2013 -- S 0622

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LC01993

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO CRIMINAL OFFENSES -- CHILDREN AND

RELATING TO TAXATION -- CIGARETTE TAX

     Introduced By: Senators Ruggerio, Ciccone, Lombardi, Jabour, and Ottiano

     Date Introduced: March 06, 2013

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 11-9-13, 11-9-13.4, 11-9-13.5, 11-9-13.6, 11-9-13.7, 11-9-13.8,

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11-9-13.10, 11-9-13.11, 11-9-13.13 and 11-9-13.15 of the General Laws in Chapter 11-9 entitled

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"Children" are hereby amended to read as follows:

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     11-9-13. Purchase, sale or delivery of tobacco products to persons under eighteen --

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Posting notice of law Purchase, sale or delivery of tobacco products, tobacco-derived

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products and vapor products to persons under eighteen -- Posting notice of law. -- (a) No

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person under eighteen (18) years of age shall purchase, nor shall any person sell, give or deliver

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to any person under eighteen (18) years of age, any tobacco in the form of cigarettes, bidi

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cigarettes, cigars, little cigars, flavored cigars known as "blunts" unflavored "blunts", flavored

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and unflavored blunt wraps, cigarette rolling papers of any size or composition, cigarillos, and

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tiparillos, pipe tobacco, chewing tobacco, or snuff. Any person, firm, or corporation that owns,

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manages, or operates a place of business in which tobacco products are sold, including sales

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through cigarette vending machines, shall post notice of this law conspicuously in the place of

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business in letters at least three-eighths of an inch ( 3/8") high or attempt to purchase; possess or

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attempt to possess; use or attempt to use any tobacco in the form of cigarettes, bidi cigarettes,

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cigars, little cigars, flavored cigars know as "blunts," unflavored "blunts," flavored and

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unflavored blunt wraps, cigarette rolling papers of any size or composition, cigarillos, and

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tiparillos, pipe tobacco, chewing tobacco, or snuff; tobacco-derived products or vapor products.

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Any person violating this subsection shall be required to perform up to thirty (30) hours of

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community service or shall be required to enter into a tobacco treatment program approved by

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any local substance abuse prevention task force, at the option of the minor charged with a

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violation of this subsection.

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     (b) No person shall sell, give or deliver to any person under eighteen (18) years of age,

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any tobacco in the form of cigarettes, bidi cigarettes, cigars, little cigars, flavored cigars known as

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"blunts," unflavored "blunts," flavored and unflavored blunt wraps, cigarette rolling papers of any

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size or composition, cigarillos, and tiparillos, pipe tobacco, chewing tobacco, or snuff; tobacco-

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derived products or vapor products.

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     (c) Any person, firm, or corporation that owns, manages or operates a place of business in

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which tobacco products, tobacco-derived products or vapor products are sold, including sales

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through cigarette vending machines, shall post notice of this law conspicuously in the place of

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business in letters at least three-eighths of an inch (3/8") high.

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     11-9-13.4. Definitions. -- As used in this chapter:

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      (1) "Bidi cigarette" means any product that (i) contains tobacco that is wrapped in

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temburni or tender leaf or that is wrapped in any other material identified by rules of the

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Department of Health that is similar in appearance or characteristics to the temburni or tender leaf

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and (ii) does not contain a smoke filtering device.

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      (2) "Court" means any appropriate district court of the state of Rhode Island.

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      (3) "Dealer" is synonymous with the term "retail tobacco products dealer".

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      (4) "Department of mental health, retardation and hospitals" means the state of Rhode

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Island mental health, retardation and hospitals department, its employees, agents or assigns.

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      (5) "Department of taxation" means the state of Rhode Island taxation division, its

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employees, agents, or assigns.

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      (6) "License" is synonymous with the term "retail tobacco products dealer license."

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      (7) "License holder" is synonymous with the term "retail tobacco products dealer."

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      (8) "Person" means any individual person, firm, association, or corporation licensed as a

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retail dealer to sell tobacco products, tobacco-derived products or vapor products within the state.

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      (9) "Retail tobacco products dealer" means the holder of a license to sell tobacco

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products, tobacco-derived products or vapor products at retail.

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      (10) "Retail tobacco products dealer license" means a license to sell tobacco products,

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tobacco-derived products or vapor products at retail as issued by the department of taxation.

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      (11) "Spitting tobacco" also means snuff, powdered tobacco, chewing tobacco, dipping

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tobacco, pouch tobacco or smokeless tobacco.

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      (12) "Tobacco product(s)" means any product containing tobacco, including bidi

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cigarettes, as defined in subdivision (1) of this section, which can be used for, but whose use is

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not limited to, smoking, sniffing, chewing or spitting of the product, but does not include any

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tobacco-derived products or vapor products.

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      (13) "Underage individual" or "underage individuals" means any child under the age of

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eighteen (18) years of age.

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      (14) "Little cigars" means and includes any roll, made wholly or in part of tobacco,

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irrespective of size or shape and irrespective of whether the tobacco is flavored, adulterated or

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mixed with any other ingredient, where such roll has a wrapper or cover made of tobacco

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wrapped in leaf tobacco or any substance containing tobacco paper or any other material, except

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where such wrapper is wholly or in greater part made of tobacco and such roll weighs over three

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(3) pounds per thousand (1,000).

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     (15) "Tobacco-derived product" means any non-combustible product derived from

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tobacco that contains nicotine and is intended for human consumption, whether chewed,

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absorbed, dissolved or ingested by any other means, but does not include a vapor product or any

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product regulated by the United States food and drug administration under chapter V of the food,

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drug and cosmetic act.

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     (16) "Vapor product" means any non-combustible tobacco-derived product containing

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nicotine, such as an electronic cigarette, that employs a mechanical heating element, battery or

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electronic circuit, regardless of shape or size, that can be used to heat a liquid nicotine solution

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contained in a vapor cartridge as well as any vapor cartridge containing liquid nicotine solution

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that can be used with or in a vapor product. "Vapor product" does not include any product

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regulated by the United States food and drug administration under chapter V of the food, drug

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and cosmetic act.

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     11-9-13.5. Responsibility for tobacco or health issues. -- The Rhode Island department

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of mental health, retardation and hospitals shall develop, monitor and aggressively enforce health

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rules and regulations pertaining to stopping the illegal sale of tobacco products, tobacco-derived

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products or vapor products to children.

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     11-9-13.6. Duties of the department of mental health, retardation and hospitals. --

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The department of mental health, retardation and hospitals shall:

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      (1) Coordinate and promote the enforcement of the provisions of this chapter and serve

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as the primary liaison from this department to other state or local agencies, departments, or

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divisions on issues pertaining to stopping children's access to tobacco, tobacco-derived products

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or vapor products.

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      (2) Provide retail tobacco products dealers signs concerning the prohibition of sales to

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children under eighteen (18) years of age. The signs, conforming to the requirements of this

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chapter, shall be sold at cost. This sign, or an exact duplicate of it made privately, shall be

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displayed in all locations where tobacco products, tobacco-derived products or vapor products are

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sold.

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      (3) Investigate concurrently with other state and local officials violations of this chapter.

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      (4) (i) Utilize unannounced statewide compliance checks of tobacco product, tobacco-

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derived products or vapor product sales including retail tobacco, tobacco-derived products or

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vapor product over-the-counter sales, mail order sales initiated via mail, facsimile, telephone or

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internet ordering or other types of electronic communications, and tobacco vending machine sales

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as part of investigating compliance with the provisions of this chapter. Underage individuals,

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acting as agents for the department of mental health, retardation and hospitals and with the

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written permission of a parent or guardian, may purchase, with impunity from prosecution,

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tobacco products, tobacco-derived products or vapor products for the purposes of law

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enforcement or government research involving monitoring compliance with this chapter,

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provided that the underage individuals are supervised by an adult law enforcement official. Any

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individual participating in an unannounced compliance check of over-the-counter or vending

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machine sales, must state his or her accurate age if asked by the sales representative of the retail

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establishment being checked.

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      (ii) In fulfilling the requirement of unannounced statewide compliance checks, the

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department of mental health, retardation and hospitals shall maintain complete records of the

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unannounced compliance checks, detailing, at least, the date of the compliance check, the name

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and address of the retail establishment checked or the mail order company, the results of the

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compliance check (saleo sale), whether the sale was made as an over-the-counter sale, a mail

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order purchase or a tobacco vending machine sale, and if a citation was issued for any violation

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found. The records shall be subject to public disclosure. Further, the department of mental health,

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retardation and hospitals shall report to the owner of each retail establishment checked or mail

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order company, the results of any compliance check (saleo sale) whether the sale was made as an

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over-the-counter sale, a mail order purchase or a tobacco vending machine sale, and if a citation

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was issued for any violation found.

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      (5) Seek enforcement, concurrently with other state and local officials, of the penalties as

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detailed in this chapter.

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      (6) Develop and disseminate community health education information and materials

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relating to this chapter.

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     11-9-13.7. Signs concerning sales to individuals under age eighteen (18). -- Signs

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provided by the department of mental health, retardation and hospitals, or an exact duplicate of it

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made privately, shall:

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     (1) Contain in red bold lettering a minimum of three-eighths ( 3/8") inch high on a white

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background the following wording:

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     THE SALE OF CIGARETTES, AND OTHER TOBACCO PRODUCTS, TOBACCO-

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DERIVED PRODUCTS OR VAPOR PRODUCTS TO PERSONS UNDER THE AGE OF 18 IS

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AGAINST RHODE ISLAND LAW (Section 11-9-13.8(1), Rhode Island Statutes) PHOTO ID

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FOR PROOF OF AGE IS REQUIRED FOR PURCHASE.

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     (2) Contain the phone number at the department of mental health, retardation and

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hospitals, where violations of sections 11-9-13.2 -- 11-9-13.19 can be reported, in addition to any

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other information required by the department of mental health, retardation and hospitals.

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     (3) Be displayed prominently for public view at each cash register, each tobacco vending

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machine, or any other place from which tobacco products, tobacco-derived products or vapor

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products are sold.

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     11-9-13.8. Prohibitions applicable to license holders and their employees and agents.

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-- A person that holds a license issued under chapter 20 of title 44, or an employee or agent of

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that person, is prohibited from selling, distributing or delivering a tobacco product, tobacco-

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derived products or vapor product:

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      (1) To any individual that is under eighteen (18) years of age; or

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      (2) In any form other than an original factory-wrapped package; or

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      (3) As a single cigarette sale (section 44-20-31), or as a sale of cigarettes by the

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individual piece, known as "loosies."

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     11-9-13.10. Prohibition on the distribution of free tobacco products Prohibition on

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the distribution of free tobacco products, tobacco-derived products or vapor products to

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minors. -- The distribution of free tobacco products, tobacco-derived products or vapor products

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or coupons or vouchers redeemable for free tobacco products, tobacco-derived products or vapor

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products to any person under eighteen (18) years of age shall be prohibited. Further, the

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distribution of free tobacco products or coupons or vouchers redeemable for free tobacco

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products shall be prohibited, regardless of the age of the person to whom the products, coupons,

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or vouchers are distributed, within five hundred (500) feet of any school. The attorney general

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shall bring an action for any violation of this section. Every separate free tobacco product,

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tobacco-derived products or vapor product or coupon or voucher redeemable for a free tobacco

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product, tobacco-derived products or vapor product in violation of this section shall constitute a

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separate offense subject to a fine of five hundred dollars ($500). The penalty shall be assessed

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against the business or individual responsible for initiating the Rhode Island distribution of the

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free tobacco products, tobacco-derived products or vapor products or coupons or vouchers

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redeemable for free tobacco products.

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     11-9-13.11. Prohibition on the sale or distribution of tobacco products through the

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mail conveyance of tobacco products through the mail to children under eighteen (18) --

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Proof of age of purchaser required -- General rule Prohibition on the sale or distribution of

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tobacco products, tobacco-derived products or vapor products through the mail conveyance

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of tobacco products through the mail to children under eighteen (18) -- Proof of age of

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purchaser required -- General rule. -- (a) The distribution, or sale or conveyance of tobacco

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products, tobacco-derived products or vapor products to children under the age of eighteen (18)

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via the United States Postal Service, or by any other public or private postal or package delivery

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service, shall be prohibited.

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      (b) Any person selling or distributing tobacco products in the form of cigars, pipe

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tobacco, chewing tobacco, or snuff, tobacco-derived products or vapor products directly to a

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consumer via the United States Postal Service, or by any other public or private postal or package

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delivery service, including orders placed by mail, telephone, facsimile, or internet, shall: (1)

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before distributing or selling the tobacco product, tobacco-derived products or vapor product

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through any of these means, receive both a copy of a valid form of government identification

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showing date of birth to verify the purchaser is age eighteen (18) years or over and an attestation

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from the purchaser certifying that the information on the government identification truly and

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correctly identifies the purchaser and the purchaser's current address, and (2) deliver the tobacco

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product, tobacco-derived products or vapor product to the address of the purchaser given on the

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valid form of government identification and by a postal or package delivery service method that

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either limits delivery to that purchaser and requires the purchaser to sign personally to receive the

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delivery or requires a signature of an adult at the purchaser's address to deliver the package.

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      (c) The attorney general shall bring an action for any violation of this chapter. Any

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distribution, or sale or conveyance of a tobacco product, tobacco-derived products or vapor

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product to a child under eighteen (18) years of age via the United States Postal Service, or by any

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other public or private postal or package delivery service, shall be subject to an action against the

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distributor, or seller or conveyor by the attorney general of the state of Rhode Island. A minimum

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fine of one thousand dollars ($1,000) shall be assessed against any distributor, or seller or

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conveyor convicted of distributing, or selling or conveying tobacco products, tobacco-derived

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products or vapor products via the United States postal service, or by any other public or private

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postal or package delivery service, for each delivery, or sale or conveyance of a tobacco product,

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tobacco-derived products or vapor product to a child under eighteen (18) years of age.

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      (d) For the purpose of this section, "distribution," "distributing," "selling" and "sale" do

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not include the acts of the United States Postal Service or other common carrier when engaged in

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the business of transporting and delivering packages for others or the acts of a person, whether

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compensated or not, who transports or delivers a package for another person without any reason

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to know of the package's contents.

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      (e) Any delivery sale of cigarettes shall be made pursuant to the provisions of chapter

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20.1 of title 44. The provisions of this section shall apply to each tobacco product, tobacco-

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derived products or vapor product listed in subsection (b) herein, but shall not apply to any

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delivery sale of cigarettes.

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     11-9-13.13. Nature and size of penalties. -- (a) Any person or individual that violates a

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requirement of section 11-9-13.6(2), display of specific signage, shall be subject to a fine in court

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of not less than thirty-five dollars ($35.00) nor more than five hundred dollars ($500) per civil

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violation.

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      (b) The license holder is responsible for all violations of this section that occur at the

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location for which the license is issued. Any license holder that violates the prohibition of section

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11-9-13.8(1) and/or (2) shall be subject to civil fines as follows:

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      (1) A fine of two hundred fifty dollars ($250) for the first violation within any thirty-six

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(36) month period;

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      (2) A fine of five hundred dollars ($500) for the second violation within any thirty-six

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(36) month period;

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      (3) A fine of one thousand dollars ($1,000) and a fourteen (14) day suspension of the

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license to sell tobacco products, tobacco-derived products or vapor products for the third violation

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within any thirty-six (36) month period;

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      (4) A fine of one thousand five hundred dollars ($1,500) and a ninety (90) day

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suspension of the license to sell tobacco products, tobacco-derived products or vapor products for

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each violation in excess of three (3).

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      (c) Any person that violates a prohibition of section 11-9-13.8(3), sale of single

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cigarettes; section 11-9-13.8(2), regarding factory-wrapped packs; shall be subject to a penalty of

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five hundred dollars ($500) for each violation.

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      (d) The department of taxation shall not issue a license to any individual, business, firm,

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association, or corporation the license of which has been revoked or suspended, to any

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corporation an officer of which has had his or her license revoked or suspended, or to any

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individual who is or has been an officer of a corporation the license of which has been revoked or

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suspended so long as such revocations or suspensions are in effect.

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      (e) The court shall suspend the imposition of a license suspension of the license secured

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from the Rhode Island tax administrator for violation of subdivisions (b)(3) and (b)(4) of this

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section if the court finds that the license holder has taken measures to prevent the sale of tobacco,

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tobacco-derived products or vapor products to minors and the license holder can demonstrate to

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the court that those measures have been taken and that employees have received training. No

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person shall sell tobacco products, tobacco-derived products or vapor products, at retail, without

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first being trained in the legal sale of tobacco products, tobacco-derived products or vapor

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products. Training shall teach employees what constitutes a tobacco product, tobacco-derived

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products or vapor products, legal age of purchase, acceptable identification, how to refuse a direct

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sale to a minor or secondary sale to an adult, and all applicable laws on tobacco sales and

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distribution of tobacco, tobacco-derived products or vapor products. Dealers shall maintain

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records indicating that the provisions of this section were reviewed with all employees who

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conduct or will conduct tobacco sales of tobacco, tobacco-derived products or vapor products.

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Each employee who sells or will sell tobacco products, tobacco-derived products or vapor

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products shall sign an acknowledgement form attesting that the provisions of this section were

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reviewed with him/her. Each form shall be maintained by the retailer for as long as the employee

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is so employed and for no less than one year after termination of employment. The measures to

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prevent the sale of tobacco, tobacco-derived products or vapor products to minors shall be

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defined by the department of mental health, retardation and hospitals in rules and regulations.

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     11-9-13.15. Penalty for operating without a dealer license. -- (a) Any individual or

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business who violates this chapter by selling or conveying a tobacco product without a retail

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tobacco products, tobacco-derived products or vapor products dealer license shall be cited for that

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violation and shall be required to appear in court for a hearing on the citation.

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      (b) Any individual or business cited for a violation under this section of this chapter

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shall:

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      (1) Either post a five hundred dollar ($500) bond with the court within ten (10) days of

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the citation; or

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      (2) Sign and accept the citation indicating a promise to appear in court.

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      (c) An individual or business who has accepted the citation may:

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      (1) Pay the five hundred dollar ($500) fine, either by mail or in person, within ten (10)

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days after receiving the citation; or

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      (2) If that individual or business has posted a bond, forfeit the bond by not appearing at

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the scheduled hearing. If the individual or business cited pays the five hundred dollar ($500) fine

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or forfeits the bond, that individual or business is deemed to have admitted the cited violation and

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to have waived the right to a hearing on the issue of commission on the violation.

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      (d) The court after a hearing on a citation shall make a determination as to whether a

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violation has been committed. If it is established that the violation did occur, the court shall

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impose a five hundred dollar ($500) fine, in addition to any court costs or other court fees.

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     SECTION 2. Section 11-9-13.14 of the General Laws in Chapter 11-9 entitled "Children"

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is hereby repealed.

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     11-9-13.14. Notification to the Department of Taxation of fines imposed. -- The court

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shall maintain records of any penalty, fine or suspension imposed under this chapter and notify

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within sixty (60) days the tax administrator of the penalty, fine or suspension imposed.

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     SECTION 3. Sections 44-20-1, 44-20-2, 44-20-3, 44-20-4.1 and 44-20-8 of the General

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Laws in Chapter 44-20 entitled "Cigarette Tax" are hereby amended to read as follows:

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     44-20-1. Definitions. -- Whenever used in this chapter, unless the context requires

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otherwise:

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      (1) "Administrator" means the tax administrator;

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      (2) "Cigarettes" means and includes any cigarettes suitable for smoking in cigarette

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form, and each sheet of cigarette rolling paper;

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      (3) "Dealer" means any person whether located within or outside of this state, who sells

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or distributes cigarettes, tobacco-derived products or vapor products to a consumer in this state;

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      (4) "Distributor" means any person:

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      (A) Whether located within or outside of this state, other than a dealer, who sells or

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distributes cigarettes within or into this state. Such term shall not include any cigarette

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manufacturer, export warehouse proprietor, or importer with a valid permit under 26 U.S.C.

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section 5712, if such person sells or distributes cigarettes in this state only to licensed distributors,

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or to an export warehouse proprietor or another manufacturer with a valid permit under 26 U.S.C.

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section 5712;

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      (B) Selling cigarettes directly to consumers in this state by means of at least twenty-five

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(25) cigarette vending machines;

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      (C) Engaged in this state in the business of manufacturing cigarettes or any person

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engaged in the business of selling cigarettes to dealers, or to other persons, for the purpose of

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resale only; provided, that seventy-five percent (75%) of all cigarettes sold by that person in this

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state are sold to dealers or other persons for resale and selling cigarettes directly to at least forty

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(40) dealers or other persons for resale; or

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      (D) Maintaining one or more regular places of business in this state for that purpose;

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provided, that seventy-five percent (75%) of the sold cigarettes are purchased directly from the

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manufacturer and selling cigarettes directly to at least forty (40) dealers or other persons for

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resale;

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      (5) "Importer" means any person who imports into the United States, either directly or

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indirectly, a finished cigarette for sale or distribution;

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      (6) "Licensed", when used with reference to a manufacturer, importer, distributor or

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dealer, means only those persons who hold a valid and current license issued under section 44-20-

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2 for the type of business being engaged in. When the term "licensed" is used before a list of

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entities, such as "licensed manufacturer, importer, wholesale dealer, or retailer dealer," such term

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shall be deemed to apply to each entity in such list;

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      (7) "Manufacturer" means any person who manufactures, fabricates, assembles,

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processes, or labels a finished cigarette;

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      (8) "Person" means any individual, including an employee or agent, firm, fiduciary,

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partnership, corporation, trust, or association, however formed;

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      (9) "Place of business" means and includes any place where cigarettes are sold or where

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cigarettes are stored or kept for the purpose of sale or consumption, including any vessel, vehicle,

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airplane, train, or vending machine;

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      (10) "Sale" or "sell" includes and applies to gifts, exchanges, and barter;

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      (11) "Stamp" means the impression, device, stamp, label, or print manufactured, printed,

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or made as prescribed by the administrator to be affixed to packages of cigarettes, as evidence of

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the payment of the tax provided by this chapter or to indicate that the cigarettes are intended for a

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sale or distribution in this state that is exempt from state tax under the provisions of state law; and

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also includes impressions made by metering machines authorized to be used under the provisions

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of this chapter.

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     (12) "Tobacco-derived product" means any non-combustible product derived from

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tobacco that contains nicotine and is intended for human consumption, whether chewed,

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absorbed, dissolved or ingested by any other means, but does not include a vapor product or any

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product regulated by the United States food and drug administration under chapter V of the food,

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drug and cosmetic act.

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     (13) "Tobacco product" means any product containing tobacco that can be used for, but

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whose use is not limited to, smoking, sniffing, chewing or spitting of the product, but does not

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include any tobacco-derived product or vapor product.

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     (14) "Vapor product" means any non-combustible tobacco-derived product containing

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nicotine, such as an electronic cigarette, that employs a mechanical heating element, battery or

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electronic circuit, regardless of shape or size, that can be used to heat a liquid nicotine solution

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contained in a vapor cartridge as well as any vapor cartridge containing liquid nicotine solution

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that can be used with or in a vapor product. "Vapor product" does not include any product

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regulated by the United States food and drug administration under chapter V of the food, drug

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and cosmetic act.

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     44-20-2. Importer, distributor, and dealer licenses required -- Licenses required. --

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Each person engaging in the business of selling cigarettes and/or any tobacco products, tobacco-

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derived products or vapor products in this state, including any distributor or dealer, shall secure a

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license from the administrator before engaging in that business, or continuing to engage in it. A

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separate application and license is required for each place of business operated by a distributor or

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dealer; provided, that an operator of vending machines for cigarette products is not required to

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obtain a distributor's license for each machine. If the applicant for a license does not have a place

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of business in this state, the license shall be issued for such applicant's principal place of business,

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wherever located. A licensee shall notify the administrator within thirty (30) days in the event that

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it changes its principal place of business. A separate license is required for each class of business

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if the applicant is engaged in more than one of the activities required to be licensed by this

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section. No person shall maintain or operate or cause to be operated a vending machine for

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cigarette products without procuring a dealer's license for each machine.

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     44-20-3. Penalties for unlicensed business. -- Any distributor or dealer who sells, offers

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for sale, or possesses with intent to sell, cigarettes and/or any tobacco products, tobacco-derived

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products or vapor products without a license as provided in section 44-20-2, shall be fined in

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accordance with the provisions of and the penalties contained in section 11-9-13.15.

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     44-20-4.1. License availability. -- (a) No license under this chapter may be granted,

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maintained or renewed if the applicant, or any combination of persons owning directly or

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indirectly any interests in the applicant:

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      (1) Owes five hundred dollars ($500) or more in delinquent cigarette taxes;

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      (2) Is delinquent in any tax filings for one month or more;

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      (3) Had a license under this chapter revoked by the administrator within the past two (2)

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years;

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      (4) Has been convicted of a crime relating to cigarettes stolen or counterfeit cigarettes;

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      (5) Is a cigarette manufacturer or importer that is neither: (i) a participating manufacturer

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as defined in subsection II (jj) of the "Master Settlement Agreement" as defined in section 23-71-

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2; nor (ii) in full compliance with chapter 20.2 of this title and section 23-71-3;

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      (6) Has imported, or caused to be imported, into the United States any cigarette in

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violation of 19 U.S.C. section 1681a; or

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      (7) Has imported, or caused to be imported into the United States, or manufactured for

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sale or distribution in the United States any cigarette that does not fully comply with the Federal

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Cigarette Labeling and Advertising Act (15 U.S.C. section 1331, et. seq).

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      (b) (1) No person shall apply for a new license or permit (as defined in section 44-19-1)

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or renewal of a license or permit, and no license or permit shall be issued or renewed for any

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person, unless all outstanding fines, fees or other charges relating to any license or permit held by

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that person have been paid.

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      (2) No license or permit shall be issued relating to a business at any specific location

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until all prior licenses or permits relating to that location have been officially terminated and all

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fines, fees or charges relating to the prior licenses have been paid or otherwise resolved or the

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administrator has found that the person applying for the new license or permit is not acting as an

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agent for the prior licensee or permit holder who is subject to any such related fines, fees or

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charges that are still due. Evidence of such agency status includes, but is not limited to, a direct

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familial relationship and/or an employment, contractual or other formal financial or business

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relationship with the prior licensee or permit holder.

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      (3) No person shall apply for a new license or permit pertaining to a specific location in

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order to evade payment of any fines, fees or other charges relating to a prior license or permit for

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that location.

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      (4) No new license or permit shall be issued for a business at a specific location for

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which a license or permit already has been issued unless there is a bona fide, good faith change in

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ownership of the business at that location.

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      (5) No license or permit shall be issued, renewed or maintained for any person, including

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the owners of the business being licensed or having applied and received a permit, that has been

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convicted of violating any criminal law relating to tobacco products, tobacco-derived products or

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vapor products, the payment of taxes or fraud or has been ordered to pay civil fines of more than

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twenty-five thousand dollars ($25,000) dollars for violations of any civil law relating to tobacco

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products, tobacco-derived products or vapor products, the payment of taxes or fraud.

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     44-20-8. Suspension or revocation of license. -- The tax administrator may suspend or

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revoke any license under this chapter for failure of the licensee to comply with any provision of

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this chapter or with any provision of any other law or ordinance relative to the sale of cigarettes,

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tobacco-derived products or vapor products; and the tax administrator may also suspend or

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revoke any license for failure of the licensee to comply with any provision of chapter 13 of title 6,

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and, for the purpose of determining whether the licensee is complying with any provision of

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chapter 13 of title 6, the tax administrator and his or her authorized agents are empowered, in

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addition to authority conferred by section 44-20-40, to examine the books, papers, and records of

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any licensee. The administrator shall revoke the license of any person who would be ineligible to

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obtain a new or renew a license by reason of any of the conditions for licensure provided in

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section 44-20-4.1. Any person aggrieved by the suspension or revocation may apply to the

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administrator for a hearing as provided in section 44-20-47, and may further appeal to the district

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court as provided in section 44-20-48.

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     SECTION 4. This act shall take effect upon passage.

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LC01993

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO CRIMINAL OFFENSES -- CHILDREN AND

RELATING TO TAXATION -- CIGARETTE TAX

***

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     This act would amend the criminal and tax laws on cigarettes and tobacco to include all

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tobacco-derived products and vapor products among those items that are subject to taxation and

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those items that are prohibited to persons under the age of eighteen (18).

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     This act would take effect upon passage.

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LC01993

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