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NO. 101. AN ACT RELATING TO GRAY MARKETED CIGARETTES.

(H.748)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. FINDINGS

The General Assembly hereby finds that:

(1) Cigarette smoking presents serious public health concerns to the state and to the citizens of the state. The U.S. Surgeon General has determined that smoking causes lung cancer, heart disease, other serious diseases, and that there are hundreds of thousands of tobacco-related deaths each year. These diseases often do not appear until many years after the person in question begins smoking.

(2) It is the policy of Vermont that consumers be adequately informed about the adverse health effects of cigarette smoking by including the federally-mandated warning notices on each package of cigarettes.

(3) It is the policy of Vermont that manufacturers and importers of cigarettes shall not make any material misrepresentation of fact regarding the health consequences of using cigarettes, including compliance with applicable federal laws, regulations, and policies.

(4) It is the intent of the legislature to align state and federal laws, regulations, and policies relating to the manufacture, importation, and marketing of cigarettes; specifically, the federal Cigarette Labeling and Advertising Act (15 U.S.C. Sec. 1331 et seq.) and 26 U.S.C. § 5754.

(5) The legislature finds that consumers and retailers purchasing cigarettes are entitled to be fully informed about any adverse health effects of cigarette smoking by inclusion of warning notices on each package of cigarettes and to be assured through appropriate enforcement measures that cigarettes they purchase in the state were manufactured for consumption within the United States.

Sec. 2. 32 V.S.A. § 7786 is added to read:

§ 7786. GRAY MARKETED CIGARETTES

(a) No person shall affix a cigarette stamp to or sell or offer for sale in this state any package or container of cigarettes if:

(1) the container or package does not comply with all the requirements of the federal Cigarette Labeling and Advertising Act (15 U.S.C. Sec. 1331 et seq.) for the placement of labels, warnings, or any other information upon a package of cigarettes that is to be sold within the United States;

(2) the container or package has been imported into the United States after January 1, 2000, in violation of 26 U.S.C. § 5754;

(3) the container or package, including a container of individually-stamped containers or packages 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; or

(4) the container or package has been altered by making or deleting the wording described in subdivision (3) of this subsection.

(b) Any cigarettes described in subdivisions (a)(1), (2), (3) or (4) of this section and found in this state are declared to be contraband goods and may be seized without a warrant by the commissioner, the commissioner's agents or employees, or by any peace officer of this state when directed by the commissioner to do so, unless the owner of the cigarettes produces sufficient evidence that the cigarettes are in transit through the state for sale outside the United States. Nothing herein shall be construed to require the commissioner to confiscate cigarettes when the commissioner shall have reason to believe that the owner thereof has possession of the same for personal consumption. Any cigarettes seized under this section shall be destroyed by the commissioner. The seizure of any cigarettes under the provisions of this section shall not relieve any person from a fine or other penalty for violation of this chapter.

(c) A violation of any provision of this section shall also constitute an unfair or deceptive act and practice in commerce prohibited under section 2453 ofTitle 9, and shall be subject to enforcement and to the rights and remedies provided for under chapter 63 of Title 9.

(d) Any person may bring an action for appropriate injunctive or other equitable relief for a violation of this section; actual damages, if any, sustained by reason of the violation; and, as determined by the court, interest on the damages from the date of the complaint, taxable costs and reasonable attorney’s fees. If the trier of fact finds that the violation is flagrant, it may

increase recovery to any amount not in excess of three times the actual damages sustained by reason of the violation.

Approved: May 2, 2000