§ 480. License. 1. General. (a) On and after July first, nineteen
hundred thirty-nine no person shall be a wholesale dealer unless he has
been granted and publicly displays in his place of business a license
from the department. Applications for licenses shall be made on forms
prescribed by the commissioner.

(b) Applications shall be accompanied by proof of the applicant's
financial responsibility, including, but not limited to, satisfactory
proof of a minimum net worth of twenty-five thousand dollars if the
applicant is an individual, or net worth in the capitalization of the
business if the applicant is not an individual equal to a minimum of
twenty-five thousand dollars.

(c) Each applicant shall file with the department 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, in the face amount of ten thousand dollars, to secure payment
of any sums due for any violation of article twenty or article twenty-A
of this chapter, or the regulations of the commissioner thereunder.

(d) Each applicant shall file satisfactory proof that it will maintain
a secure separate warehousing facility for the purpose of receiving and
distributing cigarettes or tobacco products and conducting its wholesale
business. Such proof shall consist of a copy of a deed, or a copy of an
executed lease for a minimum period of two years, to a separate, secure
warehouse. If the applicant carries on another business in conjunction
with the warehouse facility, the other business shall also be
identified.

(e) Each applicant shall file satisfactory proof that it will provide
disability and workers' compensation insurance for its employees.

(f) Each applicant shall submit proof of United States citizenship or
eligibility to obtain employment within the United States if not a
citizen. If the applicant is not an individual, such proof shall be
submitted with respect to each controlling person of the applicant.

(g) The fee for the filing of an application for a license shall be
fifteen 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. Each application shall be accompanied by a
certified check for the required application fee.

(h) Except as provided in subdivision four of this section, a license
shall continue in effect until revoked or suspended for cause or
surrendered.

(i) A license shall not be assignable but an applicant who is
purchasing the business of a licensee shall file a copy of the contract
of sale and any related documents with its application.

(j) The commissioner may for cause refuse to issue, or may suspend or
revoke a wholesaler's license, or may forbid a retail dealer to continue
selling cigarettes or tobacco products or may forbid a person required
to be appointed as a distributor of tobacco products who has not been so
appointed from selling cigarettes or tobacco products, after an
opportunity for hearing has been afforded. A violation of any provision
of this article or of any regulation issued under it shall be cause to
forbid a retail dealer to continue selling cigarettes or tobacco
products.

(k) No agent shall sell cigarettes and no distributor shall sell
tobacco products to an unlicensed wholesale dealer, or to a wholesale
dealer whose license has been suspended or revoked, or to a retail
dealer who is not registered under section four hundred eighty-a of this
article, or whose registration has been suspended or revoked, and no
wholesale dealer shall sell cigarettes or tobacco products to a retail
dealer who is not registered under section four hundred eighty-a of this
article, or whose registration has been suspended or revoked, and no
retail dealer shall sell cigarettes or tobacco products unless such
dealer is registered under section four hundred eighty-a of this
article.

(l) Paragraphs (b), (c) and (g) of this subdivision shall not apply to
the filing of an application for a license as a wholesale dealer that is
based solely upon the ownership, operation or maintenance of one or more
cigarette or tobacco products vending machines in, at or upon premises
owned or occupied by another person, or that is based solely upon the
sale of tobacco products for resale, or that is based upon both the
ownership, operation or maintenance of one or more cigarette or tobacco
products vending machines in, at or upon premises owned or occupied by
another person and the sale of tobacco products for resale.

2. Refusal to license. The commissioner of taxation and finance may
refuse to license an applicant where such applicant files an application
under this section and in considering such application the commissioner
ascertains that:

(a) Any tax imposed under this chapter or under any related statute as
defined in section eighteen hundred of this chapter has been finally
determined to be due from such applicant or controlling person and such
tax has not been paid in full,

(b) Such applicant or any controlling person has been convicted of a
crime provided for in this chapter within the preceding five years,

(c) Such applicant or any controlling person was the controlling
person in another wholesale dealer at the time that:

(i) Any tax imposed under this chapter or any related statute as
defined in section eighteen hundred of this chapter was finally
determined to be due from such other wholesale dealer and such tax has
not been paid in full,

(ii) Such other wholesale dealer was convicted of a crime provided for
in this chapter within the preceding five years, or

(iii) The license of such other wholesale dealer was cancelled or
suspended pursuant to this section within the preceding five years,

(d) The license of such applicant has been cancelled or suspended
pursuant to this section within the preceding five years,

(e) Any controlling person of such applicant has committed any of the
acts specified in subdivision three of this section within the preceding
five years, or

(f) Such applicant or any controlling person has been finally
determined to have violated any of the provisions of this article or
article twenty-A of this chapter, or any rule or regulation adopted
pursuant to this article or article twenty-A of this chapter.

3. Cancellation or suspension of license.

(a) Acts of licensee. The license of any wholesale dealer may be
cancelled or suspended by the tax commission upon:

(i) Its failure to file or maintain in full force and effect a bond or
other security when required or when the amount thereof is increased,

(ii) Its failure to comply with any of the provisions of this article
or article twenty-A of this chapter or any rule or regulation adopted
pursuant to this article or article twenty-A of this chapter by the
department or the commissioner, provided, however, that any violation of
section four hundred seventy-three-b of this article shall result in
license cancellation,

(iii) Its knowingly aiding and abetting another person in violating
any of the provisions of this article or article twenty-A of this
chapter or any rule or regulation adopted pursuant to this article or
article twenty-A of this chapter by the department or the commissioner,
provided, however, that any violation of section four hundred
seventy-three-b of this article shall result in license cancellation.

(b) Acts of licensee or controlling person. A license may be cancelled
or suspended if the tax commission determines that a licensee or any
controlling person:

(i) Commits fraud or deceit in his or its operations as a wholesale
dealer or has committed fraud or deceit in procuring his or its license,

(ii) Has been convicted in a court of competent jurisdiction, either
within or without the state, of a felony, bearing on the licensee's
duties and obligations under this chapter,

(iii) Has impersonated any person represented to be a wholesale dealer
under this article but not in fact licensed under this section, or

(iv) Has knowingly aided and abetted the sale of cigarettes or tobacco
products by a person which such licensee or controlling person knows (A)
has not been licensed by the commissioner of taxation and finance and
(B) is a wholesale dealer pursuant to the terms of subdivision eight of
section four hundred seventy of this chapter.

4. If the commissioner of taxation and finance considers it necessary
for the proper administration of the cigarette tax or tobacco products
tax imposed by this article or the cigarette marketing standards
contained in article twenty-A of this chapter he may require every
person under this article who holds a license to file a new application
for a license in such form and at such time as the commissioner may
prescribe and to surrender such license. The commissioner may require
such filing and such surrender not more often than once every three
years. Upon the filing of such application with the proper fee and the
surrender of such license, the commissioner shall issue, within such
time as he may prescribe, a new license to each applicant.

5. Hearing procedure. (a) General. A notice of proposed cancellation
or suspension of a license or refusal to issue a license shall be given
to the wholesale dealer licensed pursuant to this article or to an
applicant applying for such license in the manner prescribed for a
notice of deficiency of tax and all the provisions applicable to a
notice of deficiency under article twenty-seven of this chapter,
including, but not limited to, those provisions authorizing the tax
commission to abate on its own motion, shall apply to a notice issued
pursuant to this subdivision, insofar as such provisions can be made
applicable to a notice authorized by this subdivision, with such
modifications as may be necessary in order to adapt the language of such
provisions to the notice authorized by this subdivision. Such notice of
proposed cancellation or suspension or of proposed refusal to license
must be given to such person within five years from the date of the act
or omission referred to in subdivision two or three of this section,
except that in the case of acts involving falsity or fraud, such notice
may be issued at any time. All of such notices shall contain a statement
advising the person to whom it is issued that the cancellation,
suspension or refusal to license may be challenged through a hearing
process and that the petition for such challenge must be filed with the
tax commission within ninety days after the giving of such notice. Where
a license is cancelled or suspended prior to a hearing, the cancellation
or suspension may be challenged through the hearing process provided the
petition for such challenge is filed within ninety days after the giving
of notice of such cancellation or suspension.

(b) Refusal to license. In the case of a person applying to be
licensed as a wholesale dealer, a notice of proposed refusal to license
shall be issued promptly after application for license is received by
the tax commission. Upon timely application therefor, a hearing shall be
scheduled, and within three months from such application for hearing
(determined with regard to any postponements of any scheduled hearing or
conference or other delay made at the request of the applicant) the tax
commission shall issue a notice of refusal to license or shall license
the applicant. If the tax commission fails to issue a notice of refusal
to license within such three month period (or such period as extended
pursuant to this paragraph), the tax commission shall license the
applicant immediately upon the conclusion of such period so long as the
applicant has filed a bond or other security as required by the tax
commission.

6. For purposes of this section, the term "controlling person" means
any person who is:

(a) An officer, director or partner or, in the case of a limited
liability company, a member or a person having with respect to such
limited liability company authority analogous to that of an officer or
director with respect to a corporation of an applicant for a wholesale
dealer's license or of a licensee under this article, or

(b) A shareholder, directly or indirectly owning more than ten percent
of the number of shares of stock of such applicant or licensee (where
such applicant or licensee is a corporation) entitling the holder
thereof to vote for the election of directors or trustees. For purposes
of this paragraph, where reference is made to ownership, directly or
indirectly, of more than ten percent of the shares of stock of the
applicant or another person entitling the holder thereof to vote for the
election of directors or trustees, in the case of an applicant or
another person which at the relevant time has four or fewer shareholders
holding shares entitling the holders thereof to vote for the election of
directors or trustees, twenty-five percent or more shall be substituted
as the applicable percentage in such references to ownership, directly
or indirectly, of voting stock.