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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.
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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
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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
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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.
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