An Act concerning the regulation of cigarette license holders and amending various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 202 of P.L.1948, c.65 (C.54:40A-4) is amended to read as follows:

202. a. All licenses shall be issued by the director, who shall make rules and regulations respecting applications therefor and issuance thereof.

b. The following individuals related to distributors, wholesale dealers, retail dealers operating more than nine cigarette vending machines, and retail dealers who sell cigarettes at retail at more than nine premises shall submit with applications for a license, fingerprints, which shall be processed through the Federal Bureau of Investigation and the New Jersey State Police, and such other information as the director may require:

(1) Individuals having any interest whatsoever in a proprietorship or company.

(2) Partners of a partnership, regardless of percentage.

(3) Joint venturers in a joint venture.

(4) Officers, directors, and all stockholders holding directly or indirectly a beneficial interest in more than 5% of the outstanding shares of a corporation.

(5) Employees receiving in excess of $30,000.00 per annum compensation whether as salary, commission, bonus or otherwise and persons who, in the judgment of the director are employed in a supervisory capacity or have the power to make or substantially affect discretionary business judgments of the applicant entity with regard to the cigarette business.

(6) Other persons who the director establishes have the ability to control the applicant entity through any means including but not limited to, contracts, loans, mortgages or pledges of securities where such control is inimical to the policies of this act because such person is a career offender or a member of a career offender cartel as defined in paragraph (2) of subsection e. of this section. Individuals licensed pursuant to the "Casino Control Act," P.L.1977, c.110 (C.5:12-1 et seq.) shall only be required to produce evidence of said licensure in satisfaction of the foregoing.

The provisions in this subsection as to wholesale dealers, retail dealers operating more than nine cigarette vending machines, and retail dealers who sell cigarettes at retail at more than nine premises do not apply to retail grocery stores and supermarkets primarily engaged in the self-service sale of foods and household supplies for off-premises consumption, to drug stores and pharmacies engaged in the retail sale of prescription drugs and patent medicines and which may carry a number of lines of related merchandise, or to restaurants, hotels and motels operated by national corporations with such premises in six or more states and primarily engaged in the sale of foods for retail consumption or in the rental of rooms for lodging.

c. (1) The director shall not issue any license under this act where he has reasonable cause to believe that anyone required to submit information under this act has willfully withheld information requested of him for the purpose of determining the eligibility of the applicant to receive a license or where the director has reasonable cause to believe that information submitted in the application is false and misleading and is not made in good faith.

(2) The director shall not issue a license under this act to a person that is a manufacturer or importer of cigarettes, tobacco products or processed tobacco if the manufacturer or importer does not possess a valid federal permit issued pursuant to section 5713 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.5713, that is not suspended or revoked.

d. The director shall not issue any license under this act where he has reasonable cause to believe that anyone required to be licensed or anyone required to submit information under this act, has been convicted of any offense in any jurisdiction which would be at the time of conviction a crime involving moral turpitude.

It is further provided that any applicant or person required to submit information who has a charge pending pursuant to any of the foregoing shall disclose that fact to the director. The director may then withhold action on new applications or, in the case of an application for the renewal of a license, issue a temporary license until there has been a disposition of the charge. The director shall have the discretion to waive the prohibition against licensure herein provided upon the presentation of proof that a period of not less than five years has elapsed since the last conviction or the expiration of any period of incarceration imposed with respect thereto.

e. The director shall not issue any license where the applicant or anyone required to submit information has been identified as a career offender or a member of a career offender cartel in such a manner as to create a reasonable belief that the association is of such a nature as to be inimical to the policies of this act or to the taxation, distribution, and sale of cigarettes within the State. The director may request the Attorney General for advice respecting whether a person is a "career offender" within the meaning of this subsection, or is a "contumacious defiant" within the meaning of subsection f. of this section.

As used in this subsection:

(1) "career offender" means any person whose behavior is pursued in an occupational manner or context for the purpose of economic gain, utilizing such methods as are deemed criminal violations of the public policy of this State; and (2) "career offender cartel" means any group of persons who operate together as career offenders.

f. The director shall not issue any license where the applicant or anyone required to submit information has been found to be contumaciously defiant before any legislative investigative body or other official investigative body of this State or of the United States when such body is engaged in the investigation of organized crime, official corruption or the cigarette industry itself.

g. Each such license shall lapse on March 31 of the period for which it is issued, and each such license shall be continued annually upon the conditions that the licensee shall have paid the required fee and complied with all the provisions of this act and the rules and regulations of the director made pursuant thereto.

h. For each license issued to a distributor there shall be paid to the director a fee of $350.00. If a distributor sells or intends to sell cigarettes at two or more places of business, whether established or temporary, a separate license shall be required for each place of business. Each license, or certificate, thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director. The director shall require each licensed distributor to file with him a bond in an amount not less than the average monthly value of the cigarette stamps used by the licensed distributor to guarantee the proper performance of his duties and the discharge of his liabilities under this act. The bond shall be executed by such licensed distributor as principal, and by a corporation approved by the director and duly authorized to engage in business as a surety company in the State of New Jersey, as surety. The bond shall run concurrently with the distributor's license.

For each license issued to a manufacturer, and for each continuance thereof, there shall be paid to the director a fee of $10.00.

For each license issued to a manufacturer's representative, and for each continuance thereof, there shall be paid to the director a fee of $5.00.

For each license issued to a wholesale dealer there shall be paid to the director a fee of $250.00. If a wholesale dealer sells or intends to sell cigarettes at 10 or more places of business, whether established or temporary, a separate license shall be required for each place of business. Each license, or certificate thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director.

For each license issued to a retail dealer and for each continuance thereof, excepting a retail dealer operating a cigarette vending machine, there shall be paid to the director a fee of $40 in 1996 and $50 in 1997 and each year thereafter through 2013, and $200 in 2014 and each year thereafter. For each license issued to a retail dealer operating a vending machine for the sale of cigarettes and for each continuance thereof, there shall be paid to the director a fee of $40 in 1996 and $50 in 1997 and each year thereafter through 2013, and $200 in 2014 and each year thereafter.

In addition to the license fee for each continuance of a license for a retail dealer, a retail dealer who has been subject to up to two license suspensions or revocations pursuant to subsection a. of section 203 of P.L.1948, c.65 (C.54:40A-5), shall pay to the director at the same time as the payment of, and in addition to the retail license fee, a license continuation surcharge, which shall be $1,000, if the retail dealer license has been subject to one suspension or renewal, and $3,000 if the retail dealer license has been subject to two suspensions or renewals. The amounts annually collected from license continuation surcharges shall be annually appropriated to the Department of the Treasury for the purpose of the costs of enforcing this act. A licensed retail dealer who shall have been subject to more than two license suspensions or revocations shall be prohibited from receiving a continuation of, or any new license, required under this act.

Of the amount of each license fee [of $40 and $50, respectively], $30 shall be credited in 1996 and $40 shall be credited in 1997 and each year thereafter to the special projects and development fund in the Department of Health and Senior Services established pursuant to section 7 of P.L.1966, c.36 (C.26:2F-7) for the purposes specified therein, and $5 shall be credited each year, beginning with 1996, to the division for administrative costs associated with the requirements established pursuant to subsection i. of this section and section 2 of P.L.1995, c.320 (C.26:3A2-20.1). The director shall determine and certify to the State Treasurer on a monthly basis the amount of revenues collected by the director which are to be credited to the special projects and development fund in the Department of Health.

If a retail dealer sells or intends to sell cigarettes at two or more places of business, whether established or temporary, or whether in the same building or not, a separate license shall be required for each place of business. Each vending machine for the sale of cigarettes shall be separately licensed and be deemed a separate place of business. Each license, or certificate thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director.

Any person licensed only as a distributor or as a manufacturer or as a manufacturer's representative or as a wholesale dealer or as a retail dealer shall not operate in any other capacity except under that for which he is licensed herein, unless the appropriate license or licenses therefor are first secured.

For each license issued to a consumer and for each continuance thereof there shall be paid to the director a fee of $1.00. Each license, or certificate thereof, or such other evidence of license as may be prescribed by the director, shall be so kept by the consumer as to be readily available for inspection.

No license shall be issued to any person except upon the payment of the full fee therefor, any statute or exemption to the contrary notwithstanding. No license shall be assignable or transferable, except as hereinafter provided, but in the case of death, bankruptcy, receivership, or incompetency of the licensee, or if for any other reason whatsoever the business of the licensee shall devolve upon another by operation of law, the director may, in his discretion, extend said license for a limited time to the executor, administrator, trustee, receiver, or person upon whom the same has devolved. A purchaser or assignee of a licensed wholesaler or licensed distributor, or any other person upon whom the business of a licensed wholesaler or licensed distributor shall devolve by operation of law, shall upon application to the director, be entitled to an assignment or transfer of the wholesale or distributor license for the balance of the existing license period upon payment of a transfer fee of $5.00 and subject to his qualification to be a licensed wholesaler or licensed distributor under the provisions of this act. The license issued for each vending machine for the sale of cigarettes may be transferred from machine to machine in the same ownership. No refund of the license fee shall be paid to any person upon the surrender or revocation of any license except a license fee paid or collected in error. But, upon payment of a $1.00 fee, there may be obtained (1) a duplicate license, or certificate thereof, in the event the original is lost, destroyed or defaced, and (2) an amended license, or certificate thereof, upon a change in the location of the place of business of any distributor or dealer.

i. The director shall require an applicant for a cigarette retail dealer license, including a license to operate a vending machine for the sale of cigarettes, to include on the application the address of the place of business where the cigarettes will be sold or the address where the vending machine will be located, as the case may be.

If the place of business or the vending machine is moved to a different address than that provided on the license application, the licensee shall notify the director within 30 days of the change of address.

(cf: P.L.2013, c.145, s.1)

2. Section 2 of P.L.1987, c.423 (C.54:40A-4.1) is amended to read as follows:

2. Notwithstanding any other provision of law to the contrary, a person to whom a license is issued pursuant to P.L.1948, c.65 (C.54:40A-1 et seq.) shall, as a condition of the license, conspicuously post a legible sign at the point of display of the tobacco products and at the point of sale. The sign, which also shall be posted conspicuously on any licensed cigarette vending machine, shall be at least six inches by three inches in bold letters at least one-quarter inch high and shall read as follows:

"A person who sells or offers to sell a tobacco product to a person under 19 years of age shall pay a penalty of up to $1,000, and may be subject to a license suspension or revocation for a first offense under this section, and shall be subject to a license suspension or revocation of 30 days for a second or subsequent offense under this section.

Proof of age may be required for purchase."

(cf: P.L.2005, c.384, s.6)

3. Section 1 of P.L.2004, c.96 (C.54:40A-4.2) is amended to read as follows:

1. a. A person shall not sell, offer for sale, give away or deliver single cigarettes, as defined in section 102 of P.L.1948, c.65 (C.54:40A-2) or cigarettes in packs of less than 20 cigarettes from a vending machine or in a retail establishment.

b. A person who owns a vending machine that dispenses, sells, offers for sale, gives away or delivers single cigarettes or cigarettes in packs of less than 20 cigarettes shall be fined not less than $100 or more than $500 for each day that the vending machine is determined to be in violation of subsection a. of this section.

c. A person, either acting directly or indirectly through an agent, who, at retail, sells or offers for sale, gives away, delivers or otherwise furnishes to a person a single cigarette or cigarettes in packs of less than 20 cigarettes shall be fined $250 for a first offense, and [$500] for a second or subsequent offense of this subsection shall be fined $500 and shall be subject to a license suspension or revocation of 30 days.

(cf: P.L.2004, c.96, s.1)

4. Section 203 of P.L.1948, c.65 (C.54:40A-5) is amended to read as follows:

203. The director may, upon notice [and after hearing,] served personally, or by mailing the same to the person for whom it is intended, addressed to such person at the address given in the last report filed by that person pursuant to the provisions of the State Uniform Tax Procedure Law, R.S.54:48-1 et seq., or of any State tax law, or if no report has been filed, then to such address as may be obtainable, immediately suspend or revoke the license or all licenses issued to any person under this act:

a. who violates any of the provisions of this act, including but not limited to forging or counterfeiting revenue stamps pursuant to section 606 of P.L.1948, c.65 (C.54:40A-29) or possession and transportation of unstamped cigarettes pursuant to section 609 of P.L.1948, c.65 (C.54:40A-32);

b. who the director determines has failed to pay any State tax on or before the day on which the tax is required to be paid; [or]

c. who, after being issued a license becomes disqualified for licensure pursuant to this act or of any rule or regulation of the director, made pursuant thereto [or] ;

d. if the licensee has ceased to act in the capacity for which the license was issued; or

e. for other good cause.

No person whose license has been suspended or revoked shall sell cigarettes or permit cigarettes to be sold during the period of such suspension or revocation on the premises occupied by him or upon other premises controlled by him or others or in any other manner or form whatever. Nor shall any disciplinary proceeding or action be barred or abated by the expiration, transfer, surrender, continuance, renewal or extension of any license issued under the provisions of this act. No licensed wholesale dealer or licensed distributor shall make a sale of cigarettes to a person whose license has been suspended or revoked pursuant to this act during that period of suspension or revocation.

A person aggrieved by action of the director pursuant to this section may, within 90 days after the giving of the notice, file a protest in writing and request a hearing pursuant to R.S.54:49-18. Notwithstanding any other provision of law or regulation to the contrary, no appeal of the director's action shall be filed except pursuant to the procedures set forth in R.S.54:49-18.

(cf: P.L.1979, c.481, s.2)

5. Section 605 of P.L.1948, c.65 (C.54:40A-28) is amended to read as follows:

605. Any person who sells cigarettes without the stamp or stamps required by this act being affixed thereto or cigarettes stamped in violation of subsection b. of section 405 of P.L.1948, c.65 (C.54:40A-15) shall be guilty of a crime of the third degree. A person convicted of a second or subsequent offense under this section shall be sentenced to a term of imprisonment.

(cf: P.L.2013, c.145, s.9)

6. Section 2 of P.L.1977, c.188 (C. 54:40A-28.1) is amended to read as follows:

2. Any person, other than a licensee permitted under this act to possess any unstamped cigarettes, who possesses 2,000 but fewer than 20,000 cigarettes without the stamp or stamps required by this act being affixed thereto or stamped in violation of subsection b. of section 405 shall be guilty of a crime of the fourth degree; and any such person who possesses 20,000 or more cigarettes without the stamp or stamps required by this act being affixed thereto or stamped in violation of subsection b. of section 405 of P.L.1948, c.65 (C.54:40A-15) shall be guilty of a crime of the third degree A person convicted of a second or subsequent offense under this section shall be sentenced to a term of imprisonment.

(cf: P.L.2013, c.145, s.10)

7. Section 606 of P.L.1948, c.65 (C.54:40A-29) is amended to read as follows:

606. Forging or counterfeiting revenue stamps

a. Any person who falsely or fraudulently makes, forges, alters, or counterfeits, or causes or procures to be falsely or fraudulently made, forged, altered, or counterfeited, any stamps prepared or prescribed by the director under the authority of this act, or who knowingly and willfully utters, publishes, passes, or tenders as true, any such false, altered, forged or counterfeited stamp, or uses any stamp provided for and required by this act, which has already once been used, for the purpose of evading the tax hereby imposed, shall be guilty of a crime of the third degree.

b. Any person who secures, manufactures, or causes to be secured or manufactured, or has in his possession any stamp or any counterfeit impression device not prescribed or authorized by the director under the authority of this act, shall be guilty of a crime of the third degree and such fact shall be prima facie evidence that such person has counterfeited stamps.

c. Any person who has in his possession packages of cigarettes in a quantity equal to or greater than 2,000 cigarettes to which are affixed counterfeit stamps or impressions shall be guilty of a crime of the third degree.

Possession of such packages or cigarettes shall be deemed sufficient evidence to authorize conviction, unless the accused shall show to the satisfaction of the court (1) that when he bought the cigarettes he knew or made inquiries sufficient to satisfy a reasonable man, that the seller was in a regular and established business for dealing in cigarettes and was so licensed and (2) that the amount paid by him for the cigarettes represented its fair and reasonable value and that he received an invoice for the same.

d. (Deleted by amendment, P.L.1987, c.76.)

e. A person convicted of a second or subsequent offense under this section shall be sentenced to a term of imprisonment.

(cf: P.L.1987, c.76, s.41)

8. Section 609 of P.L.1948, c.65 (C.54:40A-32) is amended to read as follows:

609. Records; possession and transportation of unstamped cigarettes; seizure and confiscation of vessel or vehicles. Every person who shall transport cigarettes not stamped as required by this act or stamped in violation of subsection b. of section 405 of P.L.1948, c.65 (C.54:40A-15) upon the public highways, waterways, roads or streets of this State shall have in his actual possession invoices or delivery tickets for such cigarettes which shall show the true name and complete and exact address of the consignor or seller, the true name and complete and exact address of the consignee or purchaser, the quantity and brands of the cigarettes transported and in addition shall show separately the true name and complete and exact address of the person who has or shall assume the payment of the New Jersey State tax or the tax, if any, of the State or foreign country at the point of ultimate destination, provided that any common carrier which has issued a bill of lading for a shipment of cigarettes and is without notice to itself or to any of its agents or employees that said cigarettes are not stamped as required by this act shall be deemed to have complied with this act and the vehicle or vessel in which said cigarettes are being transported shall not be subject to confiscation hereunder. In the absence of such invoices, delivery tickets or bills of lading, as the case may be, the cigarettes so transported, the vehicle, or vessel in which the cigarettes are being transported and any paraphernalia or devices used in connection with the unstamped cigarettes or cigarettes stamped in violation of subsection b. of section 405 of P.L.1948, c.65 (C.54:40A-15), are declared to be contraband goods and may be seized by the director, his agents or employees or by any peace officer of the State when directed by the director, his agents or employees so to do, without a warrant. The director shall immediately thereafter institute a proceeding for the confiscation thereof in the Superior Court or the municipal court within the jurisdiction of which the seizure is made. The owner or any person having a security interest in any such vehicle may secure release of the same by depositing with the clerk of the court, in which such proceeding is pending, a bond with good and sufficient sureties in an amount to be fixed by the court, conditioned upon the return of said vehicle to the director upon demand after completion of said proceeding. The court may proceed in a summary manner and may direct confiscation to the director; provided, however, anything to the contrary notwithstanding, that the owner or any person claiming to be the holder of a mortgage, conditional sales contract or other security interest in any vehicle or vessel, the disposition of which is provided for above, may present his petition so alleging and be heard, and in the event it appears to the court that the property was unlawfully used by a person other than the owner or such claimant, and if such owner or claimant acquired ownership or his security interest in good faith and without knowledge that the vehicle or vessel was going to be so used, the court shall either waive forfeiture in favor of such owner or claimant and order the vehicle or vessel returned or delivered to such owner or claimant, or if it is found that the value thereof exceeds the amount of the claim, the court shall order payment of the amount of the claim out of the proceeds of the sale. Every transporter who violates the provisions of this act shall be guilty of a crime of the fourth degree, and shall, in addition to such penalties as may be imposed therefor, be liable to a penalty equal to double the amount of tax due on any unstamped cigarettes transported by him, which penalty shall be sued for and recovered in the same manner as provided for the penalties imposed by section 601 of the act to which this act is amendatory (C.54:40A-24). A person who is convicted of a second or subsequent offense under this section shall be sentenced to a term of imprisonment.

(cf: P.L.2013, c.145, s.11)

9. Section 3 of P.L.1952, c.247 (C.56:7-20) is amended to read as follows:

3. It shall be unlawful and a violation of this act:

a. For any retailer, wholesaler or distributor with intent to injure competitors or destroy or substantially lessen competition--

(1) to advertise, offer to sell, or sell, at retail or wholesale, cigarettes at less than cost to such retailer or wholesaler, as the case may be,

(2) to offer a rebate in price, to give a rebate in price, to offer a concession of any kind, or to give a concession of any kind or nature whatsoever in connection with the sale of cigarettes;

b. For any retailer, wholesaler or distributor--

(1) to induce or attempt to induce or to procure or attempt to procure the purchase of cigarettes at a price less than "cost to wholesaler" as defined in this act,

(2) to induce or attempt to induce or to procure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes,

(3) to sell, with or without a stamp, cigarette packages described in subsection b. of section 405 of P.L.1948, c.65 (C.54:40A-15);

c. Any retailer, wholesaler or distributor who violates the provisions of this section is a disorderly person and shall be prosecuted and punished by a fine of not more than $1,000 for each offense, in accordance with the provisions of Title 2C of the New Jersey Statutes. A person who is convicted of a second or subsequent offense under this section shall be sentenced to a term of imprisonment.

d. Evidence of advertisement, offering to sell or sale of cigarettes by any retailer, wholesaler or distributor at less than cost to him, or evidence of any offer of a rebate in price or the giving of a rebate in price or an offer of a concession or the giving of a concession of any kind or nature whatsoever in connection with the sale of cigarettes or the inducing or attempt to induce or the procuring or the attempt to procure the purchase of cigarettes at a price less than cost to the wholesaler, retailer or distributor shall be prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition.

(cf: P.L.1999, c.328, s.8)

10. Section 18 of P.L.1952, c.247 (C.56:7-35) is amended to read as follows:

18. Any determination by the director and any order of suspension or revocation of a license or licenses thereunder or refusal to reinstate a license or licenses after revocation [shall be reviewable by the Superior Court by proceedings in lieu of the prerogative writs] may, within 90 days after the giving of the notice thereof, file a protest in writing and request a hearing pursuant to R.S.54:49-18. Notwithstanding any other provision of law or regulation to the contrary, no appeal of the director's action shall be filed except pursuant to the procedures set forth in R.S.54:49-18.

(cf: P.L.1952, c.247, s.18)

11. Section 8 of P.L.1970, c.13 (C.5:9-8) is amended to read as follows:

8. The director shall have the power, and it shall be his duty to:

a. Supervise and administer the operation of the lottery in accordance with the provisions of this act and with the rules and regulations of the commission.

b. Subject to the approval of the commission, appoint such deputy directors as may be required to carry out the functions and duties of the division, which deputy directors shall be in the unclassified service of the civil service.

c. Subject to the approval of the commission and Title 11 of the Revised Statutes, Civil Service, appoint such professional, technical and clerical assistants and employees as may be necessary to perform the duties imposed upon the division by this act.

d. Act as secretary and executive officer of the commission.

e. In accordance with the provisions of this act and the rules and regulations of the commission, to license as agents to sell lottery tickets such persons as in his opinion will best serve the public convenience and promote the sale of tickets or shares. The director may require a bond from every licensed agent, in such amount as provided in the rules and regulations of the commission. Every licensed agent shall prominently display his license, or a copy thereof, as provided in the rules and regulations of the commission.

f. Shall confer regularly as necessary or desirable and not less than once every month with the commission on the operation and administration of the lottery; shall make available for inspection by the commission, upon request, all books, records, files, and other information and documents of the division; shall advise the commission and recommend such matters as he deems necessary and advisable to improve the operation and administration of the lottery.

g. Suspend or revoke any license issued pursuant to this act or the rules and regulations promulgated thereunder.

h. Recommend to the commission that no license as an agent to sell lottery tickets shall be issued to, or any license issued pursuant to this act or the rules and regulations promulgated thereunder shall be revoked if held by, a person who is a licensee under the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.) who, according to notice that shall be provided by the Director of the Division of Taxation in the Department of the Treasury, has been convicted of forging or counterfeiting revenue stamps pursuant to section 606 of P.L.1948, c.65 (C.54:40A-29) or of possession and transportation of unstamped cigarettes pursuant to section 609 of P.L.1948, c.65 (C.54:40A-32).

[h.] i. Subject to the approval of the commission and the applicable laws relating to public contracts, to act on behalf of the commission as using agency with respect to purchases made by the Division of Purchase and Property of goods and services required in the operation of the lottery.

[i.] j. To certify monthly to the State Treasurer and the commission a full and complete statement of lottery revenues, prize disbursements and other expenses for the preceding month.

(cf: P.L.1983, c.60, s.2)

12. Section 1 of P.L.1983, c.429 (C.5:9-12.1) is amended to read as follows:

1. In addition to any penalty, fine or term of imprisonment authorized by law, the commission shall, after appropriate hearings and factual determinations, have the authority to impose the following sanctions upon any person licensed pursuant to P.L.1970, c.13 (C.5:9-1 et seq.):

a. Assess such civil penalties as may be necessary to punish misconduct and to deter future violations, which penalties may not exceed $10,000.00;

b. Order restitution of any moneys or property unlawfully obtained or retained by a licensee;

c. Enter a cease and desist order which specifies the conduct which is to be discontinued, altered or implemented by the licensee;

d. Issue letters of reprimand or censure, which letters shall be made a permanent part of the file of each licensee so sanctioned;

e. Suspend, revoke or deny any license involving a person for whom such action is recommended by the director pursuant to subsection h. of section 8 of P.L.1970, c.13 (C.5:9-8).

[e.] f. Impose any or all of the foregoing sanctions in combination with each other.

(cf: P.L.1983, c.429, s.1)

13. This act shall take effect immediately.

STATEMENT

This bill increases certain filing fees, penalties and enhances enforcement provisions and procedures for violations of cigarette tax and unfair cigarette sales laws by cigarette license holders, with the goal of reducing the illegal possession of unstamped or counterfeit stamped cigarettes and illegal cigarette smuggling by persons licensed in the cigarette sales and tax process.

The New Jersey Division of Taxation, while committed to combating and preventing all forms of tax evasion, faces several challenges with enforcing cigarette tax law, including:

� Tax policy differences in border and corridor states that can promote casual smuggling;

� Counterfeiting of New Jersey cigarette stamps by unscrupulous dealers and other individuals to evade the tax; and

� Insufficient special enforcement agents under State hiring restrictions.

The division's crackdown on Internet purchases of cigarettes has been a successful area of reducing one of the most pervasive areas of cigarette tax evasion. However, recent studies and a report by the Director of the Division of Taxation show that New Jersey's long history of cigarette smuggling problems continue to result in the State having the highest commercial smuggling import rate in the country. Some recent estimates report that 40 percent of all cigarettes consumed in New Jersey are untaxed, resulting in substantial lost tax revenue.

This bill will implement several recommended changes in the State cigarette tax law and the Unfair Cigarette Sales Act that were recommended in the Director's Report on Cigarette Tax Evasion of June 30, 2009. These changes include:

� An increase in retail dealers annual license fees from $50 to $200, and a new license continuation surcharge of $1,000, if a retail dealer license has been subject to one suspension or renewal, and $3,000 if the retail dealer license has been subject to two suspensions or renewals;

� A mandatory license suspension or revocation of 30 days for a second or subsequent offense of sales of tobacco products to an individual under age 19;

� For a second or subsequent offense sales of single cigarettes or packs containing less than 20 cigarettes, a fine of $500 and a mandatory license suspension or revocation of 30 days;

� A streamlining of the appeals hearing process for license revocations and denial of license renewals for certain violations of the Cigarette Tax Act and for failure to pay any State tax when due;

� Mandating a term of imprisonment for second and subsequent violations of tax stamp violations where first offenses provide discretion for punishment of a term of imprisonment;

� Similar streamlined appeals process and mandated term of imprisonment for second and subsequent violations under the Unfair Cigarettes Sales Act; and

� Suspension, revocation or denial of a State lottery ticket vendor's license by the State Lottery Commission if a lottery ticket vendor is convicted of forging or counterfeiting cigarette tax stamps or of possessing and transporting unstamped cigarettes.