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COMMITTEE REPORT
May 5, 1999
H. 3826
S. Printed 5/5/99--H.
Read the first time April 6, 1999.
To whom was referred a Bill (H. 3826), to amend Chapter 17, Title 16, Code of Laws of South Carolina, 1976, relating to offenses against public policy, etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass with amendment:
Amend the bill, as and if amended, in SECTION 1, page 1, by deleting lines 37 and 38 of subsection (2) which reads: / (2) It is unlawful to sell or hold for sale a package of cigarettes if: / and inserting:
/ (2) It is unlawful to sell, hold for sale, or distribute a package of cigarettes if: /
Amend the bill further in SECTION 1, page 2, by deleting subsections (3), (4), and (5) on lines 15-29 and inserting:
/(3) A person who knowingly sells, holds for sale, or distributes cigarette packages in violation of subsection (2) is guilty of a misdemeanor and, upon conviction, shall be imprisoned for not more than three years or fined not more than one thousand dollars, or both.
(4) In addition to the other penalties provided by law, law enforcement may seize and destroy or sell to the manufacturer, for export only, any packages described in subsection (2). /
Amend title to conform.
JAMES H. HARRISON, for Committee.
EXPLANATION OF IMPACT:
Attorney General's Office
The Attorney General's Office forecasts $121,094 in recurring costs to the General Fund of the State with the passage of the proposed legislation, pursuant to Section 16-17-505 (4)(a).
Recurring Costs
(1) Attorney II (1.0 FTE) $36,532.50
Pers. Service/Empl. Contr. The Attorney II will prosecute cases which are developed by the investigator.
(2) Investigator I (1.0 FTE) $20,787.50
Pers. Service/Empl. Contr. The Investigator I will investigate pursuant to Section 16-17-505 (4)(a).
(3) Admin. Asst. (1.0 FTE) $24,675.00
Pers. Service/Empl. Contr. The Administrative Assistant will provide support services.
(4) Other Operating Expenses $39,099.00
The Other Operating Expenses are an annual representation for the above referenced FTEs.
__________
Total Recurring Costs $121,094.00
Total FTEs 3.0
The Attorney General's Office notes that justification for the aforementioned costs and FTEs are due to the fact that the proposed legislation creates the need for a new law enforcement function within its agency; specifically, Section 16-17-505(4)(a) provides for the Attorney General's Office to seize and destroy cigarette packages which do not comply with said legislation. The Attorney General's Office acknowledges that no methodology is available to estimate the number of violations that would occur in the event that this bill becomes law; hence, the aforementioned law enforcement function could be expanded or reduced in future years. Finally, the Attorney General's Office is basing the aforementioned assumption on FY98 actual operating expenses, the same figure that was used in the Office's Accountability Report to the General Assembly.
Department of Corrections
A review of this bill by the department indicates there will be minimal impact on the agency's operations, therefore, there will be minimal cost to the General Fund of the State which the agency can absorb.
Department of Probation, Parole, and Pardon Services
A review of this bill by the department indicates there will be minimal impact on the agency's operations, therefore, there will be minimal cost to the General Fund of the State which the agency can absorb.
Department of Revenue
The Department of Revenue has stated that there would be no impact to the General Fund of the State or to the department. This bill would allow the department to revoke licenses which is currently a routine activity.
Approved By:
Don Addy
Office of State Budget
TO AMEND CHAPTER 17, TITLE 16, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO OFFENSES AGAINST PUBLIC POLICY, BY ADDING SECTION 16-17-505, SO AS TO PROVIDE FOR THE OFFENSE OF SELLING OR HOLDING FOR SALE A PACKAGE OF CIGARETTES THAT VIOLATES FEDERAL LAW IN REGARD TO LABELS, PACKAGING, OR OTHER REQUIREMENTS, TO PROVIDE THAT THE ATTORNEY GENERAL MAY SEIZE AND DESTROY THE ILLEGAL PACKAGE, TO PROVIDE THAT THE DEPARTMENT OF REVENUE MAY REVOKE THE LICENSE TO SELL TOBACCO OF A PERSON WHO SELLS ILLEGAL CIGARETTE PACKAGES, TO PROVIDE THAT SELLING CIGARETTE PACKAGES IN VIOLATION OF THIS SECTION IS AN UNFAIR TRADE PRACTICE, AND TO PROVIDE PENALTIES FOR VIOLATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 16-17-505. (1) For purposes of this section, 'package' means a pack, carton, or container of any kind in which cigarettes are offered for sale, sold, or otherwise distributed, or intended for distribution to consumers.
(2) It is unlawful to sell or hold for sale a package of cigarettes if:
(a) the package differs in any respect with the requirements of the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. 1331, for the placement of labels, warnings, or any other information upon a package of cigarettes that is to be sold within the United States;
(b) the package is labeled 'For Export Only', 'U.S. Tax Exempt', 'For Use Outside U.S.', or similar wording indicating that the manufacturer did not intend that the product be sold in the United States;
(c) the package, or a package containing individually stamped packages, has been altered by adding or deleting the wording, labels, or warnings described in (a) or (b) of this subsection;
(d) the package has been imported into the United States after January 1, 2000, in violation of 26 U.S.C. 5754; or
(e) the package in any way violates federal trademark or copyright laws.
(3) A person who sells or holds for sale cigarette packages in violation of subsection (2) is guilty of a misdemeanor and, upon conviction, shall be imprisoned for not more than three years or fined not more than one thousand dollars, or both.
(4) In addition to the other penalties provided by law:
(a) the Attorney General may seize and destroy or sell to the manufacturer, only for export, any packages that do not comply with subsection (2) of this section; and
(b) the Department of Revenue may revoke a license pertaining to the sale or distribution of cigarettes or other tobacco products including, but not limited to, any license issued pursuant to Section 12-21-660, from any person who sells or holds for sale a cigarette package in violation of subsection (2) of this section.
(5) A violation of subsection (2) is an unfair trade practice pursuant to Section 39-5-20."
SECTION 2. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
SECTION 3. This act takes effect upon approval by the Governor.
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