Relates to the destruction of seized and forfeited cigarettes and tobacco products.
S3649A-2011 Actions
- Sep 23, 2011: SIGNED CHAP.556
- Sep 12, 2011: DELIVERED TO GOVERNOR
- Jun 23, 2011: returned to senate
- Jun 23, 2011: passed assembly
- Jun 23, 2011: ordered to third reading rules cal.593
- Jun 23, 2011: substituted for a451b
- Jun 16, 2011: referred to ways and means
- Jun 16, 2011: DELIVERED TO ASSEMBLY
- Jun 16, 2011: PASSED SENATE
- Jun 14, 2011: ORDERED TO THIRD READING CAL.1218
- Jun 13, 2011: COMMITTEE DISCHARGED AND COMMITTED TO RULES
- Jun 7, 2011: REPORTED AND COMMITTED TO FINANCE
- May 18, 2011: PRINT NUMBER 3649A
- May 18, 2011: AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
- Feb 28, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
S3649A-2011 Meetings
Investigations and Government Operations: Jun 7, 2011, Rules: Jun 17, 2011, Rules: Jun 24, 2011S3649A-2011 Calendars
Active List: Jun 15, 2011 , Floor Calendar: Jun 14, 2011 , Floor Calendar: Jun 15, 2011 , Floor Calendar: Jun 16, 2011S3649A-2011 Votes
VOTE: COMMITTEE VOTE:
- Investigations and Government Operations
- Jun 7, 2011
Ayes (7): Marcellino, Alesi, Golden, Nozzolio, Zeldin, Squadron, Diaz
Ayes W/R (1): Peralta
VOTE: COMMITTEE VOTE:
- Rules
- Jun 14, 2011
Ayes (20): Skelos, Alesi, Farley, Hannon, Johnson, Larkin, LaValle, Libous, Marcellino, Maziarz, Nozzolio, Saland, Seward, Breslin, Dilan, Krueger, Parker, Perkins, Smith, Stewart-Cousins
Ayes W/R (3): Sampson, Duane, Montgomery
Nays (1): Hassell-Thompson
VOTE: FLOOR VOTE:
- Jun 16, 2011
Ayes (61): Adams, Addabbo, Alesi, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Espaillat, Farley, Flanagan, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Huntley, Johnson, Kennedy, Klein, Krueger, Kruger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, O'Mara, Oppenheimer, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin
Absent (1): Fuschillo
S3649A-2011 Memo
BILL NUMBER:S3649A TITLE OF BILL: An act to amend the tax law and the administrative code of the city of New York, in relation to the destruction of seized and forfeited cigarettes and tobacco products PURPOSE: This bill would discontinue the practice of the government re-selling counterfeit or seized cigarettes. SUMMARY OF PROVISIONS: Section 1 amends section 1846 of the tax law by continuing to allow for the resale of cigarette vending machines with the money being used for the state general fund but discontinuing the practice of selling seized or counterfeit cigarettes to inmates or secondary retailers. It would also grant the holders of the trademark of the seized product to examine the seized goods in order to identify fraud techniques and other information. In addition to this, it would also allow the state to retain small amounts of the seized goods that do not violate any federal counterfeit laws to be used by law enforcement in sting operations that fight the illegal distribution of cigarettes. Section 2 amends section 1846-a of the tax law would remove the right of the municipality to resell counterfeit cigarettes and require that they be destroyed. Section 3 amends section 11-4021 of the administrative code of the city of New York by continuing to allow for the resale of cigarette vending machines with the money being used for the state general fund but discontinuing the practice of selling seized or counterfeit cigarettes to inmates or secondary retailers. It would also grant the holders of the trademark of the seized product to examine the seized goods in order to identify fraud techniques and other information. Section 4 sets the effective date. JUSTIFICATION: Currently, when counterfeit cigarettes are seized by law or tax enforcement, notice is published in the newspaper where the seizure occurs and the products are available for sale to the public, secondary retailers, and the prison system. Funds generated from the sale of cigarettes and other seized products are earmarked for the general fund, meaning they can be used for any legitimate government purpose. Though precedents exist for the government to sell seized items (i.e. homes, cars, etc) cigarettes are a common consumer product and in many cases the products being sold are substandard and in some cases dangerous to the public. This bill would take the state of New York out of the business of selling counterfeit and seized cigarettes and put it in the business of removing these products from circulation. Furthermore, by allowing the manufacturers of the products to inspect the seized goods, it will allow the state to work with the manufacturers in identifying ways in which these frauds are being perpetrated and thereby allowing these products to be sold in a legitimate manner. if people choose to purchase these products, it should be done legitimately with the appropriate taxes being levied after the appropriate inspection of the product has been concluded. LEGISLATIVE HISTORY: 2009-10: A.11460 - Referred to Ways and Means/S.8255 - Passed Senate FISCAL IMPLICATIONS: The last state auction of seized cigarettes, held in 2008, four years after the previous sale, brought the state $74,334 in revenue. Whether the staff time in organizing the sale, the price of publishing notices, and other indirect costs outweigh the revenue is unclear. EFFECTIVE DATE: This act shall take effect immediately.
S3649A-2011 Text
S T A T E O F N E W Y O R K
________________________________________________________________________
3649--A
2011-2012 Regular Sessions
I N SENATE
February 28, 2011
___________
Introduced by Sen. GALLIVAN -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the tax law and the administrative code of the city of
New York, in relation to the destruction of seized and forfeited ciga-
rettes and tobacco products
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 1846 of the tax law, as added by chapter 65 of the
laws of 1985, subdivision (a) as amended by section 2 of part E of chap-
ter 93 of the laws of 2002, subdivision (a-1) as added by section 3 of
part J of chapter 383 of the laws of 2001, subdivision (c) as amended by
section 169 of subpart B of part C of chapter 62 of the laws of 2011,
subdivision (d) as added by chapter 384 of the laws of 1999, is amended
to read as follows:
S 1846. Seizure and forfeiture of cigarettes.--(a) Whenever a police
officer designated in section 1.20 of the criminal procedure law or a
peace officer designated in subdivision four of section 2.10 of such
law, acting pursuant to his or her special duties, shall discover any
cigarettes subject to tax provided by article twenty of this chapter or
by chapter thirteen of title eleven of the administrative code of the
city of New York, and upon which the tax has not been paid or the stamps
not affixed as required by such article or such chapter thirteen, they
are hereby authorized and empowered forthwith to seize and take
possession of such cigarettes, together with any vending machine or
receptacle in which they are held for sale. Such cigarettes, vending
machine or receptacle seized by a police officer or such peace officer
shall be turned over to the commissioner. Such seized cigarettes, vend-
ing machine or receptacle, not including money contained in such vending
machine or receptacle, shall be forfeited to the state. The commission-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04509-05-1
S. 3649--A 2
er may, within a reasonable time thereafter, upon publication of a
notice to such effect for at least five successive days, before the day
of sale, in a newspaper published or circulated in the county where the
seizure was made, sell such forfeited [cigarettes and] vending machines
or receptacles at public sale and pay the proceeds into the state treas-
ury to the credit of the general fund. [Cigarettes so seized and sold
shall be sold only to an agent under article twenty of this chapter and
the notice of sale shall contain a provision to this effect.] Notwith-
standing any other provision of this section, the commissioner may enter
into an agreement with any city of this state which is authorized to
impose a tax similar to that imposed by article twenty of this chapter
to provide for the disposition between the state and any such city of
the proceeds from any such sale. ALL CIGARETTES FORFEITED TO THE STATE
SHALL BE DESTROYED OR USED FOR LAW ENFORCEMENT PURPOSES, EXCEPT THAT
CIGARETTES THAT VIOLATE, OR ARE SUSPECTED OF VIOLATING, FEDERAL TRADE-
MARK LAWS OR IMPORT LAWS SHALL NOT BE USED FOR LAW ENFORCEMENT PURPOSES.
IF THE COMMISSIONER DETERMINES THE CIGARETTES MAY NOT BE USED FOR LAW
ENFORCEMENT PURPOSES, THE COMMISSIONER MUST, WITHIN A REASONABLE TIME
AFTER THE FORFEITURE OF SUCH CIGARETTES, UPON PUBLICATION IN THE STATE
REGISTRY, DESTROY SUCH FORFEITED CIGARETTES. THE COMMISSIONER MAY, PRIOR
TO ANY DESTRUCTION OF CIGARETTES, PERMIT THE TRUE HOLDER OF THE TRADE-
MARK RIGHTS IN THE CIGARETTES TO INSPECT SUCH FORFEITED CIGARETTES IN
ORDER TO ASSIST IN ANY INVESTIGATION REGARDING SUCH CIGARETTES.
(a-1) Whenever a police officer designated in section 1.20 of the
criminal procedure law or a peace officer designated in subdivision four
of section 2.10 of such law, acting pursuant to his or her special
duties, shall discover any cigarettes which have been stamped in
violation of section four hundred eighty-b of this chapter, such officer
is hereby authorized and empowered forthwith to seize and take
possession of such cigarettes, and such cigarettes shall be subject to a
forfeiture action pursuant to the procedures provided for in article
thirteen-A of the civil practice law and rules, as if such article
specifically provided for forfeiture of cigarettes seized pursuant to
this section as a preconviction forfeiture crime. Subdivisions (b), (c)
and (d) of this section shall not apply to cigarettes seized pursuant to
this subdivision.
(b) In the alternative, the tax commission, on reasonable notice by
mail or otherwise, may permit the person from whom said cigarettes were
seized to redeem the said cigarettes, and any vending machine or recep-
tacle seized therewith, by the payment of the tax due, plus a penalty of
fifty per centum thereof, plus interest on the amount of tax due for
each month or fraction thereof after such tax became due (determined
without regard to any extension of time for filing or paying) at the
rate applicable under subparagraph (ii) of paragraph (a) of subdivision
one of section four hundred eighty-one of this chapter and the costs
incurred in such proceeding, which total payment shall not be less than
five dollars; provided, however, that such seizure and sale or redemp-
tion shall not be deemed to relieve any person from fine or imprisonment
provided for in this article for violation of any provision of article
twenty of this chapter.
(c) In the alternative, [if the tax commission concludes that any
cigarettes seized pursuant to this section, when offered at public sale,
will bring a price less than the reasonably estimated price which the
department of corrections and community supervision would have to pay
for the purchase of such cigarettes for sale to or use by inmates in
institutions under the jurisdiction of such department,] the tax commis-
S. 3649--A 3
sion may dispose of [such] ANY cigarettes SEIZED PURSUANT TO THIS
SECTION, EXCEPT THOSE THAT VIOLATE, OR ARE SUSPECTED OF VIOLATING,
FEDERAL TRADEMARK LAWS OR IMPORT LAWS, by transferring them to the
department of corrections and community supervision for sale to or use
by inmates in such institutions.
(d) Cigarettes seized pursuant to a violation of section four hundred
seventy-three-b of this chapter shall be destroyed [or sold for export
at the discretion of the commissioner]. The department may also seize
and destroy any vending machine or receptacle in which cigarettes
stamped in violation of section four hundred seventy-three-b of this
chapter are held for sale.
S 2. Section 1846-a of the tax law, as added by chapter 61 of the laws
of 1989, subdivision (a-1) as added by chapter 552 of the laws of 2008,
subdivision (c) as amended by section 170 of subpart B of part C of
chapter 62 of the laws of 2011, is amended to read as follows:
S 1846-a. Forfeiture action with respect to tobacco products. (a)
Whenever a police officer designated in section 1.20 of the criminal
procedure law or a peace officer designated in subdivision four of
section 2.10 of such law, acting pursuant to his special duties, shall
discover any tobacco products in excess of five hundred cigars or ten
pounds of tobacco which are being imported for sale in the state where
the person importing or causing such tobacco products to be imported has
not been appointed as a distributor pursuant to section four hundred
seventy-two of this chapter, such police officer or peace officer is
hereby authorized and empowered forthwith to seize and take possession
of such tobacco products. Such tobacco products seized by a police offi-
cer or peace officer shall be turned over to the commissioner [of taxa-
tion and finance]. Such seized tobacco products shall be forfeited to
the state. [The] ALL TOBACCO PRODUCTS FORFEITED TO THE STATE SHALL BE
DESTROYED OR USED FOR LAW ENFORCEMENT PURPOSES, EXCEPT THAT TOBACCO
PRODUCTS THAT VIOLATE, OR ARE SUSPECTED OF VIOLATING, FEDERAL TRADEMARK
LAWS OR IMPORT LAWS SHALL NOT BE USED FOR LAW ENFORCEMENT PURPOSES. IF
THE COMMISSIONER DETERMINES THE TOBACCO PRODUCTS MAY NOT BE USED FOR LAW
ENFORCEMENT PURPOSES, THE commissioner [of taxation and finance may]
MUST, within a reasonable time thereafter, upon publication IN THE STATE
REGISTRY of a notice to such effect [for at least five successive days,]
before the day of [sale, in a newspaper published or circulated in the
county where the seizure was made, sell] DESTRUCTION, DESTROY such
forfeited tobacco products [at public sale and pay the proceeds into the
state treasury to the credit of the general fund. Tobacco products so
seized and sold shall be sold only to a distributor appointed under
article twenty of this chapter and the notice of sale shall contain a
provision to this effect]. THE COMMISSIONER MAY, PRIOR TO ANY
DESTRUCTION OF TOBACCO PRODUCTS, PERMIT THE TRUE HOLDER OF THE TRADEMARK
RIGHTS IN THE TOBACCO PRODUCTS TO INSPECT SUCH FORFEITED PRODUCTS IN
ORDER TO ASSIST IN ANY INVESTIGATION REGARDING SUCH TOBACCO PRODUCTS.
(a-1) Whenever a police officer designated in section 1.20 of the
criminal procedure law or a peace officer designated in subdivision four
of section 2.10 of the criminal procedure law, acting pursuant to his or
her special duties, discovers any roll-your-own tobacco that is in
violation of section four hundred eighty-c of this chapter, the officer
is authorized and empowered to seize and take possession of the roll-
your-own tobacco, and the roll-your-own tobacco is subject to a forfei-
ture action under the procedures provided for in article thirteen-A of
the civil practice law and rules, as if that article specifically
provided for forfeiture of roll-your-own tobacco seized under this
S. 3649--A 4
section as a preconviction forfeiture crime. Subdivisions (b) and (c) of
this section do not apply to roll-your-own tobacco seized pursuant to
this subdivision.
(b) In the alternative, the commissioner, on reasonable notice by mail
or otherwise, may permit the person from whom said tobacco products were
seized to redeem the said tobacco products by the payment of the tax
due, plus a penalty of fifty per centum thereof, plus interest on the
amount of tax due for each month or fraction thereof after such tax
became due (determined without regard to any extension of time for
filing or paying) at the rate applicable under subparagraph (ii) of
paragraph (a) of subdivision one of section four hundred eighty-one of
this chapter and the costs incurred in such proceeding, which total
payment shall not be less than five dollars; provided, however, that
such seizure and sale or redemption shall not be deemed to relieve any
person from fine or imprisonment provided for in this article for
violation of any provision of article twenty of this chapter.
(c) In the alternative, [if the commissioner concludes that any tobac-
co products seized pursuant to this section, when offered at public
sale, will bring a price less than the reasonably estimated price which
the department of corrections and community supervision would have to
pay for the purchase of such tobacco products for sale to or use by
inmates in institutions under the jurisdiction of such department,] the
commissioner may dispose of [such] ANY tobacco products SEIZED PURSUANT
TO THIS SECTION, EXCEPT THOSE THAT VIOLATE, OR ARE SUSPECTED OF VIOLAT-
ING, FEDERAL TRADEMARK OR IMPORT LAWS, by transferring them to the
department of corrections and community supervision for sale to or use
by inmates in such institutions.
S 3. Section 11-4021 of the administrative code of the city of New
York, as added by chapter 765 of the laws of 1985, is amended to read as
follows:
S 11-4021 Seizure and forfeiture of cigarettes. (a) Whenever a police
officer designated in section 1.20 of the criminal procedure law or a
peace officer designated in subdivision five of section 2.10 of such
law, acting pursuant to his special duties, shall discover any ciga-
rettes subject to any tax provided by chapter thirteen of this title,
and upon which the tax has not been paid or the stamps not affixed as
required by such chapter, they are hereby authorized and empowered
forthwith to seize and take possession of such cigarettes, together with
any vending machine or receptacle in which they are held for sale. Such
cigarettes, vending machine or receptacle seized by a police officer or
such peace officer shall be turned over to the commissioner of finance.
(b) The seized cigarettes and any vending machine or receptacle seized
therewith, but not the money contained in such vending machine or recep-
tacle shall thereupon be forfeited to the city, unless the person from
whom the seizure is made, or the owner of such seized cigarettes, vend-
ing machine or receptacle, or any other person having an interest in
such property, shall within ten days of such seizure, apply to the
commissioner of finance for a hearing to determine the propriety of the
seizure, or unless the commissioner of finance shall on his own motion
release the seized cigarettes, vending machine or receptacle. After such
hearing the commissioner of finance shall give notice of his decision to
the petitioner. The decision of the commissioner shall be reviewable for
error, illegality, unconstitutionality or any other reason whatsoever by
a proceeding under article seventy-eight of the civil practice law and
rules if application therefor is made to the supreme court within thirty
days after the giving of the notice of such decision. Such proceeding
S. 3649--A 5
shall not be instituted unless there shall first be filed with the
commissioner of finance an undertaking, issued by a surety company
authorized to transact business in New York state and approved by the
superintendent of insurance of New York state as to solvency and respon-
sibility, in such amount as a justice of the supreme court shall
approve, to the effect that if such proceeding be dismissed, or the
seizure confirmed, the petitioner will pay all costs and charges which
may accrue in the prosecution of the proceeding.
(c) The commissioner of finance may, within a reasonable time after
the forfeiture to the city of such [cigarettes,] vending machines or
receptacles, upon publication of a notice to such effect for at least
five successive days, in a newspaper published or circulated in the
city, sell such forfeited [cigarettes and] vending machines or recepta-
cles at public sale and pay the proceeds into the treasury of the city
to the credit of the general fund. [Cigarettes so seized and sold shall
be sold only to an agent under chapter thirteen of this title and the
notice of sale shall contain a provision to this effect.] Such seized
[cigarettes,] vending machines or receptacles may be sold prior to
forfeiture if the owner of the seized property consents to the sale.
Notwithstanding any other provision of this section, the commissioner of
finance may enter into an agreement with the state tax commission to
provide for the disposition between the city and state of the proceeds
from any such sale. THE COMMISSIONER OF FINANCE MAY ALSO TRANSFER ANY
SEIZED CIGARETTES TO THE STATE FOR DESTRUCTION. ALL CIGARETTES
FORFEITED TO THE STATE SHALL BE DESTROYED OR USED FOR LAW ENFORCEMENT
PURPOSES, EXCEPT THAT CIGARETTES THAT VIOLATE, OR ARE SUSPECTED OF
VIOLATING, FEDERAL TRADEMARK LAWS OR IMPORT LAWS SHALL NOT BE USED FOR
LAW ENFORCEMENT PURPOSES. IF THE COMMISSIONER DETERMINES THE CIGARETTES
MAY NOT BE USED FOR LAW ENFORCEMENT PURPOSES, THE COMMISSIONER OF
FINANCE MUST, WITHIN A REASONABLE TIME AFTER THE FORFEITURE TO THE CITY
OF SUCH CIGARETTES, UPON PUBLICATION OF A NOTICE TO SUCH EFFECT FOR AT
LEAST FIVE SUCCESSIVE DAYS, PRIOR TO DESTRUCTION, IN A NEWSPAPER
PUBLISHED OR CIRCULATED IN THE CITY, DESTROY SUCH FORFEITED CIGARETTES.
SUCH COMMISSIONER MAY, PRIOR TO ANY DESTRUCTION OF CIGARETTES, PERMIT
THE TRUE HOLDER OF THE TRADEMARK RIGHTS IN THE CIGARETTES TO INSPECT
SUCH FORFEITED CIGARETTES IN ORDER TO ASSIST IN ANY INVESTIGATION
REGARDING SUCH CIGARETTES.
(d) In the alternative, the commissioner of finance, on reasonable
notice by mail or otherwise, may permit the person from whom said ciga-
rettes were seized to redeem the said cigarettes, and any vending
machine or receptacle seized therewith, or may permit the owner of any
such cigarettes, vending machine or receptacle to redeem the same, by
the payment of the tax due, plus a penalty of fifty percent thereof,
plus interest on the amount of tax due for each month or fraction there-
of after such tax became due (determined without regard to any extension
of time for filing or paying) at the rate applicable under subdivision
[(d)] D of section 11-1317 of this title and the costs incurred in such
proceeding, which total payment shall not be less than five dollars;
provided, however, that such seizure and sale or redemption shall not be
deemed to relieve any person from fine or imprisonment provided for in
this chapter for violation of any provisions of this chapter or chapter
thirteen of this title.
(e) In the alternative, [if the commissioner of finance concludes that
any cigarettes seized pursuant to this section, when offered at public
sale, will bring a price less than the reasonably estimated price which
the department of correction would have to pay for the purchase of such
S. 3649--A 6
cigarettes for sale to or use by inmates in institutions under the
jurisdiction of such department,] the commissioner of finance may
dispose of [such] ANY cigarettes SEIZED PURSUANT TO THIS SECTION, EXCEPT
THOSE THAT VIOLATE, OR ARE SUSPECTED OF VIOLATING, FEDERAL TRADEMARK
LAWS OR IMPORT LAWS, by transferring them to the department of
correction for sale to or use by inmates in such institutions.
S 4. This act shall take effect immediately.

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