February 9, 2006, Introduced by Reps. Leland, Accavitti, Tobocman, Lipsey, Adamini, Hunter, McConico, Virgil Smith, Meisner and Alma Smith and referred to the Committee on Judiciary.
A bill to amend 1993 PA 327, entitled
"Tobacco products tax act,"
by amending section 9 (MCL 205.429), as amended by 2004 PA 474.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 9. (1) A tobacco product held, owned, possessed,
transported, or in control of a person in violation of this act,
and a vending machine, vehicle, and other tangible personal
property containing a tobacco product in violation of this act and
any related books and records are contraband and may be seized and
confiscated by the department as provided in this section.
(2) If an authorized inspector of the department or a police
officer has reasonable cause to believe and does believe that a
tobacco product is being acquired, possessed, transported, kept,
sold, or offered for sale in violation of this act for which the
penalty is a felony, the inspector or police officer may
investigate or search the vehicle of transportation in which the
tobacco product is believed to be located. If a tobacco product is
found in a vehicle searched under this subsection or in a place of
business inspected under this act, the tobacco product, vending
machine, vehicle, other than a vehicle owned or operated by a
transportation company otherwise transporting tobacco products in
compliance with this act, or other tangible personal property
containing those tobacco products and any books and records in
possession of the person in control or possession of the tobacco
product may be seized by the inspector or police officer and are
subject to forfeiture as contraband as provided in this section.
(3) As soon as possible, but not more than 5 business days
after seizure of any alleged contraband, the person making the
seizure shall deliver personally or by registered mail to the last
known address of the person from whom the seizure was made, if
known, an inventory statement of the property seized. A copy of the
inventory statement shall also be filed with the state treasurer.
The
inventory statement shall also contain a notice to the effect
that, unless demand for hearing as provided in this section is made
within 10 business days, the designated property is forfeited to
the state. If the person from whom the seizure was made is not
known,
the person making the seizure shall
cause have a
copy of
the
inventory statement , together with and the notice provided
for
in required by this subsection , to be published
at least 3
times in a newspaper of general circulation in the county where the
seizure was made. Within 10 business days after the date of service
of
the inventory statement , or, in the case of publication if
the notice is published, within 10 business days after the date of
last publication, the person from whom the property was seized or
any person claiming an interest in the property may, by registered
mail, facsimile transmission, or personal service, file with the
state treasurer a demand for a hearing before the state treasurer
or
a person designated by the state treasurer for a determination
as
to of whether the property was lawfully subject to seizure
and
forfeiture. The person demanding a hearing shall verify a request
for hearing filed by facsimile transmission by also providing a
copy of the original request for hearing by registered mail or
personal
service. The person or persons are A person who demands
a hearing is entitled to appear before the department, to be
represented
by counsel, and to present testimony and argument.
Upon
receipt of a request for hearing, the The department shall
hold the hearing within 15 business days after receiving the
request for the hearing. The hearing is not a contested case
proceeding and is not subject to the administrative procedures act
of
1969, 1969 PA 306, MCL 24.201 to 24.328. After the hearing, the
The department shall render its decision in writing within 10
business
days of after
the hearing and, by order, shall either
declare the seized property subject to seizure and forfeiture, or
declare the property returnable in whole or in part to the person
entitled to possession. If, within 10 business days after the date
of service of the inventory statement, the person from whom the
property was seized or any person claiming an interest in the
property does not file with the state treasurer a demand for a
hearing before the department, the property seized shall be
considered forfeited to the state by operation of law and may be
disposed of by the department as provided in this section. If,
after a hearing before the state treasurer or person designated by
the state treasurer, the department determines that the property is
lawfully subject to seizure and forfeiture and the person from whom
the property was seized or any persons claiming an interest in the
property do not take an appeal to the circuit court of the county
in which the seizure was made within the time prescribed in this
section, the property seized shall be considered forfeited to the
state by operation of law and may be disposed of by the department
as provided in this section.
(4) If
a A person
is aggrieved
by the decision of the
department ,
that person may appeal to the circuit court of the
county where the seizure was made to obtain a judicial
determination of the lawfulness of the seizure and forfeiture. The
action shall be commenced within 20 days after notice of the
department's determination is sent to the person or persons
claiming an interest in the seized property. The court shall hear
the action and determine the issues of fact and law involved in
accordance with rules of practice and procedure as in other in rem
proceedings. If a judicial determination of the lawfulness of the
seizure and forfeiture cannot be made before deterioration of any
of the property seized, the court shall order the destruction or
sale of the property with public notice as determined by the court
and require the proceeds to be deposited with the court until the
lawfulness of the seizure and forfeiture is finally adjudicated.
(5) Section 2975 of the revised judicature act of 1961, 1961
PA 236, MCL 600.2975, applies to a motor vehicle that has been
seized under this act but not forfeited.
(6) (5)
The department shall destroy all cigarettes
forfeited to this state. The department may sell all tobacco
products, except cigarettes, and other property forfeited pursuant
to this section at public sale. Public notice of the sale shall be
given at least 5 days before the day of sale. The department may
pay an amount not to exceed 25% of the proceeds of the sale to the
local governmental unit whose law enforcement agency performed the
seizure. The balance of the proceeds derived from the sale by the
department shall be credited to the general fund of the state.
(7) (6)
The seizure and destruction or sale of a tobacco
product or other property under this section does not relieve a
person from a fine, imprisonment, or other penalty for violation of
this act.
(8) (7)
A person who is not an employee or officer of this
state or a political subdivision of this state who furnishes to the
department
or to any a
law enforcement agency original
information
concerning a violation of this act
, which information
that
results in the collection and recovery
of any a
tax or
penalty
or leads to the forfeiture of any cigarettes
, or
other
property ,
may be awarded and paid by the state treasurer ,
compensation of not more than 10% of the net amount received from
the sale of any forfeited cigarettes or other property, but not to
exceed $5,000.00, which shall be paid out of the receipts from the
sale
of the property. If any amount money is issued to the
local
governmental
unit under subsection (5) (6), the amount awarded
under
this subsection to a person who provides original
information
that results in a seizure of cigarettes or other
property
by a local law enforcement agency shall be paid from that
amount
issued under subsection (5) money. If in the opinion of the
attorney general and the director of the department of state police
it
is deemed necessary to preserve the identity of the person
furnishing the information, the attorney general and the director
of the department of state police shall file with the state
treasurer
an affidavit setting forth stating that necessity and
a
warrant may be issued jointly to the attorney general and the
director
of the department of state police. Upon payment to the
a
person furnishing that information under this subsection, the
attorney general and the director of the department of state police
shall file with the state treasurer an affidavit that they have
paid
the money has been by them paid to
the person. entitled to
the
money under this section.
(9) (8)
Beginning September 1, 1998, if a retailer possesses
or sells cigarettes on which the tax imposed under this act has not
been paid or accrued to a wholesaler, secondary wholesaler, or
unclassified acquirer licensed under this act, the retailer shall
be prohibited from purchasing, possessing, or selling any
cigarettes or other tobacco products as follows:
(a) For a first violation, for a period of not more than 6
months.
(b) For a second violation within a period of 5 years, for a
period of at least 6 months and not more than 36 months.
(c) For a third or subsequent violation within a period of 5
years, for a period of at least 1 year and not more than 5 years.
(10) (9)
The prohibition described in subsection (8)
shall
be
(9) is effective upon service by certified mail or personal
service on the retailer of notice issued by the department ordering
the retailer to cease all sales and purchases of cigarettes and
other tobacco products. Upon receipt of this notice, the retailer
may return any tobacco products in the possession of the retailer
upon which the tax imposed by this act has been paid or accrued to
a wholesaler, secondary wholesaler, or unclassified acquirer
licensed under this act. The department shall notify all licensed
wholesalers, manufacturers, secondary wholesalers, vending machine
operators,
and unclassified acquirers of any retailer who that
the retailer has been prohibited from purchasing cigarettes or
other tobacco products and the duration of the prohibition. A
wholesaler, secondary wholesaler, or unclassified acquirer shall
not sell cigarettes or other tobacco products to a retailer after
receipt of notice from the department that the retailer is
prohibited from purchasing tobacco products. Any cigarettes or
other tobacco products found on the premises of the retailer during
the
period of prohibition shall be considered are contraband
and
subject
to seizure under this section, and
shall constitute their
possession constitutes an additional improper possession under this
subsection. The retailer may contest the order prohibiting
purchase, possession, or sale of tobacco products in accordance
with the appeal procedures and time limits provided in subsection
(3). of
this section. After completion of the appeals provided
an
appeal or upon expiration of the period
to request such an
appeal,
the department shall issue a final order and make service
upon
serve on the retailer
of an
order to cease all purchases,
possession, and sale of all cigarettes and other tobacco products
for a specified period as appropriate. This order does not relieve
the retailer from seizure and sale of a tobacco product or other
property
under this section , or relieve the retailer from
a
fine, imprisonment, or other penalty for violation of this act.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 5665 (request no.
04010'05) of the 93rd Legislature is enacted into law.