AB1170: Bill Text

2005 Assembly BILL 1170

April 3, 2006 - Introduced by Representative Kreuser, cosponsored by Senator Miller. Referred to Committee on State Affairs.

AB1170,2,2 An Act to repeal 139.34 (1) (b); to renumber and amend 139.345 (3) (a) 2.; to amend 77.61 (11), 134.65 (1), 134.65 (2) (a), 134.65 (5), 139.30 (7), 139.32 (4), 139.321 (1) (intro.), 139.321 (1) (a) 1., 139.34 (1) (a), 139.34 (1) (c) (intro.), 139.34 (4), 139.34 (6), 139.34 (8), 139.345 (1) (a) (intro.), 139.345 (1) (b), 139.345 (1) (d), 139.345 (3) (intro.), 139.345 (3) (a) (intro.), 139.345 (7) (a), 139.37 (1) (a), 139.40 (1), 139.40 (2), 139.44 (1m), 139.44 (2), 139.44 (3), 139.44 (4), 139.44 (5), 139.44 (6), 139.44 (7), 139.75 (2), 139.75 (4) (a), 139.75 (4) (c), 139.75 (7), 139.75 (8), 139.79 (title), 139.79 (1), 139.79 (2), 139.81 (1) and 139.81 (2); to repeal and recreate 139.30 (4n); and to create 134.65 (1n), 134.65 (1r), 134.66 (2) (d), 134.66 (3m), 139.30 (8s), 139.34 (1) (c) 3m., 139.34 (1) (c) 4m., 139.34 (1) (cm), 139.345 (3) (a) 2. b., 139.345 (3) (a) 2. c., 139.345 (8), 139.345 (9), 139.345 (10), 139.44 (6m), 139.75 (3g), 139.75 (3r), 139.75 (4) (cm), 139.75 (4n), 139.76 (3), 139.78 (1m) and 139.795 of the statutes; relating to: the direct marketing of cigarette and tobacco products in this state and providing penalties.

Analysis by the Legislative Reference Bureau

Under current law, generally, a person may not sell cigarettes in this state as a distributor, jobber, vending machine operator, or multiple retailer without having a permit from the Department of Revenue (DOR). A "jobber" is any person who acquires cigarettes from manufacturers or distributors, stores the cigarettes, and sells the cigarettes to retailers for resale.

Current law also prohibits a direct marketer from selling cigarettes to consumers in this state unless the direct marketer fulfills certain requirements. Current law defines "direct marketing" as publishing or making accessible an offer for the sale of cigarettes to consumers in this state, or selling cigarettes, using any means by which the consumer is not physically present on a premise that sells cigarettes.

Under current law, a direct marketer must certify to DOR: that the person will register with debit and credit card companies; that the invoices for all shipments of cigarettes will bear the direct marketer's name and address; and that the direct marketer will provide DOR any information that DOR considers necessary. The direct marketer may not sell any cigarettes unless the sales tax, use tax, or cigarette tax, as appropriate, has been paid on the sale of the cigarettes.

Current law requires a direct marketer who sells cigarettes to consumers in this state to verify the consumer's name and address and that the consumer is at least 18 years of age. In addition, any person who delivers such cigarettes to consumers in this state must verify that the person who purchased the cigarettes, and who receives the delivery, is at least 18 years of age.

Under this bill, generally, the same provisions under current law that apply to the direct marketing of cigarettes also apply to the direct marketing of tobacco products. In addition, no person may sell cigarettes or tobacco products to consumers in this state unless the person applies to DOR for a permit.

Under current law, a person may not sell cigarettes or tobacco products to consumers in this state unless the person obtains a license from each city, village, or town in which the person intends to sell cigarettes or tobacco products. Under the bill, no city, village, or town may issue a license to any person who has an arrest or conviction record related to selling cigarettes or tobacco products. Under the bill, a direct marketer who holds a valid permit to sell cigarettes or tobacco products to consumers in this state is not required to obtain a license from each city, village, or town in which the cigarettes or tobacco products are sold.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report concerning the proposed penalty and the costs or savings that are likely to result if the bill is enacted.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1170, s. 1 Section 1. 77.61 (11) of the statutes is amended to read:

AB1170,3,10 77.61 (11) Any city, village or town clerk or other official whose duty it is to issue licenses or permits to engage in a business involving the sale at retail of tangible personal property subject to tax under this subchapter, or the furnishing of services so subject to tax, shall, before issuing such license or permit, require proof that the person to whom such license or permit is to be issued is the holder of a seller's permit as required by or is registered to collect, report, and remit use tax under this subchapter or has been informed by an employee of the department that the department will issue a seller's permit to that person or register that person to collect, report, and remit use tax.

AB1170, s. 2 Section 2. 134.65 (1) of the statutes is amended to read:

AB1170,3,19 134.65 (1) No person shall in any manner, or upon any pretense, or by any device, directly or indirectly sell, expose for sale, possess with intent to sell, exchange, barter, dispose of or give away any cigarettes or tobacco products to any person not holding a license as herein provided or a permit under ss. 139.30 to 139.41 or 139.79 to 139.795 without first obtaining a license from the clerk of the city, village or town wherein such privilege is sought to be exercised. This subsection does not apply to a person who holds a valid permit under s. 139.345 or 139.795 and who sells cigarettes or tobacco products solely as a direct marketer.

AB1170, s. 3 Section 3. 134.65 (1n) of the statutes is created to read:

AB1170,4,3 134.65 (1n) (a) The department of revenue shall prepare an application form for licenses issued under this section. In addition to the information required under sub. (1m), the form shall require all of the following information:

AB1170,4,5 1. The applicant's history relevant to the applicant's fitness to hold a license under this section.

AB1170,4,6 2. The kind of license for which the applicant is applying.

AB1170,4,7 3. The premises where cigarettes or tobacco products will be sold or stored.

AB1170,4,9 4. If the applicant is a corporation, the identity of the corporate officers and agent.

AB1170,4,11 5. If the applicant is a limited liability company, the identity of the company members or managers and agent.

AB1170,4,12 6. The applicant's trade name, if any.

AB1170,4,13 7. Any other information required by the department.

AB1170,4,15 (b) The department of revenue shall provide 1 copy of each application prepared under this subsection to each city, village, and town.

AB1170,4,17 (c) Each applicant for a license under this section shall use the application form prepared under this subsection.

AB1170,4,20 (d) 1. Each application for a license under this section shall be sworn to by the applicant and the applicant shall submit the application with the clerk of the city, village, or town where the intended place of sale is located.

AB1170,4,23 2. Within 10 days of any change in any fact set forth in an application, the applicant or license holder shall file a written description of the change with the clerk of the city, village, or town where the application was submitted.

AB1170,5,2 3. Any person may inspect applications submitted under this paragraph. The clerk of each city, village, or town where such applications are submitted shall retain all applications submitted under this paragraph, but may destroy all applications that have been retained for 4 years or longer.

AB1170, s. 4 Section 4. 134.65 (1r) of the statutes is created to read:

AB1170,5,5 134.65 (1r) (a) No license under sub. (1) may be issued to any person to whom any of the following applies:

AB1170,5,7 1. Subject to ss. 111.321, 111.322, and 111.335, the person has an arrest record or a conviction record.

AB1170,5,9 2. Subject to ss. 111.321, 111.322, and 111.335, the person has been convicted of a felony, or as a repeat or habitual offender, unless pardoned.

AB1170,5,10 3. The person has not submitted proof as provided under s. 77.61 (11).

AB1170,5,11 4. The person is not 18 years of age or older.

AB1170,5,17 (b) The requirements under par. (a) apply to all partners of a partnership, all members of limited liability company, all agents of a limited liability company or corporation, and all officers of a corporation. Subject to ss. 111.321, 111.322, and 111.335, if a business entity has been convicted of a crime, the entity may not be issued a license under sub. (1) unless the entity has terminated its relationship with the individuals whose actions directly contributed to the conviction.

AB1170, s. 5 Section 5. 134.65 (2) (a) of the statutes is amended to read:

AB1170,5,24 134.65 (2) (a) Except Subject to sub. (1r), and except as provided in par. (b), upon filing of a proper written application a license shall be issued on July 1 of each year or when applied for and continue in force until the following June 30 unless sooner revoked. The city, village or town may charge a fee for the license of not less than $5 nor more than $100 per year which shall be paid to the city, village or town treasurer before the license is issued.

AB1170, s. 6 Section 6. 134.65 (5) of the statutes is amended to read:

AB1170,6,12 134.65 (5) Any person violating this section shall be fined not more than $100 $1,000 nor less than $25 $500 for the first offense and not more than $200 $5,000 nor less than $25 $1,000 or imprisoned not exceeding 180 days or both for the 2nd or subsequent offense. If upon such 2nd or subsequent violation, the person so violating this section was personally guilty of a failure to exercise due care to prevent violation thereof, the person shall be fined not more than $300 nor less than $25 or imprisoned not exceeding 60 days or both. Conviction Upon conviction of a 2nd or subsequent offense, the court shall immediately terminate the license of the person convicted of being personally guilty of such failure to exercise due care and the person shall not be entitled to another license hereunder for a period of 5 years thereafter, nor shall the person in that period act as the servant or agent of a person licensed hereunder for the performance of the acts authorized by such license.

AB1170, s. 7 Section 7. 134.66 (2) (d) of the statutes is created to read:

AB1170,6,16 134.66 (2) (d) No manufacturer, direct marketer, distributor, jobber, subjobber or retailer, or their employees or agents, may provide cigarettes or tobacco products for nominal or no consideration to any person under the age of 18.

AB1170, s. 8 Section 8. 134.66 (3m) of the statutes is created to read:

AB1170,6,20 134.66 (3m) Defense of direct marketer. Proof of all of the following facts by a direct marketer who sells cigarettes or tobacco products to a person under the age of 18 is a defense to any prosecution for a violation under sub. (2) (a):

AB1170,6,22 (a) That the direct marketer used a mechanism, approved by the department of revenue, for verifying the age of the purchaser.

AB1170,6,24 (b) That the purchaser falsely represented that he or she had attained the age of 18 and presented a copy or facsimile of an identification card.

AB1170,7,2 (c) That the name and birthdate of the purchaser, as indicated by the purchaser, matched the name and birthdate on the identification presented under par. (b).

AB1170,7,5 (d) That the sale was made in good faith, in reasonable reliance on the mechanism described in par. (a) and the representation and identification under pars. (b) and (c), and in the belief that the purchaser had attained the age of 18.

AB1170, s. 9 Section 9. 139.30 (4n) of the statutes, as created by 2005 Wisconsin Act 25, is repealed and recreated to read:

AB1170,7,8 139.30 (4n) "Identification card" has the meaning given in s. 134.66 (1) (c).

AB1170, s. 10 Section 10. 139.30 (7) of the statutes is amended to read:

AB1170,7,12 139.30 (7) "Manufacturer" means any person who directly manufactures cigarettes for the purpose of sale, including the authorized agent of a person who directly manufactures cigarettes for the purpose of sale.

AB1170, s. 11 Section 11. 139.30 (8s) of the statutes is created to read:

AB1170,7,16 139.30 (8s) "Person" means any individual, sole proprietorship, partnership, limited liability company, corporation, or association, or any owner of a single-owner entity that is disregarded as a separate entity under ch. 71.

AB1170, s. 12 Section 12. 139.32 (4) of the statutes is amended to read:

AB1170,7,20 139.32 (4) In lieu of stamps the secretary may authorize impressions applied by the use of meter machines. The secretary shall prescribe by rule the type of impression and the kind of machines which may be used.

AB1170, s. 13 Section 13. 139.321 (1) (intro.) of the statutes, as affected by 2005 Wisconsin Act 25, is amended to read:

AB1170,7,25 139.321 (1) (intro.) It is unlawful for any person to purchase or possess cigarettes unless the required stamps are properly affixed as provided in ss. 139.32 (1) and 139.33 (4).

AB1170, s. 14 Section 14. 139.321 (1) (a) 1. of the statutes is amended to read:

AB1170,8,3 139.321 (1) (a) 1. Manufacturers, bonded direct marketers, distributors or warehouse operators possessing valid permits issued by the secretary.

AB1170, s. 15 Section 15. 139.34 (1) (a) of the statutes is amended to read:

AB1170,8,10 139.34 (1) (a) No person may manufacture cigarettes in this state or sell cigarettes in this state as a distributor, manufacturer, jobber, vending machine operator, direct marketer, or multiple retailer and no person may operate a warehouse in this state for the storage of cigarettes for another person without first filing an application for and obtaining the proper permit to perform such operations from the department.

AB1170, s. 16 Section 16. 139.34 (1) (b) of the statutes is repealed.

AB1170, s. 17 Section 17. 139.34 (1) (c) (intro.) of the statutes is amended to read:

AB1170,8,14 139.34 (1) (c) (intro.) Subject to ss. 111.321, 111.322 and 111.335, no No permit under this section may be granted to any person to whom any of the following applies:

AB1170, s. 18 Section 18. 139.34 (1) (c) 3m. of the statutes is created to read:

AB1170,8,17 139.34 (1) (c) 3m. The person has not submitted proof as provided under s. 77.61 (11).

AB1170, s. 19 Section 19. 139.34 (1) (c) 4m. of the statutes is created to read:

AB1170,8,19 139.34 (1) (c) 4m. The person is 18 years of age or older.

AB1170, s. 20 Section 20. 139.34 (1) (cm) of the statutes is created to read:

AB1170,8,24 139.34 (1) (cm) The requirements under par. (c) apply to all partners of a partnership, all members of a limited liability company, all agents, directors, and shareholders of a limited liability company or corporation, and all officers of a corporation.

AB1170, s. 21 Section 21. 139.34 (4) of the statutes is amended to read:

AB1170,9,6 139.34 (4) A separate permit shall be required of and issued to each class of permittee and the holder of any permit shall perform only the operations thereby authorized. Such permit shall not be transferable from one person to another or from one premises to another. A separate permit shall be required for each place where cigarettes are stamped or where cigarettes are stored for sale at wholesale or, through vending machines or multiple retail outlets, or by direct marketing.

AB1170, s. 22 Section 22. 139.34 (6) of the statutes is amended to read:

AB1170,9,11 139.34 (6) A vending machine operator or a multiple retailer may acquire unstamped cigarettes from the manufacturers thereof and affix the stamps to packages or other containers only if the vending machine operator or multiple retailer also holds a permit as a distributor or bonded direct marketer.

AB1170, s. 23 Section 23. 139.34 (8) of the statutes is amended to read:

AB1170,9,18 139.34 (8) The holder of a warehouse permit is entitled to store cigarettes on the premises described in the permit. The warehouse permit shall not authorize the holder to sell cigarettes. Unstamped cigarettes stored in a warehouse for a manufacturer, bonded direct marketer, or distributor may be delivered only to a person holding a permit as a manufacturer or, distributor, or bonded direct marketer who is authorized by the department to purchase and affix tax stamps.

AB1170, s. 24 Section 24. 139.345 (1) (a) (intro.) of the statutes, as created by 2005 Wisconsin Act 25, is amended to read:

AB1170,9,25 139.345 (1) (a) (intro.) No person may sell cigarettes to consumers in this state as a direct marketer or solicit sales of cigarettes to consumers in this state by direct marketing unless the person submits to has obtained a permit from the department the person's name, trade name, address of the person's principal place of business, phone number, e-mail address, and Web site address to make such sales or solicitations. The person shall file an application for a permit under this subsection with the department, in the manner prescribed by the department.

AB1170, s. 25 Section 25. 139.345 (1) (b) of the statutes, as created by 2005 Wisconsin Act 25, is amended to read:

AB1170,10,15 139.345 (1) (b) No person may sell cigarettes as described under this section The department may not issue a permit to a person under par. (a) unless the person certifies to the department, in the manner prescribed by the department, that the person shall acquire stamped cigarettes from a licensed distributor or unstamped cigarettes from the manufacturer thereof, pay the tax imposed under this subchapter on all unstamped cigarettes and affix stamps to the cigarette packages or containers as provided under s. 139.32 (1), store such packages or containers, and sell only such packages or containers to consumers in this state by direct marketing; or acquire cigarettes from a distributor, to the packages or containers of which stamps have been affixed as provided under s. 139.32 (1), and sell only such packages or containers to consumers in this state by direct marketing.