S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3646
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 11, 2019
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN  ACT to amend the tax law, in relation to collecting the tax on ciga-
   rettes; and to repeal section 471-e and subdivision 5 of section 480-a
   of such law relating thereto

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivisions  8,  9 and 11 of section 470 of the tax law,
 subdivision 8 as amended by section 1 of part K of  chapter  61  of  the
 laws of 2005, subdivisions 9 and 11 as amended by chapter 61 of the laws
 of  1989,  are  amended  and four new subdivisions 20, 21, 22 and 23 are
 added to read as follows:
   8. "Wholesale dealer." Any person, WHETHER LOCATED WITHIN  OR  OUTSIDE
 OF  THIS  STATE,  who (a) sells cigarettes or tobacco products to retail
 dealers or other persons for purposes of resale, or (b)  owns,  operates
 or  maintains  one or more cigarette or tobacco product vending machines
 in, at or upon premises owned or occupied by any other  person,  or  (c)
 sells  cigarettes or tobacco products to an Indian nation or tribe or to
 a reservation cigarette seller on a qualified reservation.    SUCH  TERM
 SHALL  NOT INCLUDE ANY CIGARETTE MANUFACTURER, EXPORT WAREHOUSE PROPRIE-
 TOR, OR IMPORTER WITH A VALID PERMIT UNDER 26 U.S.C.  §  5712,  IF  SUCH
 PERSON  SELLS  OR  DISTRIBUTES CIGARETTES IN THIS STATE ONLY TO LICENSED
 AGENTS, OR TO AN EXPORT WAREHOUSE  PROPRIETOR  OR  ANOTHER  MANUFACTURER
 WITH A VALID PERMIT UNDER 26 U.S.C. § 5712.
   9.  "Retail  dealer." Any person, WHETHER LOCATED WITHIN OR OUTSIDE OF
 THIS STATE, other than a wholesale dealer, engaged in selling cigarettes
 or tobacco products TO A CONSUMER IN THIS STATE.
   11. "Agent." Any [person] WHOLESALE DEALER licensed by the commission-
 er of taxation and finance to  purchase  and  affix  adhesive  or  meter
 stamps on packages of cigarettes under this article.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07490-01-9
              

 S. 3646                             2
 
   20.  "MANUFACTURER"  MEANS  ANY  PERSON  WHO MANUFACTURES, FABRICATES,
 ASSEMBLES, PROCESSES, OR LABELS A FINISHED CIGARETTE.
   21.  "IMPORTER"  MEANS  ANY PERSON WHO IMPORTS INTO THE UNITED STATES,
 EITHER DIRECTLY OR INDIRECTLY, A FINISHED CIGARETTE FOR SALE OR DISTRIB-
 UTION.
   22.  "STAMP"  OR  "STAMPS"  MEANS   THE   INDICIA,   INCLUDING   METER
 IMPRESSIONS,  REQUIRED TO BE PLACED ON A CIGARETTE PACKAGE THAT EVIDENCE
 PAYMENT OF THE TAX ON CIGARETTES UNDER SECTION FOUR HUNDRED  SEVENTY-ONE
 OF  THIS  ARTICLE,  OR THE INDICIA, INCLUDING METER IMPRESSIONS, USED TO
 INDICATE THAT THE CIGARETTES ARE INTENDED FOR A SALE OR DISTRIBUTION  IN
 THIS STATE THAT IS EXEMPT FROM STATE TAX UNDER PARAGRAPH (A) OF SUBDIVI-
 SION ONE OF SECTION FOUR HUNDRED SEVENTY-ONE-E OF THIS ARTICLE.
   23.  "LICENSED," WHEN USED WITH REFERENCE TO A MANUFACTURER, IMPORTER,
 AGENT, WHOLESALE DEALER OR RETAIL DEALER, MEANS ONLY THOSE  PERSONS  WHO
 HOLD  A  VALID  AND  CURRENT  LICENSE  ISSUED UNDER SECTION FOUR HUNDRED
 EIGHTY OF THIS ARTICLE FOR THE TYPE OF BUSINESS BEING ENGAGED  IN.  WHEN
 THE TERM "LICENSED" IS USED BEFORE A LIST OF ENTITIES, SUCH AS "LICENSED
 MANUFACTURER,  IMPORTER, AGENT OR DEALER," SUCH TERM SHALL APPLY TO EACH
 ENTITY IN SUCH LIST.
   § 2. Subdivisions 2 and 3 of section 471 of the tax law, subdivision 2
 as amended by section 2 of part D of chapter 134 of the laws of 2010 and
 subdivision 3 as amended by chapter 6 of the laws of 1961,  are  amended
 to read as follows:
   2. It is intended that the ultimate incidence of and liability for the
 tax shall be upon the consumer, and that any agent [or dealer] who shall
 pay the tax to the commissioner shall collect the tax from the purchaser
 or  consumer.  Except as [hereinafter] provided IN THIS SUBDIVISION, the
 tax shall be advanced and paid by the agent. The agent shall  be  liable
 for  the collection and payment of the tax on cigarettes imposed by this
 article and shall pay the tax to the commissioner by  purchasing,  under
 such  regulations  as he or she shall prescribe, adhesive stamps of such
 designs and denominations as he or she shall prescribe. The tax on ciga-
 rettes may also be paid by or through the use of  metering  machines  if
 the  commissioner  so  prescribes. Agents, located within or without the
 state, shall purchase  stamps  and  affix  such  stamps  in  the  manner
 prescribed  to  packages  of cigarettes to be sold within the state[, in
 which case any dealer subsequently receiving such  stamped  packages  of
 cigarettes  will  not  be  required to purchase and affix stamps on such
 packages of cigarettes]. All cigarettes sold by agents  and  wholesalers
 to  Indian nations or tribes or reservation cigarette sellers located on
 an Indian reservation must bear a tax stamp.
   3. The amount of taxes advanced and paid by the agent as [hereinabove]
 provided IN THIS SECTION shall be added to and collected as part of  the
 sales price of the cigarettes.
   §  3.  Section 471-a of the tax law, as amended by section 5 of part D
 of chapter 134 of the laws of 2010, is amended to read as follows:
   § 471-a. Use tax on cigarettes. There is hereby imposed and  shall  be
 paid  BY  ANY  CONSUMER a tax on all cigarettes used in the state by any
 [person] SUCH CONSUMER, except that no tax shall be imposed (1)  if  the
 tax  provided  in  section  four  hundred seventy-one of this article is
 paid, (2) on the use of cigarettes which are exempt from the tax imposed
 by said section, or (3) on the use of four hundred or  less  cigarettes,
 brought into the state on, or in the possession of, any [person] CONSUM-
 ER.  Such  tax  on  cigarettes  shall be at the rate of four dollars and
 thirty-five cents  for  each  twenty  cigarettes  or  fraction  thereof,
 provided,  however,  that  if a package of cigarettes contains more than

 S. 3646                             3
 
 twenty cigarettes, the rate of tax on the cigarettes in such package  in
 excess  of twenty shall be one dollar and eight and three-quarters cents
 for each five cigarettes or fraction thereof. Within  twenty-four  hours
 after  liability  for the tax accrues, each such [person] CONSUMER shall
 file with the commissioner a return in such form as the commissioner may
 prescribe together with a remittance of the tax shown to be due thereon.
 For purposes of this article, the word "use" means the exercise  of  any
 right  or  power  actual  or  constructive  and shall include but is not
 limited to the receipt, storage or any  keeping  or  retention  for  any
 length  of time, but shall not include possession for sale, AND THE WORD
 "CONSUMER" MEANS ANY PERSON WHO USES CIGARETTES  IN  THIS  STATE.    All
 other  provisions of this article if not inconsistent shall apply to the
 administration and enforcement of the tax imposed by this section in the
 same manner as if the language of said provisions had been  incorporated
 in  full into this section. BY FILING SUCH RETURN AND PAYING SUCH TAX, A
 CONSUMER SHALL NOT BE RELIEVED OF ANY CRIMINAL OR CIVIL  PENALTIES  THAT
 MAY  BE  APPLICABLE  UNDER  THIS ARTICLE OR ARTICLE THIRTY-SEVEN OF THIS
 CHAPTER.
   § 4. Section 471-e of the tax law is REPEALED and a new section  471-e
 is added to read as follows:
   §  471-E.  APPLICATION  OF TAX ON TRIBAL LANDS. 1. EXEMPTION FROM TAX.
 (A) CIGARETTES SOLD TO OR RECEIVED BY MEMBERS OF A FEDERALLY  RECOGNIZED
 INDIAN  TRIBE ON SUCH TRIBE'S INDIAN COUNTRY SHALL NOT BE SUBJECT TO TAX
 UNDER THIS ARTICLE.
   (B) CIGARETTES EXEMPT FROM TAX UNDER 26 U.S.C. §  5701  AND  THAT  ARE
 DISTRIBUTED  IN ACCORDANCE WITH FEDERAL REGULATIONS SHALL NOT BE SUBJECT
 TO TAX UNDER THIS ARTICLE.
   2. TAX RATE ON SALES TO NON-TRIBAL MEMBERS ON INDIAN COUNTRY. THE  TAX
 RATE  APPLICABLE TO CIGARETTES SOLD TO OR RECEIVED BY NON-TRIBAL MEMBERS
 ON INDIAN LANDS SHALL BE EQUAL TO THE STATE TAX RATE PROVIDED IN SECTION
 FOUR HUNDRED SEVENTY-ONE OF THIS ARTICLE MINUS ANY TRIBAL TAX  RATE,  IF
 THE  RESULTING  RATE IS A POSITIVE NUMBER AND SUCH RATE SHALL BE ZERO IF
 THE RESULTING RATE WOULD BE A NEGATIVE NUMBER. CIGARETTES TAXED PURSUANT
 TO THIS SUBDIVISION SHALL BEAR A TAX STAMP AS REQUIRED BY  SECTION  FOUR
 HUNDRED  SEVENTY-TWO  OF  THIS  ARTICLE  IN  AN  AMOUNT EQUAL TO THE TAX
 IMPOSED BY SECTION FOUR HUNDRED SEVENTY-ONE OF THIS  ARTICLE;  PROVIDED,
 THAT  THE  COMMISSIONER  SHALL  PERIODICALLY REBATE TO ANY INDIAN TRIBAL
 ENTITY THAT IS IN COMPLIANCE WITH THIS ARTICLE AN AMOUNT  EQUAL  TO  THE
 TRIBAL  TAX IMPOSED ON SALES UNDER THIS SUBDIVISION OR THE FACE VALUE OF
 THE TAX STAMPS AFFIXED TO CIGARETTES UNDER THIS  SUBDIVISION,  WHICHEVER
 AMOUNT IS LESS.
   §  5. 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, subdivisions 2 and
 3  are  renumbered subdivisions 3 and 4 and a new subdivision 2 is added
 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, OR FOR INDICATION THAT
 THE CIGARETTES ARE TAX-EXEMPT UNDER SECTION FOUR  HUNDRED  SEVENTY-ONE-E
 OF  THIS  ARTICLE,  and  may from time to time and as often as he OR SHE
 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  OR  SHE  may  deem

 S. 3646                             4
 
 necessary  and may license agents for such purpose. The commissioner may
 license WHOLESALE dealers in cigarettes, who maintain separate warehous-
 ing facilities for the purpose of receiving and distributing  cigarettes
 and conducting their business, AND 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 import-
 ers, exporters and manufacturers of cigarettes, and other persons within
 or without the state as] OR ARE THEMSELVES ALSO LICENSED AS  MANUFACTUR-
 ERS,  IMPORTERS  OR  agents  to  buy [or] AND affix stamps to be used in
 paying the tax [herein] imposed BY THIS ARTICLE. NO PERSON OTHER THAN  A
 LICENSED AGENT MAY PURCHASE OR AFFIX STAMPS AND AGENTS SHALL NOT SELL OR
 PROVIDE  SUCH STAMPS TO ANY OTHER AGENT OR PERSON, but an agent shall at
 all times have the right to appoint the person in his OR HER 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 dealers' licenses,  includ-
 ing the procedure for suspension, revocation, refusal to license and for
 hearings,  except for paragraphs (c) and [(g)] (F) 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 OR HER
 services and expenses as  such  agent  in  [selling  or]  affixing  such
 stamps,  and  to  retain  out of the moneys to be paid by him OR HER for
 such stamps, a commission on the par value thereof. The commissioner  is
 hereby  authorized to prescribe a schedule of commissions, not exceeding
 five per centum, allowable to such agent for buying  and  affixing  such
 stamps.  Such  schedule  shall  be uniform with respect to the different
 types of stamps used, and may be on a graduated scale  with  respect  to
 the  number  of  stamps  purchased.  The commissioner may, in his OR HER
 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
 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.
   2. STAMPS SHALL BE APPLIED BY A LICENSED  AGENT  TO  EACH  PACKAGE  OF
 CIGARETTES  SOLD  OR DISTRIBUTED WITHIN THIS STATE AS FOLLOWS: (A) A TAX
 STAMP SHALL BE APPLIED TO ALL CIGARETTE PACKAGES  CONTAINING  CIGARETTES
 SUBJECT TO STATE TAX UNDER THIS ARTICLE, INCLUDING TO CIGARETTES SUBJECT
 TO  REDUCED  STATE  TAX  UNDER  SUBDIVISION  TWO OF SECTION FOUR HUNDRED
 SEVENTY-ONE-E OF THIS ARTICLE.

 S. 3646                             5
 
   (B) EXCEPT AS PROVIDED IN PARAGRAPH (C) OF THIS SUBDIVISION, A TAX-EX-
 EMPT STAMP SHALL BE APPLIED TO ALL CIGARETTE PACKAGES INTENDED FOR  SALE
 OR  DISTRIBUTION  TO  CONSUMERS NOT SUBJECT TO STATE TAX UNDER PARAGRAPH
 (A) OF SUBDIVISION ONE OF SECTION FOUR  HUNDRED  SEVENTY-ONE-E  OF  THIS
 ARTICLE.
   (C) NO STAMP SHALL BE APPLIED TO ANY CIGARETTE PACKAGE EXEMPT FROM TAX
 UNDER  PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION FOUR HUNDRED SEVENTY-
 ONE-E OF THIS ARTICLE.
   § 6. Section 473 of the tax law, as amended by chapter 489 of the laws
 of 1940, is amended to read as follows:
   § 473. Affixation and cancellation of stamps; presumption. Each  agent
 [shall affix] within [the time hereinafter prescribed] TWENTY-ONE CALEN-
 DAR  DAYS  OF  RECEIPT OF ANY CIGARETTES, SHALL AFFIX to each package of
 SUCH cigarettes, stamps evidencing the payment of  the  tax  imposed  by
 this  article OR STAMPS EVIDENCING THE EXEMPTION FROM PAYMENT OF THE TAX
 IMPOSED BY THIS ARTICLE and shall cancel  such  stamps,  WITH  A  NUMBER
 UNIQUE  TO  SUCH AGENT THAT IS LEGIBLE AT THE POINT OF SALE, before such
 cigarettes are offered for sale or before they  are  otherwise  disposed
 of,  unless  stamps have been affixed to such packages of cigarettes and
 cancelled before such agent received them. Each dealer,  other  than  an
 agent,  shall  immediately  upon the receipt of any cigarettes at his OR
 HER place of business mark in ink on each unopened box, carton or  other
 container  of  such  cigarettes the word "received" and the year, month,
 day and hour of such receipt, and shall affix his OR HER signature ther-
 eto, or in any other manner prescribed.
   Each retail dealer shall open such  box,  carton  or  other  container
 within  twenty-four  hours  after such receipt and prior to exposing for
 sale or selling such cigarettes and examine the packages contained ther-
 ein for the purpose of ascertaining whether or  not  the  said  packages
 have  affixed  thereto  the proper tax stamp; if unstamped or improperly
 stamped packages of cigarettes are discovered, the retail  dealer  shall
 immediately  notify  the WHOLESALE dealer from whom said cigarettes were
 purchased.  Upon such notification, the WHOLESALE dealer from whom  said
 cigarettes  were  purchased  will  replace  such unstamped or improperly
 stamped packages of cigarettes with those upon which  stamps  have  been
 properly affixed.
   Whenever  any  cigarettes  are  found in the place of business of such
 dealer, other than an agent, without the stamps affixed  and  cancelled,
 or  not  marked as having been received within the preceding twenty-four
 hours, the presumption shall be that such cigarettes are kept therein in
 violation of the provisions of this article. Stamps shall be affixed  to
 each  package  of  cigarettes of an aggregate denomination not less than
 the amount of the tax upon the contents therein, and shall be affixed in
 such manner as to be visible to the purchaser.
   § 7. The tax law is amended by adding a new section 473-c to  read  as
 follows:
   §  473-C.  DUTIES OF MANUFACTURERS, IMPORTERS, AGENTS, AND DEALERS. 1.
 AGENTS MAY APPLY STAMPS  ONLY  TO  CIGARETTE  PACKAGES  THAT  THEY  HAVE
 RECEIVED  DIRECTLY  FROM  A  LICENSED  MANUFACTURER OR IMPORTER OF CIGA-
 RETTES.
   2. AGENTS SHALL BE PERMITTED TO  SET  ASIDE,  WITHOUT  APPLICATION  OF
 STAMPS,  ONLY SUCH PART OF THE AGENT'S STOCK THAT IS IDENTIFIED FOR SALE
 OR DISTRIBUTION OUTSIDE OF THIS STATE; PROVIDED, THAT ANY SUCH UNSTAMPED
 CIGARETTES SHALL BE STORED SEPARATELY FROM STAMPED  CIGARETTE  PACKAGES.
 NO AGENT SHALL TRANSFER UNSTAMPED CIGARETTE PACKAGES TO ANOTHER FACILITY
 OF THE AGENT WITHIN THIS STATE OR TO ANOTHER PERSON WITHIN THIS STATE.

 S. 3646                             6
 
   3.  A  MANUFACTURER OR IMPORTER MAY SELL OR DISTRIBUTE CIGARETTES TO A
 PERSON LOCATED OR DOING BUSINESS WITHIN THIS  STATE  (INCLUDING  ON  ANY
 TRIBAL  LANDS  LOCATED  WITHIN  THIS  STATE)  ONLY  IF  SUCH PERSON IS A
 LICENSED IMPORTER OR AGENT. AN IMPORTER MAY OBTAIN CIGARETTES ONLY  FROM
 A  LICENSED  MANUFACTURER.  AN  AGENT  MAY OBTAIN CIGARETTES ONLY FROM A
 LICENSED MANUFACTURER, IMPORTER OR AGENT. AN AGENT MAY SELL OR  DISTRIB-
 UTE  CIGARETTES  TO A PERSON LOCATED OR DOING BUSINESS WITHIN THIS STATE
 (INCLUDING ON ANY TRIBAL LANDS LOCATED WITHIN THIS STATE) ONLY  IF  SUCH
 PERSON  IS A LICENSED AGENT, WHOLESALE DEALER OR RETAIL DEALER. A RETAIL
 DEALER MAY OBTAIN CIGARETTES ONLY FROM A  LICENSED  AGENT  OR  WHOLESALE
 DEALER.
   4.  ANY  PERSON WHO IS DOING BUSINESS BOTH AS AN AGENT AND A WHOLESALE
 DEALER OR A RETAIL DEALER, SHALL MAINTAIN SEPARATE AREAS FOR STAMPED AND
 UNSTAMPED PRODUCT.
   5. (A) A RETAIL DEALER SHALL REPORT TO THE  COMMISSION  EACH  SALE  OR
 DISTRIBUTION OF MORE THAN ONE THOUSAND CIGARETTES TO ANY CONSUMER IN ANY
 SINGLE TRANSACTION. SUCH REPORT SHALL INCLUDE:
   (I) THE NAME, ADDRESS, DESTINATION (INCLUDING STREET ADDRESS), VEHICLE
 LICENSE NUMBER, DRIVER'S LICENSE NUMBER, SIGNATURE OF THE PERSON RECEIV-
 ING SUCH CIGARETTES, AND THE NAME OF THE PURCHASER;
   (II)  A  DECLARATION  OF THE SPECIFIC PURPOSE OF THE RECEIPT (PERSONAL
 USE, RESALE, OR DELIVERY TO ANOTHER); AND
   (III) A DECLARATION OF THE NAME AND ADDRESS OF THE RECIPIENT'S PRINCI-
 PAL IN ALL CASES WHEN THE RECIPIENT IS ACTING AS AN AGENT.
   (B) A RETAIL DEALER SHALL NOT KNOWINGLY SELL MORE  THAN  ONE  THOUSAND
 CIGARETTES  TO  ANY  PERSON IN ANY SERIES OF TRANSACTIONS IN ANY TWO-DAY
 PERIOD WITHOUT FILING A REPORT AS REQUIRED  BY  PARAGRAPH  (A)  OF  THIS
 SUBDIVISION.
   § 8. Subdivisions 1 and 4 of section 474 of the tax law, as amended by
 chapter 61 of the laws of 1989, are amended to read as follows:
   1. (A) Every person who shall possess or transport any unstamped ciga-
 rettes upon the public highways, roads or streets of the state, shall be
 required  to  have  in his OR HER actual possession invoices or delivery
 tickets for such cigarettes. Such invoices  or  delivery  tickets  shall
 show  the  name  and  address  of  the consignor or seller, the name and
 address of the consignee or purchaser,  the  quantity  [and  brands]  BY
 BRAND  STYLE  of the cigarettes transported, and the name and address of
 the person who has or shall assume the payment of the tax.  The  absence
 of  such invoices or delivery tickets shall be prima facie evidence that
 such person is a dealer in cigarettes in this state and subject  to  the
 provisions of this article.
   (B)  ANY PERSON WHO SHIPS UNSTAMPED CIGARETTE PACKAGES INTO THIS STATE
 OTHER THAN TO A LICENSED MANUFACTURER, IMPORTER  OR  AGENT  SHALL  FIRST
 FILE WITH THE COMMISSIONER NOTICE OF SUCH SHIPMENT. THIS PARAGRAPH SHALL
 NOT  APPLY  TO ANY COMMON OR CONTRACT CARRIER THAT IS TRANSPORTING CIGA-
 RETTES THROUGH THIS STATE TO ANOTHER LOCATION UNDER  A  PROPER  BILL  OF
 LADING  OR  FREIGHT  BILL,  WHICH  STATES  THE  QUANTITY BY BRAND STYLE,
 SOURCE, AND DESTINATION OF SUCH CIGARETTES.
   4. At the time of delivering cigarettes to any person each MANUFACTUR-
 ER, IMPORTER, agent or wholesale dealer, and at the time  of  delivering
 tobacco  products  to any person each distributor or wholesale dealer of
 tobacco products, shall make a true duplicate invoice showing  the  date
 of  delivery,  the number of packages BY BRAND STYLE and number of ciga-
 rettes contained therein, in each shipment of cigarettes delivered,  and
 the items and quantity and wholesale price of each item in each shipment
 of  tobacco  products  delivered,  and the name of the purchaser to whom

 S. 3646                             7

 delivery is made, and shall retain the same for a period of [three] FIVE
 years subject to the use and inspection of the commissioner [of taxation
 and finance]. Each dealer shall procure and retain invoices showing  the
 number  of  packages  BY  BRAND STYLE and number of cigarettes contained
 therein, in each shipment of cigarettes received by him OR HER, and  the
 items  and quantity and wholesale price of each item in each shipment of
 tobacco products received by him OR HER, the date thereof, and the  name
 of  the  shipper, and shall retain the same for a period of [three] FIVE
 years subject to the use and inspection of the commissioner [of taxation
 and finance]. The commissioner [of taxation and finance]  by  regulation
 may  provide  that  whenever  cigarettes or tobacco products are shipped
 into the state, the railroad company, express company, trucking  company
 or  other  public  carrier  transporting any shipment thereof shall file
 with the commissioner [of taxation and finance] a copy  of  the  freight
 bill  within  ten days after the delivery in the state of each shipment.
 All dealers shall maintain and keep for a period of [three]  FIVE  years
 such  other  records of cigarettes or tobacco products received, sold or
 delivered within the state as may be required by  the  commissioner  [of
 taxation  and  finance].  The  commissioner [of taxation and finance] is
 hereby authorized to examine  the  books,  papers,  invoices  and  other
 records  of  any  person  WHO HOLDS A LICENSE OR REGISTRATION UNDER THIS
 ARTICLE OR WHO IS in possession, control or occupancy  of  any  premises
 where cigarettes or tobacco products are placed, stored, sold or offered
 for  sale, and the equipment of any such person pertaining to the stamp-
 ing of cigarettes or the sale and  delivery  of  cigarettes  or  tobacco
 products  taxable under this article, as well as the stock of cigarettes
 or tobacco products in any such premises or vehicle. To verify the accu-
 racy of the tax imposed and assessed by this article, each  such  person
 is hereby directed and required to give to the commissioner [of taxation
 and  finance]  or his OR HER duly authorized representatives, the means,
 facilities  and  opportunity  for  such  examinations  as  are  [herein]
 provided  for IN THIS SECTION and required.  ALL INVOICES REQUIRED TO BE
 RETAINED BY THIS SECTION SHALL SHOW THE NAME AND ADDRESS OF  THE  SELLER
 AND THE QUANTITY BY BRAND STYLE OF THE CIGARETTES INVOLVED IN THE TRANS-
 ACTION  AND  SHALL  BE  ITEMIZED  FOR EACH FACILITY OF THE MANUFACTURER,
 IMPORTER, AGENT OR WHOLESALE DEALER.  RECORDS REQUIRED UNDER THIS  ARTI-
 CLE SHALL BE PRESERVED ON THE PREMISES DESCRIBED IN THE RELEVANT LICENSE
 OR REGISTRATION IN SUCH A MANNER AS TO ENSURE PERMANENCY AND ACCESSIBIL-
 ITY  FOR  INSPECTION  AT REASONABLE HOURS BY AUTHORIZED PERSONNEL OF THE
 TAX COMMISSION. WITH THE PERMISSION OF THE  COMMISSIONER,  PERSONS  WITH
 MULTIPLE  PLACES  OF  BUSINESS MAY RETAIN CENTRALIZED RECORDS, BUT SHALL
 TRANSMIT DUPLICATES OF THE INVOICES OR THE EQUIVALENT  DOCUMENTATION  TO
 EACH  PLACE OF BUSINESS WITHIN TWENTY-FOUR HOURS UPON THE REQUEST OF THE
 COMMISSIONER.
   THE COMMISSIONER AND HIS OR HER DESIGNEES AND THE UNITED STATES SECRE-
 TARY OF THE TREASURY OR HIS OR HER DESIGNEE, UPON  REQUEST,  SHALL  HAVE
 ACCESS TO RECORDS REQUIRED UNDER THIS SECTION AND REPORTS REQUIRED UNDER
 SECTION FOUR HUNDRED SEVENTY-FOUR-A OF THIS ARTICLE. THE COMMISSIONER AT
 HIS OR HER SOLE DISCRETION MAY SHARE THE RECORDS AND REPORTS REQUIRED BY
 THIS ARTICLE WITH OTHER LAW ENFORCEMENT OFFICIALS OF THE FEDERAL GOVERN-
 MENT  OR  OTHER  STATES. PUBLIC ACCESS TO REPORTS SUBMITTED BY LICENSEES
 SHALL BE PROVIDED UNDER THE PROCEDURES ESTABLISHED BY THE NEW YORK FREE-
 DOM OF INFORMATION LAW. IN NO CASE,  HOWEVER,  SHALL  INFORMATION  ABOUT
 QUANTITIES OF CIGARETTES BY BRAND STYLE BE RELEASED TO ANYONE OTHER THAN
 THE  COMMISSIONER, THE UNITED STATES SECRETARY OF THE TREASURY, OR OTHER

 S. 3646                             8
 
 STATE AND FEDERAL LAW ENFORCEMENT OFFICIALS WITH WHOM  THE  COMMISSIONER
 HAS ELECTED TO SHARE REPORTS AND RECORDS REQUIRED BY THIS ARTICLE.
   §  9.  The tax law is amended by adding a new section 474-a to read as
 follows:
   § 474-A. REPORTS. 1. AGENTS AND DEALERS SHALL SUBMIT  TO  THE  COMMIS-
 SIONER MONTHLY REPORTS SETTING FORTH THE FOLLOWING INFORMATION, ITEMIZED
 OR  SUBMITTED  SEPARATELY  FOR EACH OF THEIR PLACES OF BUSINESS: (A) THE
 QUANTITIES OF CIGARETTES, BY BRAND STYLE, ON HAND BOTH AT THE  BEGINNING
 AND ENDING OF THE REPORTING PERIOD;
   (B) THE QUANTITIES OF CIGARETTES, BY BRAND STYLE AND TRANSACTION, THAT
 WERE  RECEIVED  DURING  THE REPORTING PERIOD AND THE NAME AND ADDRESS OF
 EACH PERSON FROM WHOM THOSE PRODUCTS WERE RECEIVED;
   (C) THE QUANTITIES OF CIGARETTES,  BY  BRAND  STYLE  AND  TRANSACTION,
 DISTRIBUTED  OR  SHIPPED  INTO  THIS  STATE OR BETWEEN LOCATIONS IN THIS
 STATE DURING THE REPORTING PERIOD (OTHER THAN SALES DIRECTLY TO  CONSUM-
 ERS) AND THE NAME AND ADDRESS OF EACH PERSON TO WHOM THOSE PRODUCTS WERE
 DISTRIBUTED OR SHIPPED;
   (D)  THE  QUANTITIES  OF  CIGARETTES,  BY BRAND STYLE AND TRANSACTION,
 DISTRIBUTED OR SHIPPED TO ANY DESTINATION  WHEREVER  LOCATED,  INCLUDING
 THE  QUANTITIES REPORTED UNDER PARAGRAPH (C) OF THIS SUBDIVISION, DURING
 THE REPORTING PERIOD (OTHER THAN SALES DIRECTLY TO  CONSUMERS)  AND  THE
 NAME  AND ADDRESS OF EACH PERSON TO WHOM THOSE PRODUCTS WERE DISTRIBUTED
 OR SHIPPED; AND
   (E) THE QUANTITIES OF CIGARETTES, BY BRAND STYLE, SOLD  TO  CONSUMERS,
 ITEMIZED TO SHOW SALES TO CONSUMERS IN THIS STATE AND SALES TO CONSUMERS
 OUTSIDE OF THIS STATE.
   2. MANUFACTURERS AND IMPORTERS SHIPPING CIGARETTES INTO OR WITHIN THIS
 STATE  SHALL  FILE A MONTHLY REPORT WITH THE COMMISSIONER CONTAINING THE
 INFORMATION REGARDING SUCH CIGARETTES SET  FORTH  IN  PARAGRAPH  (C)  OF
 SUBDIVISION ONE OF THIS SECTION.
   3.  INDIAN  TRIBAL ENTITIES ENGAGED IN THE RETAIL SALE OR DISTRIBUTION
 OF CIGARETTES SHALL INCLUDE IN SUCH ENTITIES' REPORTS SUBMITTED PURSUANT
 TO SUBDIVISION ONE OF THIS SECTION THE  NAMES  AND  ADDRESSES  OF  EVERY
 TRIBAL  MEMBER THAT PURCHASED CIGARETTES DURING THE REPORTING PERIOD AND
 THE QUANTITY OF CIGARETTES, BY  BRAND  STYLE,  PURCHASED  BY  EACH  SUCH
 TRIBAL MEMBER.
   4.  THE  REPORTS SUBMITTED PURSUANT TO SUBDIVISION ONE OF THIS SECTION
 SHALL BE FURTHER ITEMIZED TO DISCLOSE THE  QUANTITY  OF  REPORTED  CIGA-
 RETTES  BEARING  TAX  STAMPS  OF  THIS  STATE, TAX EXEMPT STAMPS OF THIS
 STATE, STAMPS OF ANOTHER STATE, AND UNSTAMPED CIGARETTES. AGENT  REPORTS
 SHALL  INCLUDE,  IF  APPLICABLE,  THE  QUANTITY  OF NEW YORK TAX AND TAX
 EXEMPT STAMPS THAT WERE NOT AFFIXED TO CIGARETTES AND THAT WERE ON  HAND
 AT  THE  BEGINNING  AND  ENDING OF THE REPORTING PERIOD, THE QUANTITY OF
 EACH TYPE OF NEW YORK STAMP RECEIVED DURING THE  REPORTING  PERIOD,  AND
 THE QUANTITY OF EACH TYPE OF NEW YORK STAMP APPLIED DURING THE REPORTING
 PERIOD.
   5.  THE  COMMISSIONER  MAY ISSUE REGULATIONS REQUIRING SUCH ADDITIONAL
 INFORMATION IN THE MONTHLY REPORTS AS HE OR SHE MAY DETERMINE IS  NECES-
 SARY  OR  APPROPRIATE  FOR  PURPOSES OF ENFORCING THE PROVISIONS OF THIS
 ARTICLE.
   § 10. Section 475 of the tax law is amended by adding  a  new  closing
 paragraph to read as follows:
   IN  ANY  CASE  WHERE  THE  COMMISSIONER  OR HIS OR HER DULY AUTHORIZED
 AGENT, OR ANY POLICE OR PEACE OFFICER OF NEW YORK STATE,  HAS  KNOWLEDGE
 OR  REASONABLE GROUNDS TO BELIEVE THAT ANY VEHICLE IS TRANSPORTING CIGA-
 RETTES IN VIOLATION OF THIS ARTICLE, THE COMMISSIONER,  SUCH  AGENT,  OR

 S. 3646                             9
 
 SUCH  POLICE OR PEACE OFFICER, IS AUTHORIZED TO STOP SUCH VEHICLE AND TO
 INSPECT THE SAME FOR CONTRABAND CIGARETTES.
   § 11. Section 476 of the tax law, as amended by chapter 61 of the laws
 of 1989, is amended to read as follows:
   §  476.  Refunds;  sales of stamps. Whenever any cigarettes upon which
 stamps have been placed or tobacco products upon which the tax has  been
 paid have been sold and shipped into another state for sale or use there
 or  have become unfit for use and consumption or unsalable, or have been
 destroyed (EXCEPT FOR CIGARETTES DESTROYED PURSUANT TO SECTION  EIGHTEEN
 HUNDRED  FORTY-SIX  OF  THIS  CHAPTER), or whenever the commissioner [of
 taxation and finance] shall have determined that any tax imposed by this
 article shall have been paid in error,  the  agent,  dealer  or  tobacco
 products  distributor, as the case may be, shall be entitled to a refund
 of the actual amount of tax so paid, provided  application  therefor  is
 filed  with  the commissioner [of taxation and finance] within two years
 after the stamps were affixed to such cigarettes or  the  tax  was  paid
 upon  such tobacco products, except if an agreement under the provisions
 of section four hundred seventy-eight OF  THIS  ARTICLE  (extending  the
 period  for determination of tax imposed by this article) is made within
 the two-year period for the filing of an application for refund provided
 for in this section, the period for filing  an  application  for  refund
 shall  not expire prior to six months after the expiration of the period
 within which a determination may be made pursuant to  the  agreement  or
 any  extension thereof. If the commissioner [of taxation and finance] is
 satisfied that any AGENT OR dealer is entitled to a  refund  he  OR  SHE
 shall  issue  to such [dealer] AGENT stamps of sufficient value to cover
 the refund of the tax on cigarettes or may,  subject  to  audit  by  the
 comptroller,  make  a  refund  of  the  tax  on cigarettes or on tobacco
 products TO SUCH AGENT. No person shall sell or offer for sale any stamp
 or stamps issued under this article except by written permission of  the
 commissioner  [of  taxation  and finance]. The commissioner [of taxation
 and finance] may redeem unused stamps  lawfully  in  possession  of  any
 [person] AGENT. The commissioner [of taxation and finance] may prescribe
 necessary rules and regulations concerning refunds, sales of stamps, and
 redemptions under the provisions of this article.
   §  12. Subdivisions 1, 5 and paragraph (a) of subdivision 6 of section
 480 of the tax law, subdivision 1 as amended by chapter 629 of the  laws
 of  1996,  paragraph  (c) of subdivision 1 as further amended by section
 104 of part A of chapter 62 of the laws of 2011, paragraph (k) of subdi-
 vision 1 as amended by chapter 262 of the laws of 2000, subdivision 5 as
 added by chapter 860 of the laws of 1987 and paragraph (a)  of  subdivi-
 sion  6  as  amended  by  chapter  576 of the laws of 1994, are amended,
 subdivision 3 is amended by adding a new paragraph (c) and a new  subdi-
 vision 7 is added to read as follows:
   1. General. (a) [On and after July first, nineteen hundred thirty-nine
 no]  NO  person  shall  be a MANUFACTURER, IMPORTER, AGENT, OR wholesale
 dealer unless he OR SHE has been granted and publicly displays in his OR
 HER place of business a license from the department FOR EACH SUCH ACTIV-
 ITY ENGAGED IN. EACH PLACE OF BUSINESS IN THIS STATE SHALL BE SEPARATELY
 LICENSED. IF THE APPLICANT DOES NOT HAVE A PLACE  OF  BUSINESS  IN  THIS
 STATE,  THE LICENSE SHALL BE ISSUED FOR SUCH APPLICANT'S PRINCIPAL PLACE
 OF BUSINESS, WHEREVER LOCATED.  Applications for licenses shall be  made
 on  forms  prescribed by the commissioner.  EACH APPLICATION SHALL STATE
 THE NAME AND ADDRESS OF THE APPLICANT; THE ADDRESS  OF  THE  APPLICANT'S
 PRINCIPAL  PLACE  OF  BUSINESS;  EACH PLACE OF BUSINESS WHERE THE APPLI-
 CANT'S BUSINESS WILL BE CONDUCTED  WITHIN  THIS  STATE;  AND  ANY  OTHER

 S. 3646                            10
 
 INFORMATION  SUCH  COMMISSIONER MAY REQUIRE. IF THE APPLICANT IS A FIRM,
 PARTNERSHIP, OR ASSOCIATION, THE APPLICATION SHALL STATE  THE  NAME  AND
 ADDRESS  OF  EACH OF ITS MEMBERS. IF THE APPLICANT IS A CORPORATION, THE
 APPLICATION  SHALL STATE THE NAME AND ADDRESS OF EACH OF ITS MEMBERS. IF
 THE APPLICANT IS A CORPORATION, THE APPLICATION SHALL STATE THE NAME AND
 ADDRESS OF EACH OF ITS OFFICERS AND THE NAME OF  ANY  PERSON  WHO  OWNS,
 DIRECTLY  OR  INDIRECTLY, IN THE AGGREGATE, MORE THAN TEN PERCENT OF THE
 OWNERSHIP INTERESTS IN THE CORPORATION.
   (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 THIS article  [twenty]  or  article
 twenty-A  of this chapter, or the regulations of the commissioner there-
 under.
   (d) [Each applicant shall file satisfactory proof that it  will  main-
 tain 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 sepa-
 rate, 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)] (E) Each applicant shall submit proof of United States  citizen-
 ship 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)] (F) 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)]  (G)  Except  as provided in subdivision four of this section, a
 license shall continue in effect [until revoked or suspended  for  cause
 or  surrendered] FOR SUCH LENGTH OF TIME AS DETERMINED BY REGULATIONS OF
 THE COMMISSIONER; IN NO CASE, HOWEVER, SHALL A LICENSE ISSUED UNDER THIS
 SECTION REMAIN IN EFFECT FOR A PERIOD LONGER THAN THREE YEARS.
   [(i)] (H) 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)] (I) The commissioner may for  cause  refuse  to  issue,  or  may
 suspend  or  revoke  [a wholesaler's] ANY license UNDER THIS SECTION, or
 may forbid a retail dealer to continue  selling  cigarettes  or  tobacco
 products  or may forbid a person required to be appointed as a distribu-
 tor of tobacco products who has not been so appointed from selling ciga-
 rettes or tobacco products, after an opportunity for  hearing  has  been
 afforded.  A  violation of any provision of this article or of any regu-
 lation issued under it shall be cause to SUSPEND  OR  REVOKE  A  LICENSE

 S. 3646                            11
 
 ISSUED UNDER THIS SECTION OR TO forbid a retail dealer to continue sell-
 ing cigarettes or tobacco products.
   [(k)] (J) 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 deal-
 er 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 arti-
 cle.
   [(l)] (K) Paragraphs (b), (c) and [(g)] (F) 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 ciga-
 rette or tobacco products vending machines in, at or upon premises owned
 or occupied by another person and  the  sale  of  tobacco  products  for
 resale.
   (C)  LICENSE  AVAILABILITY. NOTWITHSTANDING OTHER SUBDIVISIONS OF THIS
 SECTION, NO LICENSE SHALL BE  GRANTED,  MAINTAINED  OR  RENEWED  IF  THE
 APPLICANT OR ANY CONTROLLING PERSON:
   (I) OWES FIVE HUNDRED DOLLARS OR MORE IN DELINQUENT CIGARETTE TAXES;
   (II)  HAD  A  LICENSE UNDER THIS SECTION OR REGISTRATION UNDER SECTION
 FOUR HUNDRED EIGHTY-A OF THIS ARTICLE REVOKED BY THE COMMISSIONER WITHIN
 THE PAST TWO YEARS;
   (III) HAS BEEN CONVICTED OF A CRIME RELATING TO STOLEN OR  COUNTERFEIT
 CIGARETTES;
   (IV)  IS  A  CIGARETTE  MANUFACTURER OR IMPORTER THAT IS NEITHER (A) A
 PARTICIPATING MANUFACTURER (AS SUCH TERM IS DEFINED IN SECTION II(JJ) OF
 THE MASTER SETTLEMENT AGREEMENT)  AS  REQUIRED  IN  SUBDIVISION  ONE  OF
 SECTION  THIRTEEN  HUNDRED  NINETY-NINE-PP OF THE PUBLIC HEALTH LAW; NOR
 (B) IN FULL COMPLIANCE WITH SECTION FOUR HUNDRED EIGHTY-B OF THIS  ARTI-
 CLE  AND  SUBDIVISION  TWO OF SECTION THIRTEEN HUNDRED NINETY-NINE-PP OF
 THE PUBLIC HEALTH LAW;
   (V) HAS IMPORTED, OR CAUSED TO BE IMPORTED, INTO THE UNITED STATES ANY
 CIGARETTE IN VIOLATION OF 19 U.S.C. 1681A; OR
   (VI) HAS IMPORTED, OR CAUSED TO BE IMPORTED INTO THE UNITED STATES, OR
 MANUFACTURED FOR SALE OR DISTRIBUTION IN THE UNITED STATES ANY CIGARETTE
 THAT DOES NOT FULLY COMPLY  WITH  THE  FEDERAL  CIGARETTE  LABELING  AND
 ADVERTISING ACT (15 U.S.C. 1331, ET SEQ.).
   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] ANY PERSON 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, includ-
 ing,  but  not limited to, those provisions authorizing the [tax commis-
 sion] COMMISSIONER 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

 S. 3646                            12
 
 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, suspen-
 sion 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] COMMISSIONER 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]  UNDER  THIS  ARTICLE,  a notice of
 proposed refusal to license shall be issued promptly  after  application
 for  license  is  received  by the [tax commission] COMMISSIONER.   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] COMMIS-
 SIONER  shall  issue a notice of refusal to license or shall license the
 applicant. If the [tax commission] COMMISSIONER 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]  COMMISSIONER
 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] COMMISSIONER.
   (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  UNDER THIS ARTICLE or of a licensee under this arti-
 cle, or
   7. MAINTENANCE OF LIST OF LICENSEES. THE COMMISSIONER SHALL CREATE AND
 MAINTAIN A WEBSITE SETTING FORTH THE IDENTITY OF PERSONS  HOLDING  VALID
 AND  CURRENT  LICENSES  UNDER  THIS SECTION, ITEMIZED BY TYPE OF LICENSE
 POSSESSED, AND THE IDENTITY OF PERSONS HOLDING VALID AND CURRENT  REGIS-
 TRATIONS  UNDER SECTION FOUR HUNDRED EIGHTY-A OF THIS ARTICLE, AND SHALL
 UPDATE THE SITE NO LESS FREQUENTLY THAN ONCE PER MONTH.
   § 13. Paragraph (d) of subdivision 1, and paragraph (a) of subdivision
 4 of section 480-a of the tax law, paragraph (d)  of  subdivision  1  as
 added  by chapter 799 of the laws of 1992, and paragraph (a) of subdivi-
 sion 4 as added by chapter 629 of the laws of 1996, are amended to  read
 as follows:
   (d)  (i) The commissioner shall not register retail dealers OR VENDING
 MACHINES or such registration may  be  cancelled  or  suspended  by  the
 commissioner  upon  notification that the applicant or retail dealer, OR
 ANY COMBINATION OF PERSONS OWNING DIRECTLY OR INDIRECTLY, IN THE  AGGRE-
 GATE,  MORE THAN TEN PERCENT OF THE OWNERSHIP INTERESTS IN THE APPLICANT
 OR RETAIL DEALER has been  convicted  in  a  criminal  proceeding  of  a
 violation  of subdivision [five] THREE of section [260.20] 260.21 of the
 penal law or as directed by an enforcement officer pursuant  to  article
 thirteen-F  of  the  public  health  law.  The  clerk of the court shall
 promptly report all criminal convictions under subdivision [five]  THREE

 S. 3646                            13
 
 of section [260.20] 260.21 of the penal law to the commissioner, togeth-
 er  with  a direction to the commissioner to cancel such registration or
 to suspend it for a specified period of time.
   (II)  THE  COMMISSIONER  SHALL  NOT REGISTER RETAIL DEALERS OR VENDING
 MACHINES OR SUCH REGISTRATION SHALL BE CANCELLED  OR  SUSPENDED  BY  THE
 COMMISSIONER  UPON  NOTIFICATION THAT THE APPLICANT OR RETAIL DEALER, OR
 ANY COMBINATION OF PERSONS OWNING DIRECTLY OR INDIRECTLY, IN THE  AGGRE-
 GATE,  MORE THAN TEN PERCENT OF THE OWNERSHIP INTERESTS IN THE APPLICANT
 OR RETAIL DEALER:
   (A) OWES FIVE HUNDRED DOLLARS OR MORE IN DELINQUENT CIGARETTE TAXES;
   (B) HAD A REGISTRATION ISSUED UNDER THIS SECTION OR A  LICENSE  ISSUED
 UNDER SECTION FOUR HUNDRED EIGHTY OF THIS ARTICLE REVOKED BY THE COMMIS-
 SIONER WITHIN THE PAST TWO YEARS; OR
   (C) HAS BEEN CONVICTED OF A CRIME RELATING TO COUNTERFEIT CIGARETTES.
   Anything  to  the  contrary in any law notwithstanding, retail dealers
 shall have no right to a hearing under this chapter and  shall  have  no
 right  to  commence  a  court action or proceeding or to any other legal
 recourse against the commissioner with respect to any  action  taken  by
 the  commissioner under this paragraph, provided nothing herein shall be
 construed to deny retail dealers a hearing under article  thirteen-F  of
 the  public  health  law or to prohibit retail dealers from commencing a
 court action or proceeding against an enforcement officer as defined  in
 section thirteen hundred ninety-nine-aa of the public health law.
   [(ii)]  (III) Anything to the contrary in any law notwithstanding, the
 commissioner shall provide upon request to  an  enforcement  officer  as
 defined  in section thirteen hundred ninety-nine-aa of the public health
 law such registration information as is relevant and necessary  for  the
 implementation of article thirteen-F of the public health law.
   (a)  If  a  retail  dealer  possesses or sells unstamped or unlawfully
 stamped packages of cigarettes, [or if a retail dealer is also  licensed
 as  an  agent  pursuant  to  section  four  hundred  seventy-two  and it
 possesses unlawfully stamped packages of cigarettes or  sells  unstamped
 or  unlawfully stamped packages of cigarettes at retail,] (i) its regis-
 tration shall be suspended for a period of not more than six months,  or
 (ii) for a second such possession or sale within a period of five years,
 its  registration  shall  be  suspended for a period of up to thirty-six
 months, or (iii) for a third such possession or sale within a period  of
 five  years,  its registration may be revoked for a period of up to five
 years. A retail dealer registration shall be suspended or revoked pursu-
 ant to this subdivision immediately upon such dealer's receipt of  writ-
 ten  notice  of  suspension  or  revocation from the commissioner. [If a
 retail dealer sells cigarettes through more than one place  of  business
 in  this state, the retail dealer registration shall not be suspended or
 revoked pursuant to this subdivision, but the certificate  of  registra-
 tion  issued  to  the  place  of  business,  cart, stand, truck or other
 merchandising device where unstamped or  unlawfully  stamped  cigarettes
 were  found  shall  be  suspended or cancelled for possession or sale of
 unstamped or unlawfully stamped  packages  of  cigarettes,  as  if  such
 certificate of registration were a retail dealer registration. A suspen-
 sion  or  cancellation of a certificate of registration shall be treated
 as if it were a suspension or revocation of a registration. If unstamped
 or unlawfully stamped cigarettes are found in a  retail  dealer's  ware-
 house,  the]  THE suspension or revocation of the retail dealer's regis-
 tration pursuant to this subdivision shall be applicable to each  retail
 place  of  business in this state through which such retail dealer sells
 cigarettes. IF A RETAIL DEALER COMMITS ANY VIOLATION  OTHER  THAN  THOSE

 S. 3646                            14
 
 DESCRIBED  IN  THIS  SUBDIVISION OR SUBDIVISION ONE OF THIS SECTION, THE
 COMMISSIONER MAY SUSPEND OR REVOKE THE RETAIL DEALER'S REGISTRATION.
   § 14. Subdivision 5 of section 480-a of the tax law is REPEALED.
   § 15. Subparagraph (v) of paragraph (a) of subdivision 1 and paragraph
 (b)  of subdivision 2 of section 481 of the tax law, subparagraph (v) of
 paragraph (a) of subdivision 1 as amended by chapter 65 of the  laws  of
 1985  and paragraph (b) of subdivision 2 as amended by chapter 61 of the
 laws of 1989, are amended, subdivision 4 is renumbered subdivision 9 and
 five new subdivisions 4, 5, 6, 7 and 8 are added to read as follows:
   (v) The penalties and interest provided  for  in  this  paragraph,  IN
 ADDITION  TO  ANY OTHER PENALTY IMPOSED BY THIS ARTICLE, shall be deter-
 mined, assessed, collected and paid in the  same  manner  as  the  taxes
 imposed  by  this  article  and  shall  be  disposed of as [hereinafter]
 provided IN THIS SUBDIVISION with respect to  moneys  derived  from  the
 tax. Interest under this paragraph shall be compounded daily.
   (b) Nothing in this section shall apply to common or contract carriers
 or  warehousemen  while  engaged  in  lawfully transporting [or storing]
 tobacco products or unstamped  packages  of  cigarettes  as  merchandise
 THROUGH  THIS STATE TO ANOTHER LOCATION UNDER A PROPER BILL OF LADING OR
 FREIGHT BILL, OR STORING TOBACCO PRODUCTS  OR  UNSTAMPED  CIGARETTES  ON
 BEHALF OF A LICENSED AGENT, nor to any employee of such carrier or ware-
 houseman acting within the scope of his OR HER employment, nor to public
 officers  or  employees  in  the  performance  of  their official duties
 requiring possession or control of  tobacco  products  or  unstamped  or
 unlawfully  stamped  packages of cigarettes, nor to temporary incidental
 possession by employees  or  agents  of  persons  lawfully  entitled  to
 possession, nor to persons whose possession is for the purpose of aiding
 police officers in performing their duties.
   4. WHOEVER OMITS, NEGLECTS, OR REFUSES TO COMPLY WITH ANY DUTY IMPOSED
 UPON  HIM  OR HER BY THIS ARTICLE, OR TO DO, OR CAUSE TO BE DONE, ANY OF
 THE THINGS REQUIRED BY THIS ARTICLE, OR DOES ANYTHING PROHIBITED BY THIS
 ARTICLE, SHALL, IN ADDITION TO ANY OTHER PENALTY PROVIDED IN THIS  ARTI-
 CLE  OR  ARTICLE THIRTY-SEVEN OF THIS CHAPTER, BE LIABLE TO A PENALTY OF
 FIVE THOUSAND DOLLARS OR FIVE TIMES THE RETAIL VALUE OF  THE  CIGARETTES
 INVOLVED,  WHICHEVER IS GREATER, TO BE RECOVERED, WITH COSTS OF SUIT, IN
 A CIVIL ACTION.
   5. WHOEVER FAILS TO PAY ANY TAX IMPOSED BY THIS ARTICLE  AT  THE  TIME
 PRESCRIBED BY LAW OR REGULATIONS, SHALL, IN ADDITION TO ANY OTHER PENAL-
 TY  PROVIDED  IN  THIS ARTICLE, BE LIABLE TO A PENALTY OF FIVE TIMES THE
 TAX DUE BUT UNPAID.
   6. ALL CIGARETTES WHICH ARE HELD FOR SALE, DISTRIBUTION OR USE  WITHIN
 THE BORDERS OF THIS STATE IN VIOLATION OF THE REQUIREMENTS OF THIS ARTI-
 CLE SHALL BE FORFEITED TO THE STATE.
   7.  (A)  WHOEVER,  WITH  INTENT TO DEFRAUD THIS STATE, FAILS TO COMPLY
 WITH ANY REQUIREMENT OF THIS ARTICLE OR REGULATIONS PRESCRIBED  PURSUANT
 TO  THIS  ARTICLE SHALL, FOR EACH SUCH OFFENSE, IN ADDITION TO ANY OTHER
 PENALTY PROVIDED IN THIS ARTICLE OR ARTICLE THIRTY-SEVEN OF  THIS  CHAP-
 TER,  BE  FINED  TEN THOUSAND DOLLARS OR BE IMPRISONED FOR NOT MORE THAN
 FIVE YEARS, OR BOTH.
   (B) WHOEVER KNOWINGLY VIOLATES ANY PROVISION OF  THIS  ARTICLE  OR  OF
 REGULATIONS  PRESCRIBED  PURSUANT  TO  THIS ARTICLE SHALL, FOR EACH SUCH
 OFFENSE, IN ADDITION TO ANY OTHER PENALTY PROVIDED IN THIS  ARTICLE,  BE
 FINED NOT MORE THAN FIVE THOUSAND DOLLARS OR FIVE TIMES THE RETAIL VALUE
 OF THE CIGARETTES INVOLVED, WHICHEVER IS GREATER, OR IMPRISONED NOT MORE
 THAN ONE YEAR, OR BOTH.

 S. 3646                            15

   8.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE SALE OR POSSESSION
 FOR SALE OF COUNTERFEIT CIGARETTES BY A MANUFACTURER,  IMPORTER,  AGENT,
 OR DEALER SHALL RESULT IN THE SEIZURE OF THE PRODUCT AND RELATED MACHIN-
 ERY  BY  THE  COMMISSIONER  OR  ANY  LAW ENFORCEMENT AGENCY AND SHALL BE
 PUNISHABLE  AS  FOLLOWS:  (A) A FIRST VIOLATION WITH A TOTAL QUANTITY OF
 LESS THAN TWO CARTONS OF CIGARETTES SHALL BE PUNISHABLE BY A FINE OF ONE
 THOUSAND DOLLARS OR FIVE  TIMES  THE  RETAIL  VALUE  OF  THE  CIGARETTES
 INVOLVED,  WHICHEVER  IS  GREATER,  OR  IMPRISONMENT  NOT TO EXCEED FIVE
 YEARS, OR BOTH.
   (B) A SUBSEQUENT VIOLATION WITH A TOTAL  QUANTITY  OF  LESS  THAN  TWO
 CARTONS  OF  CIGARETTES  SHALL  BE PUNISHABLE BY A FINE OF FIVE THOUSAND
 DOLLARS OR FIVE TIMES THE  RETAIL  VALUE  OF  THE  CIGARETTES  INVOLVED,
 WHICHEVER IS GREATER, OR IMPRISONMENT NOT TO EXCEED FIVE YEARS, OR BOTH,
 AND  SHALL  ALSO  RESULT  IN  THE REVOCATION BY SUCH COMMISSIONER OF THE
 MANUFACTURER, IMPORTER, AGENT, OR DEALER LICENSE.
   (C) A FIRST VIOLATION WITH A TOTAL QUANTITY OF TWO  CARTONS  OF  CIGA-
 RETTES  OR MORE SHALL BE PUNISHABLE BY A FINE OF TWO THOUSAND DOLLARS OR
 FIVE TIMES THE RETAIL VALUE OF THE  CIGARETTES  INVOLVED,  WHICHEVER  IS
 GREATER, OR IMPRISONMENT NOT TO EXCEED FIVE YEARS, OR BOTH.
   (D)  A  SUBSEQUENT  VIOLATION  WITH A QUANTITY OF TWO CARTONS OF CIGA-
 RETTES OR MORE SHALL BE PUNISHABLE BY A FINE OF FIFTY  THOUSAND  DOLLARS
 OR  FIVE TIMES THE RETAIL VALUE OF THE CIGARETTES INVOLVED, WHICHEVER IS
 GREATER, OR IMPRISONMENT NOT TO EXCEED FIVE YEARS, OR  BOTH,  AND  SHALL
 ALSO  RESULT IN THE REVOCATION BY SUCH COMMISSIONER OF THE MANUFACTURER,
 IMPORTER, AGENT, OR DEALER LICENSE.
   FOR PURPOSES OF THIS SUBDIVISION, COUNTERFEIT CIGARETTES INCLUDE CIGA-
 RETTES THAT HAVE FALSE MANUFACTURING LABELS OR  PACKAGES  OF  CIGARETTES
 BEARING COUNTERFEIT TAX STAMPS. ANY COUNTERFEIT CIGARETTES SEIZED BY THE
 COMMISSIONER SHALL BE DESTROYED.
   §  16.  Subdivision  (a) of section 1846 of the tax law, as amended by
 chapter 556 of the laws of 2011, is amended to read as follows:
   (a) Whenever a police officer designated in section 1.20 of the crimi-
 nal procedure law or a peace officer designated in subdivision  four  of
 section  2.10 of such law, acting pursuant to his or her special duties,
 shall discover any cigarettes subject to tax provided by article  twenty
 of  this  chapter or by chapter thirteen of title eleven of the adminis-
 trative code of the city of New York, and upon which  the  tax  has  not
 been  paid or the stamps not affixed as required by such article or such
 chapter thirteen, OR ANY CIGARETTES OTHERWISE BEING POSSESSED OR HELD IN
 VIOLATION OF ARTICLE TWENTY OF THIS CHAPTER, they are hereby  authorized
 and empowered forthwith to seize and take possession of such cigarettes,
 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 commis-
 sioner.  Such  seized  cigarettes,  vending  machine  or receptacle, not
 including money contained in such vending machine or  receptacle,  shall
 be  forfeited  to  the  state. The commissioner may, within a reasonable
 time thereafter, upon publication of a notice  to  such  effect  for  at
 least  five  successive  days,  before  the  day of sale, in a newspaper
 published or circulated in the county where the seizure was  made,  sell
 such  forfeited  vending  machines or receptacles at public sale and pay
 the proceeds into the state treasury to the credit of the general  fund.
 Notwithstanding  any  other  provision of this section, the commissioner
 may enter into an agreement with any city of this state which is author-
 ized to impose a tax similar to that imposed by article twenty  of  this
 chapter  to  provide  for the disposition between the state and any such

 S. 3646                            16
 
 city of the proceeds from any such sale.   All cigarettes  forfeited  to
 the  state  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 enforce-
 ment  purposes. If the commissioner determines the cigarettes may not be
 used for law enforcement  purposes,  the  commissioner  must,  within  a
 reasonable  time  after the forfeiture of such cigarettes, upon publica-
 tion in the state  registry,  destroy  such  forfeited  cigarettes.  The
 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.
   § 17. Section 1814 of the tax law, as amended by section  28  of  sub-
 part I of part V-1 of chapter 57 of the laws of 2009, is amended to read
 as follows:
   §  1814. Cigarette and tobacco products tax.--(a) Any person who will-
 fully attempts in any manner to evade or defeat  the  taxes  imposed  by
 article  twenty  of  this chapter or payment thereof on (i) ten thousand
 cigarettes or more (ii) twenty-two thousand cigars  or  more,  or  (iii)
 four  hundred  forty  pounds  of  tobacco or more or has previously been
 convicted two or more times of a violation of  paragraph  [one]  (I)  of
 this subdivision shall be guilty of a class [E] D felony.
   (b)  Any person, other than an agent licensed by the commissioner, who
 possesses or transports for the purpose of sale any unstamped or  unlaw-
 fully  stamped  packages of cigarettes subject to tax imposed by section
 four hundred seventy-one of this chapter, or who  sells  or  offers  for
 sale unstamped or unlawfully stamped packages of cigarettes in violation
 of the provisions of article twenty of this chapter shall be guilty of a
 [misdemeanor] CLASS E FELONY.  Any person who violates the provisions of
 this  subdivision  after having previously been convicted of a violation
 of this subdivision within the preceding five years shall be guilty of a
 class [E] D felony.
   (c) (1) Any person, other than an agent licensed by the  commissioner,
 who  willfully possesses or transports for the purpose of sale ten thou-
 sand or more cigarettes subject to  the  tax  imposed  by  section  four
 hundred  seventy-one  of  this  chapter  in  any unstamped or unlawfully
 stamped packages or who willfully sells or offers for sale ten  thousand
 or  more  cigarettes  in any unstamped or unlawfully stamped packages in
 violation of article twenty of this chapter shall be guilty of  a  class
 [E] D felony.
   (2)  Any person, other than an agent licensed by the commissioner, who
 willfully possesses or transports for the purpose of sale  thirty  thou-
 sand  or  more  cigarettes  subject  to  the tax imposed by section four
 hundred seventy-one of this  chapter  in  any  unstamped  or  unlawfully
 stamped  packages or who willfully sells or offers for sale thirty thou-
 sand or more cigarettes in any unstamped or unlawfully stamped  packages
 in  violation  of  article  twenty  of this chapter shall be guilty of a
 class [D] C felony.
   (d) For the purposes of this section, the possession or transportation
 within this state by any person, other than an agent, at any one time of
 five thousand or more 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  section four hundred seventy-one of this chapter. With
 respect to such possession or transportation any provisions  of  article
 twenty  of  this  chapter providing for a time period during which a use

 S. 3646                            17
 
 tax imposed by such article 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  state  of  more  than  four hundred cigarettes in unstamped or
 unlawfully 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 article twenty of this chapter.
   (e) Nothing in this section shall apply to common or contract carriers
 or  warehousemen  while  engaged  in  lawfully transporting [or storing]
 TOBACCO PRODUCTS OR unstamped  packages  of  cigarettes  as  merchandise
 THROUGH  THIS STATE TO ANOTHER LOCATION UNDER A PROPER BILL OF LADING OR
 FREIGHT BILL, or [lawfully transporting or] storing tobacco products  OR
 UNSTAMPED  CIGARETTES ON BEHALF OF A LICENSED AGENT, nor to any employee
 of such carrier or warehouseman acting within the scope of  his  OR  HER
 employment,  nor  to  public officers or employees in the performance of
 their official duties requiring possession or control  of  unstamped  or
 unlawfully  stamped  packages  of cigarettes or possession or control of
 tobacco products, nor to temporary incidental possession by employees or
 agents of persons lawfully entitled to possession, nor to persons  whose
 possession  is  for  the purpose of aiding police officers in performing
 their duties.
   (f) Any willful act or omission, other than those described in section
 eighteen hundred one of this article or subdivision (a), (b), (c),  (d),
 (e),  (g), (h) or (i) of this section, by any person which constitutes a
 violation of any provision of  article  twenty  of  this  chapter  shall
 constitute a [misdemeanor] CLASS E FELONY.
   (g)  Any  person who falsely or fraudulently makes, alters or counter-
 feits any stamp prescribed by the [tax  commission]  COMMISSIONER  under
 the  provisions of article twenty of this chapter, or causes or procures
 to be falsely or fraudulently made, altered or  counterfeited  any  such
 stamp,  or  knowingly and willfully utters, purchases, passes or tenders
 as true any such false, altered or counterfeited stamp, or knowingly and
 willfully possesses any cigarettes in packages bearing any  such  false,
 altered  or  counterfeited stamp, and any person who knowingly and will-
 fully makes, causes to be made, purchases or  receives  any  device  for
 forging  or counterfeiting any stamp, prescribed by the [tax commission]
 COMMISSIONER under the provisions of article twenty of this chapter,  or
 who  knowingly  and willfully possesses any such device, shall be guilty
 of a class [E] D felony. For the purposes of this subdivision, the words
 "stamp prescribed by the [tax commission] COMMISSIONER" shall include  a
 stamp,  impression  or imprint made by a metering machine, the design of
 which has been approved by such [commission] COMMISSIONER.
   (h) (1) Any dealer, other than a distributor appointed by the  commis-
 sioner  [of  taxation and finance] under article twenty of this chapter,
 who shall knowingly transport or have in his OR HER custody,  possession
 or under his OR HER control more than ten pounds of tobacco or more than
 five  hundred  cigars  upon which the taxes imposed by article twenty of
 this chapter have not been assumed or paid by a distributor appointed by
 the commissioner of taxation and finance under article  twenty  of  this
 chapter,  or  other  person treated as a distributor pursuant to section
 four hundred seventy-one-d of this chapter, shall be guilty of a  misde-
 meanor punishable by a fine of not more than five thousand dollars or by
 a term of imprisonment not to exceed thirty days.
   (2)  Any person, other than a dealer or a distributor appointed by the
 commissioner under article twenty of this chapter, who  shall  knowingly
 transport  or have in his OR HER custody, possession or under his OR HER

 S. 3646                            18
 
 control more than fifteen pounds of tobacco or more than  seven  hundred
 fifty  cigars  upon  which  the  taxes imposed by article twenty of this
 chapter have not been assumed or paid by a distributor appointed by  the
 commissioner  under  article  twenty  of  this  chapter, or other person
 treated as a distributor pursuant to section four hundred  seventy-one-d
 of this chapter shall be guilty of a misdemeanor punishable by a fine of
 not  more than five thousand dollars or by a term of imprisonment not to
 exceed thirty days.
   (3) Any person, other than a distributor appointed by the commissioner
 under article twenty of this chapter, who shall knowingly  transport  or
 have in his OR HER custody, possession or under his OR HER control twen-
 ty-five  hundred  or more cigars or fifty or more pounds of tobacco upon
 which the taxes imposed by article twenty of this chapter have not  been
 assumed  or  paid  by  a distributor appointed by the commissioner under
 article twenty of this chapter, or other person treated as a distributor
 pursuant to section four hundred seventy-one-d of this chapter shall  be
 guilty of a misdemeanor. Provided further, that any person who has twice
 been convicted under this subdivision shall be guilty of a class E felo-
 ny  for  any  subsequent  violation  of  this section, regardless of the
 amount of tobacco products involved in such violation.
   (4) For purposes of this  subdivision,  such  person  shall  knowingly
 transport  or have in his OR HER custody, possession or under his OR HER
 control tobacco or cigars on which such taxes have not been  assumed  or
 paid  by  a  distributor appointed by the commissioner where such person
 has knowledge of the requirement of the tax  on  tobacco  products  and,
 where  to his OR HER knowledge, such taxes have not been assumed or paid
 on such tobacco products by a distributor appointed by the  commissioner
 [of taxation and finance].
   (i)  Any  person who falsely or fraudulently makes, alters or counter-
 feits  a  registration  certificate  or  sticker  required   under   the
 provisions  of  section four hundred eighty-a of this chapter, or causes
 or procures to be falsely or fraudulently made, altered or counterfeited
 any such registration certificate or sticker, or knowingly and willfully
 utters, purchases, passes or tenders as true any such false, altered  or
 counterfeited  registration  certificate  or sticker, and any person who
 knowingly and willfully makes, causes to be made, purchases or  receives
 any device for forging or counterfeiting any registration certificate or
 sticker  required under the provisions of such section, or who knowingly
 and willfully possesses any such device, shall be guilty of a  class  [B
 misdemeanor] E FELONY.
   § 18. Severability. If any provision of this act or the application of
 any  provision  of  this act to any person or circumstance is held to be
 invalid, the remainder of this act and the application of the provisions
 of this act to any other person or circumstance shall  not  be  affected
 thereby  and  shall continue to be enforced to the fullest extent possi-
 ble.
   § 19. This act shall take effect on the ninetieth day after  it  shall
 have become a law.