AB249: Bill Text

LRB-1126/1

JK:lmk:rs

2005 - 2006 LEGISLATURE

2005 Assembly BILL 249

March 18, 2005 - Introduced by Representatives Molepske, Hines, Lehman, Ainsworth, Black, Bies, Berceau, Gunderson, Pope-Roberts, Sheridan, Hahn, Albers, Ott, Colon and Seidel, cosponsored by Senators Roessler, Hansen and Lassa. Referred to Committee on State Affairs.

AB249,2,2 An Act to repeal 139.32 (4), 139.34 (1) (b) and 139.34 (1) (c) 1. to 6.; to amend 134.65 (1), 134.65 (2) (a), 134.65 (5), 134.66 (2) (a), 134.66 (2) (am), 134.66 (2) (e), 139.30 (3), 139.30 (10), 139.32 (1), 139.32 (5), 139.32 (5m), 139.32 (6), 139.321 (1) (intro.), 139.321 (1) (a) 1., 139.33 (3), 139.34 (1) (a), 139.34 (1) (c) (intro.), 139.34 (4), 139.34 (6), 139.34 (8), 139.35 (1), 139.37 (1) (a), 139.38 (1), 139.38 (2), 139.395, 139.40 (2), 139.44 (3), 139.44 (4), 139.44 (7), 139.44 (8) (a) and (b), 139.45, 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); and to create 20.566 (1) (gc), 134.65 (1r), 134.66 (1) (am), 134.66 (3m), 139.30 (1m), 139.30 (2n), 139.30 (2p), 139.30 (8s), 139.34 (1) (c) 1m., 139.34 (1) (c) 2m., 139.34 (1) (c) 3m., 139.34 (1) (cm), 139.345, 139.38 (1m), 139.44 (6m), 139.75 (3g), 139.75 (3r), 139.75 (4) (cm), 139.75 (5s), 139.76 (3), 139.78 (1m) and 139.795 of the statutes; relating to: selling cigarettes and tobacco products by direct marketing, granting rule-making authority, making an appropriation, 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). Also, a person may not sell tobacco products in this state as a distributor or subjobber without having a permit from DOR. A "jobber" is any person who acquires cigarettes from manufacturers or distributors, stores the cigarettes, and sells the cigarettes to retailers for resale. A "subjobber" is any person, other than a manufacturer or distributor, who buys tobacco products from a distributor and who sells such products to any person other than the ultimate consumer.

This bill prohibits a direct marketer from selling cigarettes or tobacco products to consumers in this state without having the appropriate permit from DOR. Under the bill, "direct marketer" is defined as any person who solicits or sells cigarettes or tobacco products to consumers in this state by direct marketing. The bill defines "direct marketing" as publishing or making accessible an offer for the sale of cigarettes or tobacco products to consumers in this state, or selling cigarettes or tobacco products to consumers in this state, using any means by which the consumer is not physically present at the time of sale on a premise that sells cigarettes or tobacco products, including using newspapers, magazines, radio or television broadcasts, mailings, the telephone, or the Internet.

A direct marketer who sells cigarettes to consumers in this state must apply to DOR for a permit and submit a fee with the permit application based on the number of cigarettes that the direct marketer sells annually to consumers in this state. If the direct marketer sells no more than 30,000 cigarettes annually to consumers in this state, the fee is $1,000. If the direct marketer sells more than 30,000 but less than 600,001 cigarettes annually to consumers in this state, the fee is $5,000. If the direct marketer sells more than 600,000 cigarettes annually to consumers in this state, the fee is $10,000. A direct marketer who sells tobacco products to consumers in this state must apply to DOR for a permit and submit a $500 fee with the application. Permits issued to direct marketers expire each year on December 31.

Under the bill, DOR will not issue a permit to a direct marketer unless the direct marketer certifies to DOR that all sales of cigarettes or tobacco products to consumers in this state will be credit card or personal check transactions; that the invoices for all shipments of cigarettes or tobacco products will bear the direct marketer's name, address, and permit number; and that the direct marketer will provide DOR any information that DOR considers necessary for cigarette and tobacco products tax and permit purposes. The direct marketer may not sell any cigarettes or tobacco products unless the sales tax, use tax, cigarette tax, or tobacco products tax, as appropriate, has been paid on the sale of the cigarettes or tobacco products. In addition, a direct marketer may not sell cigarettes or tobacco products in this state unless the direct marketer has a mechanism, approved by DOR, for verifying the age of the purchaser, and the direct marketer receives from the purchaser, at the time of purchase, a copy or facsimile of a government issued identification and the name specified on the identification matches the name of the purchaser.

Under the bill, cigarettes and tobacco products may not be shipped to a person who is under 18 years of age and may not be shipped to a post-office box.

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. The city, village, or town may charge not less than $5 annually nor more than $100 annually for such a license. Under the bill, no city, village, or town may issue such a license to any person who has an arrest or conviction record related to selling cigarettes or tobacco products or who has not submitted proof to the city, village, or town that he or she holds a valid retailer's permit issued by DOR.

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:

AB249, s. 1 Section 1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

AB249, s. 2 Section 2. 20.566 (1) (gc) of the statutes is created to read:

AB249,4,2 20.566 (1) (gc) Administration of cigarette and tobacco product direct marketing permits. From the moneys received from permits issued and penalties assessed under ss. 139.345, 139.40 (2), and 139.795, the amounts in the schedule for enforcing and administering cigarette and tobacco product direct marketing permits and penalties under ss. 139.345, 139.40 (2), and 139.795.

AB249, s. 3 Section 3. 134.65 (1) of the statutes is amended to read:

AB249,4,11 134.65 (1) No person, except a person who holds a valid permit under s. 139.345 or 139.795 and whose business premises is not physically located in this state, 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 without first obtaining a license from the clerk of the city, village or town wherein such privilege is sought to be exercised.

AB249, s. 4 Section 4. 134.65 (1r) of the statutes is created to read:

AB249,4,14 134.65 (1r) (a) No license under sub. (1) may be issued to any person to whom any of the following applies:

AB249,4,16 1. Subject to ss. 111.321, 111.322, and 111.335, the person has an arrest record or a conviction record.

AB249,4,18 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.

AB249,4,19 3. The person has not submitted proof as provided under s. 77.61 (11).

AB249,4,25 (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.

AB249, s. 5 Section 5. 134.65 (2) (a) of the statutes is amended to read:

AB249,5,7 134.65 (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.

AB249, s. 6 Section 6. 134.65 (5) of the statutes is amended to read:

AB249,5,20 134.65 (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 shall be fined 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 on a 2nd or subsequent offense 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.

AB249, s. 7 Section 7. 134.66 (1) (am) of the statutes is created to read:

AB249,5,22 134.66 (1) (am) "Direct marketer" has the meaning given in s. 139.30 (2n).

AB249, s. 8 Section 8. 134.66 (2) (a) of the statutes is amended to read:

AB249,6,7 134.66 (2) (a) No retailer, direct marketer, manufacturer, distributor, jobber or subjobber, no agent, employee or independent contractor of a retailer, direct marketer, manufacturer, distributor, jobber or subjobber and no agent or employee of an independent contractor may sell or provide for nominal or no consideration cigarettes or tobacco products to any person under the age of 18, except as provided in s. 254.92 (2) (a). A vending machine operator is not liable under this paragraph for the purchase of cigarettes or tobacco products from his or her vending machine by a person under the age of 18 if the vending machine operator was unaware of the purchase.

AB249, s. 9 Section 9. 134.66 (2) (am) of the statutes is amended to read:

AB249,6,16 134.66 (2) (am) No retailer, direct marketer, manufacturer, distributor, jobber, subjobber, no agent, employee or independent contractor of a retailer, direct marketer, manufacturer, distributor, jobber or subjobber and no agent or employee of an independent contractor may provide for nominal or no consideration cigarettes or tobacco products to any person except in a place where no person younger than 18 years of age is present or permitted to enter unless the person who is younger than 18 years of age is accompanied by his or her parent or guardian or by his or her spouse who has attained the age of 18 years.

AB249, s. 10 Section 10. 134.66 (2) (e) of the statutes is amended to read:

AB249,6,19 134.66 (2) (e) No retailer or direct marketer may sell cigarettes in a form other than as a package or container on which a stamp is affixed under s. 139.32 (1).

AB249, s. 11 Section 11. 134.66 (3m) of the statutes is created to read:

AB249,6,23 134.66 (3m) Defense of direct marketer. Proof of any 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):

AB249,6,25 (a) That the direct marketer used a mechanism, approved by the department of revenue, for verifying the age of the purchaser.

AB249,7,2 (b) That the purchaser falsely represented that he or she had attained the age of 18 and presented a copy or facsimile of a government issued identification.

AB249,7,4 (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).

AB249,7,7 (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.

AB249, s. 12 Section 12. 139.30 (1m) of the statutes is created to read:

AB249,7,11 139.30 (1m) "Consumer" means any individual who receives cigarettes for his or her personal use or consumption or any individual who has title to or possession of cigarettes for any purpose other than for sale or resale.

AB249, s. 13 Section 13. 139.30 (2n) of the statutes is created to read:

AB249,7,14 139.30 (2n) "Direct marketer" means any person who solicits or sells cigarettes to consumers in this state by direct marketing.

AB249, s. 14 Section 14. 139.30 (2p) of the statutes is created to read: