect
 to  the  number  of  stamps  purchased.  The  commissioner  may,  in his
 discretion, permit an agent to pay for such stamps  within  thirty  days
 after  the  date of purchase and may require any such agent to file with
 the department [of taxation and finance]  a  bond  issued  by  a  surety
 company  approved  by  the  superintendent  of  financial services as to
 solvency and responsibility and authorized to transact business  in  the
 state  or  other security acceptable to the commissioner, in such amount

 A. 5144                             3
 
 as the commissioner may fix, to secure the payment of any sums due  from
 such  agent  pursuant  to  this  article. If securities are deposited as
 security under this subdivision, such securities shall be  kept  in  the
 custody  of  the  commissioner and may be sold by the commissioner if it
 becomes necessary so to do in order to recover any sums  due  from  such
 agent  pursuant  to  this  article,  but no such sale shall be had until
 after such agent shall have had opportunity to litigate the validity  of
 any  tax if it elects so to do. Upon any such sale, the surplus, if any,
 above the sums due under this article shall be returned to such agent.
   § 3. Section 482 of the tax law, as amended by section 2 of part T  of
 chapter 61 of the laws of 2011, is amended to read as follows:
   § 482. Deposit and disposition of revenue. (a) All taxes, fees, inter-
 est  and  penalties collected or received by the commissioner under this
 article and article twenty-A of this  chapter  shall  be  deposited  and
 disposed  of  pursuant to the provisions of section one hundred seventy-
 one-a of this chapter.  (b)  From  the  taxes,  interest  and  penalties
 collected  or  received  by the commissioner under sections four hundred
 seventy-one and four hundred seventy-one-a of this article, effective on
 and  after  March  first,  two  thousand,  forty-nine   and   fifty-five
 hundredths, and effective on and after February first, two thousand two,
 forty-three  and  seventy  hundredths;  and  effective  on and after May
 first, two thousand  two,  sixty-four  and  fifty-five  hundredths;  and
 effective  on  and  after April first, two thousand three, sixty-one and
 twenty-two hundredths percent; and effective on and  after  June  third,
 two  thousand  eight,  seventy  and  sixty-three hundredths percent; and
 effective on and after July first, two thousand ten, seventy-six percent
 collected or received under those sections  must  be  deposited  to  the
 credit  of  the  tobacco  control  and  insurance initiatives pool to be
 established and distributed by the commissioner of health in  accordance
 with section twenty-eight hundred seven-v of the public health law.  (C)
 FROM  THE  AMOUNTS  RECEIVED PURSUANT TO SUBDIVISION ONE OF SECTION FOUR
 HUNDRED SEVENTY-TWO OF THIS ARTICLE, THE COMMISSIONER SHALL  DEPOSIT  IN
 THE  CIGARETTE  TAX  ENFORCEMENT ACCOUNT ESTABLISHED PURSUANT TO SECTION
 NINETY-SEVEN-SSSS OF THE STATE FINANCE LAW THE CONCURRENT EXPENSE ALLOW-
 ANCE FOR THE CIGARETTE TAX ENFORCEMENT FUND OF FOUR CENTS PER STAMP.
   § 4. The state finance law is amended by adding a new section  97-ssss
 to read as follows:
   §  97-SSSS.  CIGARETTE  TAX  ENFORCEMENT  ACCOUNT.  1. THERE IS HEREBY
 CREATED IN THE JOINT CUSTODY OF THE STATE COMPTROLLER  AND  THE  COMMIS-
 SIONER  OF  TAXATION AND FINANCE AN ACCOUNT OF THE MISCELLANEOUS SPECIAL
 REVENUE FUND TO BE KNOWN AS THE "CIGARETTE TAX ENFORCEMENT ACCOUNT".
   2. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE  CONTRARY,
 THE  STATE  COMPTROLLER IS HEREBY AUTHORIZED AND DIRECTED TO RECEIVE FOR
 DEPOSIT TO THE CREDIT OF THE CIGARETTE TAX  ENFORCEMENT  ACCOUNT  MONIES
 RECEIVED  FROM THE COMMISSIONER OF TAXATION AND FINANCE FROM THE CONCUR-
 RENT EXPENSE ALLOWANCE PAID PURSUANT TO SUBDIVISION ONE OF SECTION  FOUR
 HUNDRED SEVENTY-TWO OF THE TAX LAW, AND OTHER MONIES APPROPRIATED, CRED-
 ITED OR TRANSFERRED THERETO FROM ANY OTHER FUND OR SOURCE.
   3. THE PROCEEDS OF THE CIGARETTE TAX ENFORCEMENT ACCOUNT SHALL BE USED
 SOLELY  TO  ENFORCE THE COLLECTION OF THE CIGARETTE TAX, AS PROVIDED FOR
 IN ARTICLE TWENTY OF THE TAX LAW.
   § 5. There is hereby appropriated to the division of state police  the
 amount  of  six  million  dollars  ($6,000,000)  from  the cigarette tax
 enforcement account to support  cigarette  tax  enforcement  activities.
 This appropriation may be apportioned to either the patrol activities or
 criminal  investigation  activities  program  of  the  division of state

 A. 5144                             4
 
 police, may be transferred or suballocated to any other state agency  or
 public  authority for their costs associated with the enforcement of the
 cigarette tax, and may be used to contract with local enforcement  agen-
 cies for cigarette tax enforcement activities. No monies shall be avail-
 able from this appropriation absent a certificate of allocation from the
 director of the budget.
   §  6. This act shall take effect September 1, 2019, and shall apply in
 accordance with the applicable transitional provisions of sections  1106
 and 1217 of the tax law.