CHAPTER 92 HOUSE BILL No. 2670 An Act concerning cigarettes and tobacco products; relating to the regulation of the sales
thereof; amending K.S.A. 79-3301, 79-3302 and 79-3321 and K.S.A. 1999 Supp. 79-3322
and 79-3391 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 79-3301 is hereby amended to read as follows: 79-
3301. As used in this act:

      (a) ``Carrier'' means one who transports cigarettes from a manufac-
turer to a wholesale dealer or from one wholesale dealer to another.

      (b) ``Carton'' means the container used by the manufacturer of cig-
arettes in which no more than 10 packages of cigarettes are placed prior
to shipment from such manufacturer.

      (c) ``Cigarette'' means any roll for smoking, made wholly or in part
of tobacco, irrespective of size or shape, and irrespective of tobacco being
flavored, adulterated or mixed with any other ingredient if the wrapper
is in greater part made of any material except tobacco.

      (d) ``Consumer'' means the person purchasing or receiving cigarettes
or tobacco products for final use.

      (e) ``Dealer'' means any person who engages in the sale or manufac-
ture of cigarettes in the state of Kansas, and who is required to be licensed
under the provisions of this act.

      (f) ``Dealer establishment'' means any location or premises, other
than vending machine locations, at or from which cigarettes are sold, and
where records are kept.

      (g) ``Director'' means the director of taxation.

      (h) ``Distributor'' means: (1) Any person engaged in the business of
selling tobacco products in this state who brings, or causes to be brought,
into this state from without the state any tobacco products for sale; (2)
any person who makes, manufactures, fabricates or stores tobacco prod-
ucts in this state for sale in this state; or (3) any person engaged in the
business of selling tobacco products without this state who ships or trans-
ports tobacco products to any person in the business of selling tobacco
products in this state.

      (i) ``Division'' means the division of taxation.

      (j) ``License'' means, in addition to the privilege of a licensee to sell
cigarettes or tobacco products in the state of Kansas, the written evidence
of such authority or privilege to so operate as evidenced by any license
issued by the director of taxation.

      (k) ``Licensee'' means any person holding a current license issued
pursuant to this act.

      (l) ``Manufacturer's salesperson'' means a person employed by a cig-
arette manufacturer who sells cigarettes, manufactured by such employer
and procured from wholesale dealers.

      (m) ``Meter imprints'' means tax indicia applied by means of ink print-
ing machines.

      (n)  (1) ``Package'' means a container in which no more than 25 in-
dividual cigarettes are wrapped and sealed by the manufacturer of ciga-
rettes prior to shipment to a wholesale dealer.

      (2) For the purposes of subsections (u), (v) and (w) of K.S.A. 79-3321,
and amendments thereto, ``package'' shall have the meaning ascribed
thereto in 15 U.S.C. § 1332(4).

      (o) ``Person'' means any individual, partnership, society, association,
joint-stock company, corporation, estate, receiver, trustee, assignee, ref-
eree or any other person acting in a fiduciary or representative capacity
whether appointed by a court or otherwise and any combination of in-
dividuals.

      (p) ``Received'' means the coming to rest of cigarettes for sale by any
dealer in the state of Kansas.

      (q) ``Retail dealer'' means a person, other than a vending machine
operator, in possession of cigarettes for the purpose of sale to a consumer.

      (r) ``Sale'' means any transfer of title or possession or both, exchange,
barter, distribution or gift of cigarettes or tobacco products, with or with-
out consideration.

      (s) ``Sample'' means cigarettes or tobacco products distributed to
members of the general public at no cost for purposes of promoting the
product.

      (t) ``Stamps'' means tax indicia applied either by means of water ap-
plied gummed paper or heat process.

      (u) ``Tax indicia'' means visible evidence of tax payment in the form
of stamps or meter imprints.

      (v) ``Tobacco products'' means cigars, cheroots, stogies, periques;
granulated, plug cut, crimp cut, ready rubbed and other smoking tobacco;
snuff, snuff flour; cavendish; plug and twist tobacco; fine cut and other
chewing tobaccos; shorts; refuse scraps, clippings, cuttings and sweepings
of tobacco, and other kinds and forms of tobacco, prepared in such man-
ner as to be suitable for chewing or smoking in a pipe or otherwise, or
both for chewing and smoking. Tobacco products does not include ciga-
rettes.

      (w) ``Vending machine'' means any coin operated machine, contri-
vance or device, by means of which merchandise may be sold.

      (x) ``Vending machine distributor'' means any person who sells ciga-
rette vending machines to a vending machine operator operating vending
machines in the state of Kansas.

      (y) ``Vending machine operator'' means any person who places a
vending machine, owned, leased or operated by such person, at locations
where cigarettes are sold from the machine. The owner or lessee of the
premises upon which a vending machine is placed shall not be considered
the operator of the machine, nor shall the owner or lessee, or any em-
ployee or agent of the owner or lessee be considered an authorized agent
of the vending machine operator, if the owner or lessee does not own or
lease the machine and the owner's or lessee's sole remuneration from the
machine is a flat rental fee or commission based upon the number or
value of cigarettes sold from the machine, or a combination of both.

      (z) ``Wholesale dealer'' means any person who sells cigarettes to other
wholesale dealers, retail dealers, vending machine operators and manu-
facturer's salespersons for the purpose of resale in the state of Kansas.

      (aa) ``Wholesale sales price'' means the original net invoice price for
which manufacturer sells a tobacco product to a distributor, as shown by
the manufacturer's original invoice.

      (bb) ``Importer'' shall have the same meaning ascribed thereto in 26
U.S.C.§ 5702(l).

      (cc) ``Manufacturer'' shall have the same meaning ascribed thereto in
26 U.S.C.§ 5702(d).

      Sec.  2. K.S.A. 79-3302 is hereby amended to read as follows: 79-
3302. (a) K.S.A. 79-3301 through 79-3304, 79-3306, 79-3309, 79-3310,
79-3311, 79-3312, 79-3312a, 79-3313, 79-3316, 79-3321, 79-3322, 79-
3323, 79-3324a, 79-3326, 79-3328, 79-3329, 79-3371, 79-3373, 79-3374,
79-3375, 79-3377, 79-3378, 79-3379, 79-3387, 79-3388, 79-3391, 79-
3392, 79-3393 and, 79-3394 and sections 5 through 8, and amendments
thereto, shall be known and may be cited as the Kansas cigarette and
tobacco products act.

      (b) It is the purpose and intent of this act to regulate the sale of
cigarettes and tobacco products in this state and to impose a tax thereon.

      Sec.  3. K.S.A. 79-3321 is hereby amended to read as follows: 79-
3321. It shall be unlawful for any person:

      (a) To possess, except as otherwise specifically provided by this act,
more than 200 cigarettes without the required tax indicia being affixed as
herein provided.

      (b) To mutilate or attach to any individual package of cigarettes any
stamp that has in any manner been mutilated or that has been heretofore
attached to a different individual package of cigarettes or to have in pos-
session any stamps so mutilated.

      (c) To prevent the director or any officer or agent authorized by law,
to make a full inspection for the purpose of this act, of any place of
business and all premises connected thereto where cigarettes are or may
be manufactured, sold, distributed, or given away.

      (d) To use any artful device or deceptive practice to conceal any vi-
olation of this act or to mislead the director or officer or agent authorized
by law in the enforcement of this act.

      (e) Who is a dealer to fail to produce on demand of the director or
any officer or agent authorized by law any records or invoices required
to be kept by such person.

      (f) Knowingly to make, use, or present to the director or agent thereof
any falsified invoice or falsely state the nature or quantity of the goods
therein invoiced.

      (g) Who is a dealer to fail or refuse to keep and preserve for the time
and in the manner required herein all the records required by this act to
be kept and preserved.

      (h) To wholesale cigarettes to any person, other than a manufacturer's
salesperson, retail dealer or wholesaler who is:

      (1) Duly licensed by the state where such manufacturer's salesperson,
retail dealer or wholesaler is located, or

      (2) exempt from state licensing under applicable state or federal laws
or court decisions including any such person operating as a retail dealer
upon land allotted to or held in trust for an Indian tribe recognized by
the United States bureau of Indian affairs.

      (i) To have in possession any evidence of tax indicia provided for
herein not purchased from the director.

      (j) To fail or refuse to permit the director or any officer or agent
authorized by law to inspect a carrier transporting cigarettes.

      (k) To vend small cigars, or any products so wrapped as to be con-
fused with cigarettes, from a machine vending cigarettes, nor shall a vend-
ing machine be so built to vend cigars or products that may be confused
with cigarettes, be attached to a cigarette vending machine.

      (l) To sell, furnish or distribute cigarettes or tobacco products to any
person under 18 years of age.

      (m) Who is under 18 years of age to purchase or attempt to purchase
cigarettes or tobacco products.

      (n) Who is under 18 years of age to possess or attempt to possess
cigarettes or tobacco products.

      (o) To sell cigarettes to a retailer or at retail that do not bear Kansas
tax indicia or upon which the Kansas cigarette tax has not been paid.

      (p) To sell cigarettes without having a license for such sale as provided
herein.

      (q) To sell a vending machine without having a vending machine dis-
tributor's license.

      (r) Who is a retail dealer to fail to post and maintain in a conspicuous
place in the dealer's establishment the following notice: ``By law, ciga-
rettes and tobacco products may be sold only to persons 18 years of age
and older.''

      (s) To distribute samples within 500 feet of any school when such
facility is being used primarily by persons under 18 years of age unless
the sampling is: (1) In an area to which persons under 18 years of age are
denied access; (2) in or at a retail location where cigarettes and tobacco
products are the primary commodity offered for sale at retail; or (3) at or
adjacent to an outdoor production, repair or construction site or facility.

      (t) To sell cigarettes or tobacco products by means of a vending ma-
chine in any establishment, or portion of an establishment, which is open
to minors, except that this subsection shall not apply to:

      (1) The installation and use by the proprietor of the establishment,
or by the proprietor's agents or employees, of vending machines behind
a counter, or in some place in such establishment, or portion thereof, to
which minors are prohibited by law from having access;

      (2) the installation and use of a vending machine in a commercial
building or industrial plant, or portions thereof, where the public is not
customarily admitted and where machines are intended for the sole use
of adult employees employed in the building or plant; or

      (3) a vending machine which has a lock-out device which is inoper-
able in the continuous standby mode and which requires manual activa-
tion by the person supervising the operation of the machine each time
cigarettes or tobacco products are purchased from the machine.

      (u) To sell or distribute in this state; to acquire, hold, own, possess or
transport for sale or distribution in this state; or to import or cause to be
imported, into this state for sale or distribution in this state:

      (1) Any cigarettes the package of which (A) bears any statement, label,
stamp, sticker or notice indicating that the manufacturer did not intend
the cigarettes to be sold, distributed or used in the United States, including
but not limited to, labels stating ``For Export Only'', ``U.S. Tax-Exempt'',
``For Use Outside U.S.'' or similar wording; or (B) does not comply with
(i) all requirements imposed by or pursuant to federal law regarding
warnings and other information on packages of cigarettes manufactured,
packaged or imported for sale, distribution or use in the United States,
including but not limited to the precise warning labels specified in the
federal cigarette labeling and advertising act, 15 U.S.C. 1333; and (ii) all
federal trademark and copyright laws;

      (2) any cigarettes imported into the United States in violation of 26
U.S.C. 5754 or any other federal law, or federal regulations implementing
such laws;

      (3) any cigarettes that such person otherwise knows or has reason to
know the manufacturer did not intend to be sold, distributed or used in
the United States; or

      (4) any cigarettes for which there has not been submitted to the sec-
retary of the U.S. department of health and human services the list or lists
of the ingredients added to tobacco in the manufacture of such cigarettes
required by the federal cigarette labeling and advertising act, 15 U.S.C.
1335a.

      (v) To alter the package of any cigarettes, prior to sale or distribution
to the ultimate consumer, so as to remove, conceal or obscure:

      (1) Any statement, label, stamp, sticker or notice described in subsec-
tion (u) of K.S.A. 79-3321, and amendments thereto; or

      (2) any health warning that is not specified in, or does not conform
with, the requirements of, the federal cigarette labeling and advertising
act, 15 U.S.C. 1333.

      (w) To affix any stamp required pursuant to K.S.A. 79-3311, and
amendments thereto, to the package of any cigarettes described in sub-
section (u) or altered in violation of subsection (v).

      Sec.  4. K.S.A. 1999 Supp. 79-3322 is hereby amended to read as
follows: 79-3322. (a) Any person who violates any of the provisions of this
the Kansas cigarette and tobacco products act, except as otherwise pro-
vided in this act, shall be guilty of a misdemeanor and upon conviction
shall be punished by a fine of not more than $1,000 or imprisonment for
not more than one year, or by both. In addition thereto any person found
liable for any license fee or tax imposed under the provisions of this act
shall be personally liable for such license fee or tax plus a penalty in an
amount equal to 100% thereof.

      (b)  (1) It is a class B person misdemeanor punishable by a minimum
fine of $200 for any person to: (A) Sell, give or furnish any cigarettes or
tobacco products to any person under 18 years of age; or (B) buy any
cigarettes or tobacco products for any person under 18 years of age.

      (2) It shall be a defense to a prosecution under this subsection if: (A)
The defendant is a licensed retail dealer, or employee thereof, or a person
authorized by law to distribute samples; (B) the defendant sold, furnished
or distributed the cigarettes or tobacco products to the person under 18
years of age with reasonable cause to believe the person was of legal age
to purchase or receive cigarettes or tobacco products; and (C) to purchase
or receive the cigarettes or tobacco products, the person under 18 years
of age exhibited to the defendant a driver's license, Kansas nondriver's
identification card or other official or apparently official document con-
taining a photograph of the person and purporting to establish that the
person was of legal age to purchase or receive cigarettes or tobacco prod-
ucts.

      (3) It shall be a defense to a prosecution under this subsection if: (A)
The defendant engages in the lawful sale, furnishing or distribution of
cigarettes or tobacco products by mail; and (B) the defendant sold, fur-
nished or distributed the cigarettes or tobacco products to the person by
mail only after the person had provided to the defendant an unsworn
declaration, conforming to K.S.A. 53-601, and amendments thereto, that
the person was 18 or more years of age.

      (4) For purposes of this subsection the person who violates this sub-
section shall be the individual directly selling, furnishing or distributing
the cigarettes or tobacco products to any person under 18 years of age or
the retail dealer who has actual knowledge of such selling, furnishing or
distributing by such individual or both.

      (c) Violation of subsection (m) or (n) of K.S.A. 79-3321, and amend-
ments thereto, is a cigarette or tobacco infraction for which the fine is
$25. In addition, the judge may require the juvenile to appear in court
with a parent or legal guardian.

      (d) Any agent, employees or others who aid, abet or otherwise par-
ticipate in any way in the violation of this the Kansas cigarette and tobacco
products act or in any of the offenses hereunder punishable shall be guilty
and punished as principals to the same extent as any person violating this
act.

      New Sec.  5. On the first business day of each month, each person
licensed to affix the state tax stamp to cigarettes shall file with the director,
for all cigarettes imported into the United States to which such person
has affixed the tax stamp in the preceding month:

      (a) A copy of (1) the permit issued pursuant to the internal revenue
code, 26 U.S.C. 5713, to the person importing such cigarettes into the
United States allowing such person to import such cigarettes; and (2) the
customs form containing, with respect to such cigarettes, the internal
revenue tax information required by the U.S. bureau of alcohol, tobacco
and firearms;

      (b) a statement, signed by such person under penalty of perjury,
which shall be treated as confidential by the commissioner and exempt
from disclosure under the open records act, K.S.A. 45-215 through 45-
223, and amendments thereto, identifying the brand and brand styles of
all such cigarettes, the quantity of each brand style of such cigarettes, the
supplier of such cigarettes, and the person or persons, if any, to whom
such cigarettes have been conveyed for resale; and

      (c) a statement, signed by an officer of the manufacturer or importer
under penalty of perjury, certifying that the manufacturer or importer
has complied with (1) the package health warning and ingredient report-
ing requirements of the federal cigarette labeling and advertising act, 15
U.S.C. 1333 and 1335a, with respect to such cigarettes; and (2) the pro-
visions of K.S.A. 50-6a01 et seq., and amendments thereto, including a
statement indicating whether the manufacturer is, or is not, a participat-
ing tobacco product manufacturer within the meaning of K.S.A. 50-6a01
et seq., and amendments thereto.

      New Sec.  6. (a) In addition to or in lieu of any other civil or criminal
penalty provided by law, the director, upon a finding that a licensee has
violated the provisions of subsection (u), (v) or (w) of K.S.A. 79-3321, and
amendments thereto, or has failed to comply with the provisions of sec-
tion 5, and amendments thereto, or any rule and regulation adopted pur-
suant thereto, may revoke or suspend the license of any licensee in the
manner provided by K.S.A. 79-3309, and amendments thereto; the di-
rector also may impose a civil fine in an amount not to exceed the greater
of 500% of the retail value of the cigarettes involved or $5,000. Such fine
shall be imposed in the manner provided by K.S.A. 79-3391, and amend-
ments thereto.

      (b) Any cigarettes that are acquired, held, owned, possessed, trans-
ported, imported, sold or distributed in this state in violation of subsection
(u), (v) or (w) of K.S.A. 79-3321, and amendments thereto, or has failed
to comply with the provisions of section 5, and amendments thereto, shall
be deemed contraband under K.S.A. 79-3323, and amendments thereto,
and shall be subject to seizure and forfeiture as provided therein and in
K.S.A. 79-3324a, and amendments thereto. All such cigarettes seized and
forfeited shall be destroyed. Such cigarettes shall be deemed contraband
whether the violation of this act is knowing or otherwise.

      New Sec.  7. (a) The provisions of subsection (u), (v) or (w) of K.S.A.
79-3321 and section 5, and amendments thereto, shall be enforced by the
director. At the request of the director or the director's duly authorized
agent, the Kansas bureau of investigation and all local law enforcement
agencies shall enforce such provisions. The attorney general shall have
concurrent power with the district and county attorneys of the state to
enforce such provisions.

      (b) For the purpose of enforcing the provisions of subsection (u), (v)
or (w) of K.S.A. 79-3321 and section 5, and amendments thereto, the
director and any agency to which the director shall have delegated en-
forcement responsibility pursuant to subsection (a) may request infor-
mation from any state or local agency, and may share information with,
and request information from, any federal agency and any agency of any
other state or any local agency thereof.

      (c) Any person who may be damaged or injured by a violation of the
provisions of subsection (u), (v) or (w) of K.S.A. 79-3321 or section 5, and
amendments thereto, shall have a cause of action against any person caus-
ing such damage or injury. Such action may be brought by any person
who is injured in such person's business or property by reason of any
violation of such provisions, regardless of whether such injured person
dealt directly or indirectly with the defendant. The plaintiff in any action
commenced hereunder in the district court of the county wherein such
plaintiff resides, or the district court of the county of the defendant's
principal place of business, may sue for and recover treble the damages
sustained. In addition, any person who is threatened with injury or ad-
ditional injury by reason of any person's violation may commence an ac-
tion in such district court to enjoin any such violation, and any damages
suffered may be sued for and recovered in the same action in addition to
injunctive relief. In any action commenced under this act, the plaintiff
may be allowed reasonable attorney fees and costs. The remedies pro-
vided herein shall be alternative and in addition to any other remedies
provided by law.

      New Sec.  8. The provisions of subsection (u), (v) or (w) of K.S.A. 79-
3321 and section 5, and amendments thereto, shall not apply to:

      (a) Cigarettes allowed to be imported or brought into the United
States for personal use; and

      (b) cigarettes sold or intended to be sold as duty-free merchandise
by a duty-free sales enterprise in accordance with the provisions of 19
U.S.C. 1555(b) and any implementing regulations, except that this act
shall apply to any such cigarettes that are brought back into the customs
territory for resale within the customs territory.

      New Sec.  9. A violation of subsection (u), (v) or (w) of K.S.A. 79-
3321 or section 5, and amendments thereto, shall constitute an unlawful
trade practice as provided in K.S.A. 50-626, and amendments thereto. In
addition to any remedies or penalties set forth in the Kansas cigarette and
tobacco products act, any remedy or penalty available for a violation of
K.S.A. 50-626, and amendments thereto, also may be imposed for such
violation.

      Sec.  10. K.S.A. 1999 Supp. 79-3391 is hereby amended to read as
follows: 79-3391. (a) In addition to or in lieu of any other civil or criminal
penalty provided by law, the secretary of revenue or the secretary's des-
ignee, upon a finding that a licensee under this act has violated any pro-
vision of this act or any provision of any rule and regulation of the sec-
retary of revenue adopted pursuant to this act shall impose on such
licensee a civil fine not exceeding $1,000 for each violation.

      (b) It shall be unlawful for any person, directly or indirectly, to: (1)
Sell, give or furnish any cigarettes or tobacco products to any person
under 18 years of age; or (2) buy any cigarettes or tobacco products for
any person under 18 years of age. In determining the fine to be imposed
under this subsection by a licensed retail dealer whose employee sold,
furnished or distributed the cigarettes or tobacco products, the secretary
of revenue or the secretary's designee shall consider it to be a mitigating
circumstance if the employee had completed a training program, ap-
proved by the secretary of revenue or the secretary's designee, in avoiding
sale, furnishing or distributing of cigarettes and tobacco products to per-
sons under 18 years of age.

      (c) No fine shall be imposed pursuant to this section except upon the
written order of the secretary of revenue or the secretary's designee to
the licensee who committed the violation. Such order shall state the vi-
olation, the fine to be imposed and the right of the licensee to appeal the
order. Such order shall be subject to appeal and review in the manner
provided by the Kansas administrative procedure act.

      (d) Any fine collected pursuant to this section shall be paid to the
state treasurer, who shall deposit the entire amount in the state treasury
and credit it to the cigarette and tobacco products regulation fund.

      (e) There is hereby created, in the state treasury, the cigarette and
tobacco products regulation fund. Moneys in the fund shall be expended
only for the enforcement of this act and rules and regulations adopted
pursuant to this act. Such expenditures shall be made in accordance with
appropriation acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the secretary of revenue or a
person designated by the secretary.

      (f) If a person violates subsection (b) for a second or subsequent oc-
currence within a three-year period, the secretary may impose a gradu-
ated fine upon such person for the second or subsequent occurrence. For
the purposes of imposing a fine under this section, if three or more years
have elapsed since a person has been found to have violated the provisions
of subsection (b), such person shall be treated as never having violated
subsection (b).

 Sec.  11. K.S.A. 79-3301, 79-3302 and 79-3321 and K.S.A. 1999 Supp.
79-3322 and 79-3391 are hereby repealed.
 Sec.  12. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 16, 2000.
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