2002 SESSION

02-2372

09/10

HOUSE BILL 1470-FN

COMMITTEE: Executive Departments and Administration

ANALYSIS

This bill transfers tobacco products sales licensing authority from the department of revenue administration to the liquor commission and increases license fees for doing business in tobacco products sales.

This bill was requested by the study committee established in 2001, 280 (SB 148).

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

02-2372

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Two

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Definitions; Tobacco Tax. Amend RSA 78:1 by inserting after paragraph XX the following new paragraph:

XXI. "Liquor Commission" means the liquor commission established in RSA 176:1.

2 Tobacco Products Sales Licensing Authority Transferred From Department of Revenue Administration to Liquor Commission; License Fees Increased. Amend RSA 78:2 to read as follows:

78:2 Licenses.

I.(a) Each manufacturer, wholesaler, sub-jobber, vending machine operator, retailer, and sampler shall secure a license from the [commissioner] liquor commission before engaging in the business of selling or distributing tobacco products in this state or continuing to engage in such business. Each wholesale, sub-job and retail outlet shall have a separate license regardless of the fact that one or more outlets may be owned or controlled by a single person. Each tobacco products vending machine to be operated in this state shall be licensed by the [commissioner] liquor commission and shall be appropriately identified as being licensed.

(b) The liquor commission, in consultation with the commissioner, shall adopt rules pursuant to RSA 541-A relative to the licensing and identification of each tobacco products vending machine, and the information required in an application for a license.

(c) The [commissioner] liquor commission shall issue a license upon application stating such information necessary to identify the outlet and the character of business transacted.

(d) The annual fees for licenses shall be: $100 for a manufacturer's license; $250 for a wholesaler's license; $150 for a sub-jobber's license; [$70] $100 for a vending machine operator's license; [$10] $100 for a retailer's license; [$10] $100 for a sampler's license; and [$10] $100 for each vending machine location[, for the purpose of helping to pay the cost of administering this chapter]. All license fees collected shall be retained by the liquor commission for the purposes of performing its enforcement duties under this chapter and RSA 126-K.

(e) The liquor commission shall provide the commissioner with quarterly updated lists of all licensees under this section.

(f) Each license shall be prominently displayed on the premises described in it. Any person who shall sell, offer for sale or possess with intent to sell any tobacco products without such license as provided in this section shall be subject to the penalty provisions of RSA 21-J:39.

I-a. Notwithstanding RSA 21-J:14, information regarding licenses issued pursuant to this section and information regarding enforcement actions taken pursuant to this chapter and RSA [126-I] 126-K shall be public records.

I-b. The [commissioner] liquor commission, when issuing or renewing a retailer's license under RSA 78:2, shall furnish a sign which shall read or be substantially similar to the following: "State Law prohibits the sale of tobacco products to persons under age 18 and the purchase, possession, or use of tobacco products by persons under age 18. Warning: violators of these provisions may be subject to a fine." The sign shall be posted at any location where tobacco products are sold or distributed. The [commissioner] liquor commission shall adopt rules, under RSA 541-A, relative to placement of these warning signs in areas where tobacco products are sold or distributed.

II. Unlicensed tobacco product vending machines retailing tobacco products are those machines without a current sticker or license affixed to them. The commissioner [or his], the commissioner's agent, or an investigator with the liquor commission shall seal each unlicensed machine, until such time as said machine is licensed as evidenced by the presence of a visible current sticker or license on said machine. Said sealing shall be so as to prevent the purchase of tobacco products and the use of the machine.

III. No person shall sell tobacco products through a vending machine unless access to said machine is readily available or it is constructed so as to permit the commissioner, [or his] the commissioner's agent, or investigators with the liquor commission to readily determine whether the packages of tobacco products being sold have proper stamps affixed to them which show payment of the tobacco tax imposed under RSA 78:7.

3 Tampering With Seal. Amend RSA 78:3 to read as follows:

78:3 Tampering with Seal. It shall be unlawful for any person, licensed or unlicensed, to tamper with any seal affixed by the commissioner [or his], the commissioner's agents, or investigators with the liquor commission to any tobacco products vending machine, as required under RSA 78:2. Any person who violates this section shall be guilty of a violation for the first offense. For each subsequent offense [he] such person shall be guilty of a misdemeanor.

4 Reference Corrected. Term of License; Renewals. Amend RSA 78:4 to read as follow:

78:4 Term of License; Renewals. Licenses issued under RSA 78:2 shall expire [on June 30 in each even-numbered year] 12 months from date of issue, with the month in which the license is effective counted as the first month, unless sooner revoked or unless the business in respect to which the license was issued should change ownership. Licenses may be renewed upon signed application as provided in RSA 78:2 and upon paying the prescribed fee, provided that a license shall not be renewed if there are unpaid fees, fines, or penalties resulting from violations of this chapter or RSA [126-I] 126-K attributable to the license or the licensee.

5 Suspension and Revocation of License by Commissioner. Amend RSA 78:6 to read as follows:

78:6 Suspension and Revocation of License by Commissioner. The commissioner may adopt rules pursuant to RSA 541-A relative to accomplishing the purpose of RSA 78. The [commissioner] liquor commission may suspend or revoke any license issued under RSA 78:2 for failure to comply with the provisions of this chapter and with any rules which the commissioner may adopt. The [commissioner shall] liquor commission may suspend or revoke any license issued under RSA 78:2 [if ordered to do so] pursuant to RSA [126-I] 126-K.

6 Unauthorized Sales. Amend RSA 78:12-a to read as follows:

78:12-a Unauthorized Sales. Manufacturers, wholesalers and sub-jobbers shall not sell tobacco products to any licensee who does not possess a valid or current license issued by the [commissioner] liquor commission. Any person who violates the provisions of this section shall be subject to the penalty provisions of RSA 21-J:39.

7 Vending Machines; Lists of Locations. Amend RSA 78:12-d, V to read as follows:

V. Vending machine operators shall supply the liquor commission and the commissioner with a list specifying the location of each licensed machine.

8 Vending Machines; Violations; Penalties. Amend RSA 78:12-d, VII to read as follows:

VII. Violations of this section shall be civil infractions punishable by administrative action by the [commissioner] liquor commission against the licensee. Fines for violations of paragraphs I-V shall be no more than $100 for a first offense and no more than $200 for a second offense. For the third offense, the [commissioner] liquor commission shall issue a letter of warning detailing necessary corrective actions and an administrative fine ranging from $500 to $1,500. In addition, the license to sell tobacco products shall be suspended for a period of 10 consecutive days and not exceeding 30 consecutive days. For the fourth offense, the [commissioner] liquor commission shall issue either an administrative fine and a suspension of a minimum of 10 consecutive days not to exceed 40 consecutive days, or a suspension. The administrative fine shall range from $750 to $3,000 while any suspension without a fine shall be 40-consecutive days. For any violation beyond the fourth, the [commissioner] liquor commission shall revoke any license for the business or business entity at the location where the infraction occurred or any principal thereof for a period of one year from the date of revocation. The liquor commission shall determine the level of the violation by reviewing the licensee's record and counting violations that have occurred within 3 years of the date of the violation being considered.

9 Inspections Authorized. Amend RSA 78:26 to read as follows:

78:26 Inspection Authorized.

I. The commissioner or any agent or employee of the department of revenue administration, and any policeman, constable, sheriff or deputy sheriff, or an investigator of the bureau of enforcement of the liquor commission may enter in and upon any place or premises where tobacco products are held, kept, located, manufactured, or stored for the purpose of inspecting such products and ascertaining that the tobacco products at such premises, or any portion thereof, shall not be sold, used or consumed in this state without the tobacco products tax first having been paid.

II. Any member of the commission, assistant, or investigator with the liquor commission may enter any place where tobacco products are sold or manufactured, at any time, and may examine any license or permit issued or purported to have been issued under the terms of this title. They shall make complaints for violations of this chapter and/or RSA 126-K.

10 Penalties; Violations of Federal Requirements. Amend RSA 78:34, VII to read as follows:

VII. The penalty for violation of [any provision] paragraphs I-VI of this section is loss of license for a period of 90 days for a first offense, loss of license for a period of one year for subsequent offenses, and a fine to be determined by the [commissioner] liquor commission which shall not exceed $10,000.

11 Youth Access to Tobacco Products; Penalties; License Suspensions and Revocations. Amend RSA 126-K:12, II-III to read as follows:

II. The commission may issue administrative warnings and assess fines and may [order the commissioner of revenue administration to] suspend or revoke a license issued pursuant to RSA 78 for a specified period of time for violations of this chapter.

III. On or before April 1 of each [even-numbered] year, the commission shall provide the department of revenue administration with a list of the names and addresses of all persons against whom fines and penalties were assessed pursuant to this chapter and who have not paid said fines and penalties in full by the date of the list. The commission shall update the information provided to the department of revenue administration prior to June 30 of each [even-numbered] year and thereafter as requested by the department.

12 Effective Date. This act shall take effect July 1, 2002.

LBAO

02-2372

2/7/02

HB 1470-FN - FISCAL NOTE

FISCAL IMPACT: