November 6, 2008, Introduced by Senator HUNTER 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 a copy
of the inventory statement, together with the notice provided for
in 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, 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 whether the property was
lawfully subject to seizure and forfeiture. The person 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 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 department shall hold the hearing within 15 business
days. 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 department shall
render its decision in writing within 10 business days of 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 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 law enforcement agency original information
concerning a violation of this act or the fire safety standard and
firefighter protection act, which information results in the
collection and recovery of any 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 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 paid
under subsection (5)
(6). 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 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 person furnishing that information, the attorney
general and the director of the department of state police shall
file with the state treasurer an affidavit that 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 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 contraband and subject to seizure under this section,
and shall constitute 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 or
upon expiration of the period to request such appeal, the
department shall issue a final order and make service upon 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 takes effect 540 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No. 1621
of the 94th Legislature is enacted into law.