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91_HB3995eng HB3995 Engrossed LRB9111789SMdv 1 AN ACT concerning cigarettes. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Cigarette Tax Act is amended by adding 5 Section 3-10 as follows: 6 (35 ILCS 130/3-10 new) 7 Sec. 3-10. Cigarette enforcement. 8 (a) Prohibitions. It is unlawful for any person: 9 (1) to sell or distribute in this State; to 10 acquire, hold, own, possess, or transport, for sale or 11 distribution in this State; or to import, or cause to be 12 imported into this State for sale or distribution in this 13 State: 14 (A) any cigarettes the package of which: 15 (i) bears any statement, label, stamp, 16 sticker, or notice indicating that the 17 manufacturer did not intend the cigarettes to 18 be sold, distributed, or used in the United 19 States, including but not limited to labels 20 stating "For Export Only", "U.S. Tax Exempt", 21 "For Use Outside U.S.", or similar wording; or 22 (ii) does not comply with: 23 (aa) all requirements imposed by or 24 pursuant to federal law regarding warnings 25 and other information on packages of 26 cigarettes manufactured, packaged, or 27 imported for sale, distribution, or use in 28 the United States, including but not 29 limited to the precise warning labels 30 specified in the federal Cigarette 31 Labeling and Advertising Act, 15 U.S.C. HB3995 Engrossed -2- LRB9111789SMdv 1 1333; and 2 (bb) all federal trademark and 3 copyright laws; 4 (B) any cigarettes imported into the United 5 States in violation of 26 U.S.C. 5754 or any other 6 federal law, or implementing federal regulations; 7 (C) any cigarettes that such person otherwise 8 knows or has reason to know the manufacturer did not 9 intend to be sold, distributed, or used in the 10 United States; or 11 (D) any cigarettes for which there has not 12 been submitted to the Secretary of the U.S. 13 Department of Health and Human Services the list or 14 lists of the ingredients added to tobacco in the 15 manufacture of the cigarettes required by the 16 federal Cigarette Labeling and Advertising Act, 15 17 U.S.C. 1335a; 18 (2) to alter the package of any cigarettes, prior 19 to sale or distribution to the ultimate consumer, so as 20 to remove, conceal, or obscure: 21 (A) any statement, label, stamp, sticker, or 22 notice described in subdivision (a)(1)(A)(i) of this 23 Section; 24 (B) any health warning that is not specified 25 in, or does not conform with the requirements of, 26 the federal Cigarette Labeling and Advertising Act, 27 15 U.S.C. 1333; or 28 (3) to affix any stamp required pursuant to this 29 Act to the package of any cigarettes described in 30 subdivision (a)(1) of this Section or altered in 31 violation of subdivision (a)(2). 32 (b) Documentation. On the first business day of each 33 month, each person licensed to affix the State tax stamp to 34 cigarettes shall file with the Department, for all cigarettes HB3995 Engrossed -3- LRB9111789SMdv 1 imported into the United States to which the person has 2 affixed the tax stamp in the preceding month: 3 (1) a copy of: 4 (A) the permit issued pursuant to the Internal 5 Revenue Code, 26 U.S.C. 5713, to the person 6 importing the cigarettes into the United States 7 allowing the person to import the cigarettes; and 8 (B) the customs form containing, with respect 9 to the cigarettes, the internal revenue tax 10 information required by the U.S. Bureau of Alcohol, 11 Tobacco and Firearms; 12 (2) a statement, signed by the person under penalty 13 of perjury, which shall be treated as confidential by the 14 Department and exempt from disclosure under the Freedom 15 of Information Act, identifying the brand and brand 16 styles of all such cigarettes, the quantity of each brand 17 style of such cigarettes, the supplier of such 18 cigarettes, and the person or persons, if any, to whom 19 such cigarettes have been conveyed for resale; and a 20 separate statement, signed by the individual under 21 penalty of perjury, which shall not be treated as 22 confidential or exempt from disclosure, separately 23 identifying the brands and brand styles of such 24 cigarettes; and 25 (3) a statement, signed by an officer of the 26 manufacturer or importer under penalty of perjury, 27 certifying that the manufacturer or importer has complied 28 with: 29 (A) the package health warning and ingredient 30 reporting requirements of the federal Cigarette 31 Labeling and Advertising Act, 15 U.S.C. 1333 and 32 1335a, with respect to such cigarettes; and 33 (B) the provisions of Exhibit T of the Master 34 Settlement Agreement entered in the case of People HB3995 Engrossed -4- LRB9111789SMdv 1 of the State of Illinois v. Philip Morris, et al. 2 (Circuit Court of Cook County, No. 96-L13146), 3 including a statement indicating whether the 4 manufacturer is, or is not, a participating tobacco 5 manufacturer within the meaning of Exhibit T. 6 (c) Administrative sanctions. 7 (1) Upon finding that a distributor has committed 8 any of the acts prohibited by subsection (a), knowing or 9 having reason to know that he or she has done so, or has 10 failed to comply with any requirement of subsection (b), 11 the Department may revoke or suspend the license or 12 licenses of any distributor pursuant to the procedures 13 set forth in Section 6 and impose on the distributor a 14 civil penalty in an amount not to exceed the greater of 15 500% of the retail value of the cigarettes involved or 16 $5,000. 17 (2) Cigarettes that are acquired, held, owned, 18 possessed, transported in, imported into, or sold or 19 distributed in this State in violation of this Section 20 shall be deemed contraband under this Act and are subject 21 to seizure and forfeiture as provided in this Act, and 22 all such cigarettes seized and forfeited shall be 23 destroyed. Such cigarettes shall be deemed contraband 24 whether the violation of this Section is knowing or 25 otherwise. 26 (d) Unfair trade practices. A violation of subsection 27 (a) or subsection (b) of this Section shall constitute an 28 unlawful practice as provided in the Consumer Fraud and 29 Deceptive Business Practices Act. 30 (e) Unfair cigarette sales. For purposes of the 31 Trademark Registration and Protection Act and the Counterfeit 32 Trademark Act, cigarettes imported or reimported into the 33 United States for sale or distribution under any trade name, 34 trade dress, or trademark that is the same as, or is HB3995 Engrossed -5- LRB9111789SMdv 1 confusingly similar to, any trade name, trade dress, or 2 trademark used for cigarettes manufactured in the United 3 States for sale or distribution in the United States shall be 4 presumed to have been purchased outside of the ordinary 5 channels of trade. 6 (f) General provisions. 7 (1) This Section shall be enforced by the 8 Department; provided that, at the request of the Director 9 of Revenue or the Director's duly authorized agent, the 10 State police and all local police authorities shall 11 enforce the provisions of this Section. The Attorney 12 General has concurrent power with the State's Attorney of 13 any county to enforce this Section. 14 (2) For the purpose of enforcing this Section, the 15 Director of Revenue and any agency to which the Director 16 has delegated enforcement responsibility pursuant to 17 subdivision (f)(1) may request information from any State 18 or local agency and may share information with and 19 request information from any federal agency and any 20 agency of any other state or any local agency of any 21 other state. 22 (3) In addition to any other remedy provided by 23 law, including enforcement as provided in subdivision 24 (a)(1), any person may bring an action for appropriate 25 injunctive or other equitable relief for a violation of 26 this Section; actual damages, if any, sustained by reason 27 of the violation; and, as determined by the court, 28 interest on the damages from the date of the complaint, 29 taxable costs, and reasonable attorney's fees. If the 30 trier of fact finds that the violation is flagrant, it 31 may increase recovery to an amount not in excess of 3 32 times the actual damages sustained by reason of the 33 violation. 34 (g) Definitions. As used in this Section: HB3995 Engrossed -6- LRB9111789SMdv 1 "Importer" means that term as defined in 26 U.S.C. 2 5702(1). 3 "Package" means that term as defined in 15 U.S.C. 4 1332(4). 5 (h) Applicability. 6 (1) This Section does not apply to: 7 (A) cigarettes allowed to be imported or 8 brought into the United States for personal use; and 9 (B) cigarettes sold or intended to be sold as 10 duty-free merchandise by a duty-free sales 11 enterprise in accordance with the provisions of 19 12 U.S.C. 1555(b) and any implementing regulations; 13 except that this Section shall apply to any such 14 cigarettes that are brought back into the customs 15 territory for resale within the customs territory. 16 (2) The penalties provided in this Section are in 17 addition to any other penalties imposed under other 18 provision of law. 19 Section 10. The Cigarette Use Tax Act is amended by 20 adding Section 3-10 as follows: 21 (35 ILCS 135/3-10 new) 22 Sec. 3-10. Cigarette enforcement. 23 (a) Prohibitions. It is unlawful for any person: 24 (1) to sell or distribute in this State; to 25 acquire, hold, own, possess, or transport, for sale or 26 distribution in this State; or to import, or cause to be 27 imported into this State for sale or distribution in this 28 State: 29 (A) any cigarettes the package of which: 30 (i) bears any statement, label, stamp, 31 sticker, or notice indicating that the 32 manufacturer did not intend the cigarettes to HB3995 Engrossed -7- LRB9111789SMdv 1 be sold, distributed, or used in the United 2 States, including but not limited to labels 3 stating "For Export Only", "U.S. Tax Exempt", 4 "For Use Outside U.S.", or similar wording; or 5 (ii) does not comply with: 6 (aa) all requirements imposed by or 7 pursuant to federal law regarding warnings 8 and other information on packages of 9 cigarettes manufactured, packaged, or 10 imported for sale, distribution, or use in 11 the United States, including but not 12 limited to the precise warning labels 13 specified in the federal Cigarette 14 Labeling and Advertising Act, 15 U.S.C. 15 1333; and 16 (bb) all federal trademark and 17 copyright laws; 18 (B) any cigarettes imported into the United 19 States in violation of 26 U.S.C. 5754 or any other 20 federal law, or implementing federal regulations; 21 (C) any cigarettes that such person otherwise 22 knows or has reason to know the manufacturer did not 23 intend to be sold, distributed, or used in the 24 United States; or 25 (D) any cigarettes for which there has not 26 been submitted to the Secretary of the U.S. 27 Department of Health and Human Services the list or 28 lists of the ingredients added to tobacco in the 29 manufacture of the cigarettes required by the 30 federal Cigarette Labeling and Advertising Act, 15 31 U.S.C. 1335a; 32 (2) to alter the package of any cigarettes, prior 33 to sale or distribution to the ultimate consumer, so as 34 to remove, conceal, or obscure: HB3995 Engrossed -8- LRB9111789SMdv 1 (A) any statement, label, stamp, sticker, or 2 notice described in subdivision (a)(1)(A)(i) of this 3 Section; 4 (B) any health warning that is not specified 5 in, or does not conform with the requirements of, 6 the federal Cigarette Labeling and Advertising Act, 7 15 U.S.C. 1333; or 8 (3) to affix any stamp required pursuant to this 9 Act to the package of any cigarettes described in 10 subdivision (a)(1) of this Section or altered in 11 violation of subdivision (a)(2). 12 (b) Documentation. On the first business day of each 13 month, each person licensed to affix the State tax stamp to 14 cigarettes shall file with the Department, for all cigarettes 15 imported into the United States to which the person has 16 affixed the tax stamp in the preceding month: 17 (1) a copy of: 18 (A) the permit issued pursuant to the Internal 19 Revenue Code, 26 U.S.C. 5713, to the person 20 importing the cigarettes into the United States 21 allowing the person to import the cigarettes; and 22 (B) the customs form containing, with respect 23 to the cigarettes, the internal revenue tax 24 information required by the U.S. Bureau of Alcohol, 25 Tobacco and Firearms; 26 (2) a statement, signed by the person under penalty 27 of perjury, which shall be treated as confidential by the 28 Department and exempt from disclosure under the Freedom 29 of Information Act, identifying the brand and brand 30 styles of all such cigarettes, the quantity of each brand 31 style of such cigarettes, the supplier of such 32 cigarettes, and the person or persons, if any, to whom 33 such cigarettes have been conveyed for resale; and a 34 separate statement, signed by the individual under HB3995 Engrossed -9- LRB9111789SMdv 1 penalty of perjury, which shall not be treated as 2 confidential or exempt from disclosure, separately 3 identifying the brands and brand styles of such 4 cigarettes; and 5 (3) a statement, signed by an officer of the 6 manufacturer or importer under penalty of perjury, 7 certifying that the manufacturer or importer has complied 8 with: 9 (A) the package health warning and ingredient 10 reporting requirements of the federal Cigarette 11 Labeling and Advertising Act, 15 U.S.C. 1333 and 12 1335a, with respect to such cigarettes; and 13 (B) the provisions of Exhibit T of the Master 14 Settlement Agreement entered in the case of People 15 of the State of Illinois v. Philip Morris, et al. 16 (Circuit Court of Cook County, No. 96-L13146), 17 including a statement indicating whether the 18 manufacturer is, or is not, a participating tobacco 19 manufacturer within the meaning of Exhibit T. 20 (c) Administrative sanctions. 21 (1) Upon finding that a distributor has committed 22 any of the acts prohibited by subsection (a), knowing or 23 having reason to know that he or she has done so, or has 24 failed to comply with any requirement of subsection (b), 25 the Department may revoke or suspend the license or 26 licenses of any distributor pursuant to the procedures 27 set forth in Section 6 and impose on the distributor a 28 civil penalty in an amount not to exceed the greater of 29 500% of the retail value of the cigarettes involved or 30 $5,000. 31 (2) Cigarettes that are acquired, held, owned, 32 possessed, transported in, imported into, or sold or 33 distributed in this State in violation of this Section 34 shall be deemed contraband under this Act and are subject HB3995 Engrossed -10- LRB9111789SMdv 1 to seizure and forfeiture as provided in this Act, and 2 all such cigarettes seized and forfeited shall be 3 destroyed. Such cigarettes shall be deemed contraband 4 whether the violation of this Section is knowing or 5 otherwise. 6 (d) Unfair trade practices. A violation of subsection 7 (a) or subsection (b) of this Section shall constitute an 8 unlawful practice as provided in the Consumer Fraud and 9 Deceptive Business Practices Act. 10 (e) Unfair cigarette sales. For purposes of the 11 Trademark Registration and Protection Act and the Counterfeit 12 Trademark Act, cigarettes imported or reimported into the 13 United States for sale or distribution under any trade name, 14 trade dress, or trademark that is the same as, or is 15 confusingly similar to, any trade name, trade dress, or 16 trademark used for cigarettes manufactured in the United 17 States for sale or distribution in the United States shall be 18 presumed to have been purchased outside of the ordinary 19 channels of trade. 20 (f) General provisions. 21 (1) This Section shall be enforced by the 22 Department; provided that, at the request of the Director 23 of Revenue or the Director's duly authorized agent, the 24 State police and all local police authorities shall 25 enforce the provisions of this Section. The Attorney 26 General has concurrent power with the State's Attorney of 27 any county to enforce this Section. 28 (2) For the purpose of enforcing this Section, the 29 Director of Revenue and any agency to which the Director 30 has delegated enforcement responsibility pursuant to 31 subdivision (f)(1) may request information from any State 32 or local agency and may share information with and 33 request information from any federal agency and any 34 agency of any other state or any local agency of any HB3995 Engrossed -11- LRB9111789SMdv 1 other state. 2 (3) In addition to any other remedy provided by 3 law, including enforcement as provided in subdivision 4 (a)(1), any person may bring an action for appropriate 5 injunctive or other equitable relief for a violation of 6 this Section; actual damages, if any, sustained by reason 7 of the violation; and, as determined by the court, 8 interest on the damages from the date of the complaint, 9 taxable costs, and reasonable attorney's fees. If the 10 trier of fact finds that the violation is flagrant, it 11 may increase recovery to an amount not in excess of 3 12 times the actual damages sustained by reason of the 13 violation. 14 (g) Definitions. As used in this Section: 15 "Importer" means that term as defined in 26 U.S.C. 16 5702(1). 17 "Package" means that term as defined in 15 U.S.C. 18 1332(4). 19 (h) Applicability. 20 (1) This Section does not apply to: 21 (A) cigarettes allowed to be imported or 22 brought into the United States for personal use; and 23 (B) cigarettes sold or intended to be sold as 24 duty-free merchandise by a duty-free sales 25 enterprise in accordance with the provisions of 19 26 U.S.C. 1555(b) and any implementing regulations; 27 except that this Section shall apply to any such 28 cigarettes that are brought back into the customs 29 territory for resale within the customs territory. 30 (2) The penalties provided in this Section are in 31 addition to any other penalties imposed under other 32 provision of law. 33 Section 15. The Consumer Fraud and Deceptive Business HB3995 Engrossed -12- LRB9111789SMdv 1 Practices Act is amended by changing Section 2Z as follows: 2 (815 ILCS 505/2Z) (from Ch. 121 1/2, par. 262Z) 3 Sec. 2Z. Violations of other Acts. Any person who 4 knowingly violates the Automotive Repair Act, the Home Repair 5 and Remodeling Act, the Dance Studio Act, the Physical 6 Fitness Services Act, the Hearing Instrument Consumer 7 Protection Act, the Illinois Union Label Act, the Job 8 Referral and Job Listing Services Consumer Protection Act, 9 the Travel Promotion Consumer Protection Act, the Credit 10 Services Organizations Act, the Automatic Telephone Dialers 11 Act, the Pay-Per-Call Services Consumer Protection Act, the 12 Telephone Solicitations Act, the Illinois Funeral or Burial 13 Funds Act, the Cemetery Care Act, the Safe and Hygienic Bed 14 Act, the Pre-Need Cemetery Sales Act, subsection (a) or (b) 15 of Section 3-10 of the Cigarette Tax Act, subsection (a) or 16 (b) of Section 3-10 of the Cigarette Use Tax Act, or the 17 Electronic Mail Act commits an unlawful practice within the 18 meaning of this Act. 19 (Source: P.A. 90-426, eff. 1-1-98; 91-164, eff. 7-16-99; 20 91-230, eff.1-1-00; 91-233, eff. 1-1-00; revised 8-9-99.) 21 Section 99. Effective date. This Act takes effect upon 22 becoming law.