Establishes a temporary task force on black market cigarettes

Summary of provisions

Section 1: Legislative intent.

Section 2: Subsection 1: Creates the temporary task force to be known as the temporary task force on black market cigarettes.

Subsection 2: Gives the task force the power to conduct public hearings, issue subpoenas for and to compel attendance of witnesses and the production of books, records, documents and other relevant evidence in order to recommend legislation, policies and programs consistent with the purposes of this section. In addition, this bill authorizes the task force to develop and support innovative law enforcement models to target and disrupt smuggling and distribution network and to educate the general public and private sector entities about the danger of black market cigarettes. Furthermore, this legislation empowers the task force to develop measures and goals that will enable the task force and its partners to better gauge success in decreasing the black market in cigarettes.

Subsection 3: The task force shall consist of 9 members as follows: the Attorney General, or the designee thereof, shall chair the task force; Commissioner of the Department of Financial Services, or the designee; Commissioner of the Division of Criminal Justice Services, or the designee; Commissioner of the Department of Health, or the designee; The Governor shall appoint one member who shall be an expert in tobacco taxation; The president of the Senate and the speaker of the Assembly shall each appoint one member to the task force who shall be a member of a state or local law enforcement agency. In addition to these members, the president of the Small Business Congress, Inc. or his or her designee and the Commissioner of the New York City Department of Finance or his or her designee shall serve as non-voting members. Four voting members shall constitute a quorum. Members shall receive no compensation but members who are not governmental employees shall be reimbursed for their reasonable expenses incurred during the performance of their duties.

Subsection 4: Within one year of this act becoming law, the temporary task force shall issue its report containing its findings and recommendations.

Section 3: This act shall take effect immediately.

Justification

The sale of black-market, untaxed cigarettes has resulted in the loss of hundreds of millions of dollars in revenue to the state, robbing state health care and programs designed to help children. According to the Tax Foundation, a Washington D.C., business-oriented tax research organization, approximately 60.9 percentage of cigarettes sold in New York were smuggled in from other

states. In addition, a study conducted by John Dunham & Associates on behalf of New York Association of Convenience Stores found that state taxes were not collected on one out of every two packs of cigarettes consumed in New York State in 2011.

The widely available black market cigarettes threaten national security and public safety of New Yorkers, Investigations conducted on federal, state and local levels revealed that proceeds from black market cigarettes are used to fuel organized crime and terrorist organizations, such as Hamas and Hezbollah. In addition, this criminal activity creates imbalanced and unfair business competition for law-abiding mom and pop stores and other business who do pay taxes. In light of the overwhelming growth in black market cigarettes and the inherent dangers of this unbridled criminal activity, it is imperative that we make concerted efforts to develop enhanced measures and strategies to fully address this issue

Prior legislative history

None

Fiscal implications for state and local governments

None known.

Effective date

This act shall take effect immediately.