SENATE BILL No. 265

 

 

February 19, 2009, Introduced by Senators HUNTER, BASHAM, SCOTT, BRATER and THOMAS and referred to the Committee on Commerce and Tourism.

 

 

 

     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 that is held, owned, possessed,

 

transported, or in control of a person in violation of this act or

 

that is not marked as required in section 11 of the fire safety

 

standard and firefighter protection act, and a vending machine,

 

vehicle, and other tangible personal property containing a tobacco

 

product in violation of this act or that is not marked as required

 

in section 11 of the fire safety standard and firefighter

 

protection 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. If the

 

contraband is cigarettes seized because of an allegation that the

 

cigarettes are not marked as required in section 11 of the fire

 

safety standard and firefighter protection act, the person making

 

the seizure shall also provide notice of the seizure and an

 

inventory of the cigarettes seized to the manufacturer that

 


certified that brand of cigarettes under section 7 of the fire

 

safety standard and firefighter protection act, if any. 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 who

 

demands 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) The department shall destroy all cigarettes forfeited to

 

this state. However, before destroying cigarettes forfeited because

 

the cigarettes were not marked as required in section 11 of the

 

fire safety standard and firefighter protection act, the department

 

shall provide a manufacturer that certified that brand of

 

cigarettes under section 7 of the fire safety standard and

 

firefighter protection act an opportunity to inspect the

 

cigarettes.

 

     (6) 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 or the fire safety standard and firefighter protection

 

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 or the fire

 

safety standard and firefighter protection act 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 paid 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 that the retailer who

 

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 a final 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 takes effect January

 

1, 2010.

 


     Enacting section 2. This amendatory act does not take effect

 

unless Senate Bill No. 264                                   

 

          of the 95th Legislature is enacted into law.