S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5918

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              July 19, 2013
                               ___________

Introduced  by  Sen.  AVELLA -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT establishing a temporary task force on black market cigarettes

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative intent. The sale of black market, untaxed ciga-
rettes  has  resulted  in the loss of hundreds of millions of dollars in
revenue to the state, robbing state health care and programs designed to
help children. According to the Tax Foundation, a Washington D.C., busi-
ness-oriented tax research organization, approximately  60.9  percentage
of  cigarettes  sold  in New York were smuggled in from other states. In
addition, a study conducted by John Dunham & Associates on behalf of New
York Association of Convenience Stores found that state taxes  were  not
collected  on  one  out of every two packs of cigarettes consumed in New
York State in 2011.
  The widely available black market cigarettes threaten national securi-
ty and public safety of New Yorkers. Investigations conducted on  feder-
al,  state  and  local  levels  revealed that proceeds from black market
cigarettes are used to fuel organized crime and terrorist organizations,
such as Hamas and Hezbollah. In addition, this criminal activity creates
imbalanced and unfair business competition for law-abiding mom  and  pop
stores and other businesses who do pay taxes. In light of the overwhelm-
ing  growth  in black market cigarettes and the inherent dangers of this
unbridled criminal activity, it is imperative  that  we  make  concerted
efforts  to  develop  enhanced  measures and strategies to fully address
this issue.
  It is the intent of the Legislature to create a temporary  task  force
to  effectively  address  the  illegal  tobacco sale and distribution of
untaxed, unstamped and smuggled tobacco products in New York.  The  Task
Force will be comprised of departments and agencies involved in tackling
illicit  tobacco  and  will examine and analyze currently existing laws,
policies and programs to develop measures that can  reduce  and  prevent
black market tobacco in New York.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD11641-02-3

S. 5918                             2

  S  2.  1.  A  temporary  task force, to be known as the temporary task
force on black market cigarettes,  is  hereby  created  to  examine  and
investigate  such issues related to sale and distribution in New York of
tobacco products for which required tax has not  been  paid,  including,
but not limited to, unlawfully manufactured cigarettes, cigarettes smug-
gled  from  low-tax  jurisdictions,  and  stolen  tobacco  products from
convenience stores, cargos and truck hijacking. This task force will  be
comprised of appropriate state agency personnel, law enforcement author-
ities,  and  an  expert  in the fields of taxation.  The task force will
facilitate studying the root causes of rising black market cigarettes in
New York and assess the economic, health, and public  safety  impact  of
illicit cigarette sales and distribution in this state.
  2. Such temporary task force shall have the powers, including, but not
limited to, to:
  (a)  conduct  public hearings in furtherance of the performance of its
duties under this act;
  (b) issue subpoenas for and to compel attendance of witnesses and  the
production of books, records, documents and other relevant evidence;
  (c) recommend legislation consistent with the purpose of this section;
  (d)  develop  and  support innovative law enforcement models to target
and disrupt smuggling and distribution networks;
  (e) develop and communicate messages for the general public, informing
them of the serious consequences of purchasing black market cigarettes;
  (f) educate private sector entities about the dangers of black  market
cigarettes; and
  (g) develop measures and goals that will enable the task force and its
partners to better gauge success in decreasing the black market in ciga-
rettes.
  3. The task force shall consist of 9 members as follows:
  (a)  the attorney general, or his or her designee thereof, shall chair
the task force;
  (b) commissioner of financial services, or his or her designee;
  (c) commissioner of criminal justice services, or his or her designee;
  (d) commissioner of health, or his or her designee;
  (e) the governor shall appoint one member who shall be  an  expert  in
tobacco taxation;
  (f)  the  temporary  president  of  the  senate and the speaker of the
assembly shall each appoint one member to the task force who shall be  a
member of a state or local law enforcement agency; and
  (g)  the  president of the Small Business Congress, Inc. or his or her
designee and the commissioner of the New York City department of finance
or his or her designee shall serve as non-voting members.
  4. Four voting members of the  temporary  task  force  shall,  at  all
times,  constitute  a  quorum. Members shall receive no compensation for
their services; members  (including  non-voting  members)  who  are  not
governmental employees shall be reimbursed for their reasonable expenses
incurred  during  the  performance of their duties.  Notwithstanding any
inconsistent provision of any general, special or local law, no  officer
or  employee  of the state or of any political subdivision thereof shall
forfeit his or her office or  employment  by  reason  of  acceptance  of
appointment to the temporary task force.
  5.  Within  one year of the effective date of this act, such temporary
task force shall issue a report containing such findings and recommenda-
tions.
  S 3. This act shall take effect immediately.