AN ACT concerning the sale of tobacco products, amending P.L.1966, c.36 and P.L.1948, c.65 and supplementing Tide 26 of the Revised Statutes.

   BE IT ENACTED by the Senate and General. Assembly of the State of New Jersey:

   1. Section 7 of P.L.1966, c.36 (C.26:2F-7) is amended to read as follows:

   7. (a) There is hereby established a special projects and development fund which shall consist of all funds appropriated, or otherwise made available for the purposes set forth in this section. The commissioner, with the approval of the Public Health Council, may make grants from the special projects and development fund to local health agencies, to hospitals, and to voluntary health agencies to provide State health assistance for new health services and for special health projects in order to stimulate continued development of health services and to assure the citizens of New Jersey the benefits of the most advanced health protection techniques.

   (b) Except as provided in subsection (c) of this section, grants fron the special projects and development fund for specific purposes shall be made on an annual basis for a period not in excess of 5 years and such grants shall be in diminishing amounts during this period. The commissioner shall determine the conditions applicable to each such grant including the extent of local financial participation to be required. Grants from the special projects and development fund to voluntary health agencies shall not exceed 40% of said fund.

   (c) (1) Grants from the special projects and development fund shall be made on an annual basis to local health agencies for local enforcement efforts concerning the sale and commercial distribution of tobacco products to persons under the age of 18 years, in an amount determined by the commissioner. The grants shall be distributed based on the number of cigarette retail dealer and vending machine licenses issued within a local health agency's jurisdictional authority in order to ensure Statewide coverage and Statewide consistency of enforcement efforts, except that the commissioner may designate up to 5% of available fiinds, annually, for incentive grants to local health agencies to enhance enforcement efforts.

   Each grant recipient shall report quarterly to the commissioner on the number of compliance check inspections it has completed and the results of those compliance checks. The commissioner shall determine any other conditions applicable to the grants.

   (2) Beginning in 1999, notwithstanding the provisions of paragraph (1) of this subsection to the contrary, the commissioner may make grants from the special projects and development fund to public and private local agencies to reduce teenage use of addictive substances.

(cf. P.L.1966, c.36, s.7)

   2. (New section) a. The Commissioner of Health is authorized to enforce the provisions of N.J.S.2-A:170-51 with respect to the prohibition on the sale and commercial distribution of tobacco products to persons under 18 years of age. The commissioner may delegate the enforcement authority provided in this section to local health agencies subject to the availability of sufficient funding. The commissioner shall report quarterly to the Legislature on the enforcement program's progress, use of grants awarded pursuant to section 7 of P.L.1966, c.36 (C.26:2F-7), results of enforcement efforts and other matters the commissioner deems appropriate.

   b. The Department of the Treasury shall provide the commissioner with information about retail tobacco dealer licensees necessary to carry out the purpose of this section.

   3. Section 202 of P.L.1948, c-65 (C.54:40A-4) is amended to read as follows:

   202. a. All licenses shall be issued by the director, who shall make rules and regulations respecting applications therefor and issuance thereof.

   (1) Individuals having any interest whatsoever in a proprietorship or company.

   (2) Partners of a partnership, regardless of percentage.

   (3) Joint venturers in a joint venture.

   (4) Officers, directors, and all stockholders holding directly or indirectly a beneficial interest in more than 5% of the outstanding shares of a corporation.

   (5) Employees receiving in excess of $30,000.00 per annum compensation whether as salary, commission, bonus or otherwise and persons who, in the judgment of the director are employed, in a supervisory capacity or have the power to make or substantially affect discretionary business judgments of the applicant entity with regard to the cigarette business.

   (6) Other persons who the director establishes have the ability to control the applicant entity through any means including but not limited to, contracts, loans, mortgages or pledges of securities where such control is inimical to the policies of this act because such person is a career offender or a member of a career offender cartel as defined in paragraph (2) of subsection e of this section. Individuals licensed pu rsuant to the "Casino Control Act," P.L.1977, c. 110 (C.5:12-1 et seq.) shall only be required to produce evidence of said licensure in satisfaction of the foregoing.

   The provisions in this subsection as to wholesale dealers, retail dealers operating more than nine cigarette vending machines, and retail dealers who sell cigarettes at retail at more than nine premises do not apply to retail grocery stores and supermarkets primarily engaged in the self-service sale of foods and household supplies for off-premises consumption or to restaurants, hotels and motels operated by national corporations with such premises in six or more states and primarily engaged in the sale of foods for retail consumptionor in the rental of rooms for lodging.

   c. The director shall not issue any license under this act where he has reasonable cause to believe that anyone required to submit information under this act has willfully withheld information requested of him for the purpose of determining the eligibility of the applicant to receive a license or where the director has reasonable cause to believe that information submitted in the application is false and misleading and is not made in good faith.

   d. The director shall not issue any license under this act where he has reasonable cause to believe that anyone required to be licensed or anyone required to submit information under this act, has been convicted of any offense in any jurisdiction which would be at the time of conviction a crime involving moral turpitude.

   It is further provided that any applicant or person required to submit information who has a charge pending pursuant to any of the foregoing shall disclose that fact to the director. The director may then withhold action on new applications or, in the case of an application for the renewal of a license, issue a temporary license until there has been a disposition of the charge. The director shall have the discretion to waive the prohibition against licensure herein provided upon the presentation of proof that a period of not less than five yew has elapsed since the last conviction or the expiration of any period of incarceration imposed with respect thereto.

   e. The director shall not issue any license where the applicant or anyone required to submit information has been identified as a career offender or a member of a career offender cartel in such a manner as to create a reasonable belief that the association is of such a nature as to be inimical to the policies of this act or to the taxation, distribution, and sale of cigarettes within the State. The director may request the Attorney General for advice respecting whether a person is a "career offender" within the meaning of this subsection, or is a "contumacious defiant" within the meaning of subsection f. of this section.

   As used in this subsection:

   (1) "career offender" means any person whose behavior is pursued in an occupational manner or context for the purpose of economic gain, utilizing such methods as are deemed criminal violations of the public policy of this State; and (2) "career offender cartel" means any group of persons who operate together as career offenders.

   f. The director shall not issue any license where the applicant or anyone required to submit information has been found to be contumaciously defiant before any legislative investigative body or other official investigative body of this State or of the United States when such body is engaged in the investigation of organized crime, official corruption or the cigarette industry itself.

   g. Each such license shall lapse on March 31 of the period for which it is issued, and each such license shall be continued annually upon the conditions that the licansee shall have paid the required fee and complied with all the provisions of this act and the rules and regulations of the director made pursuant thereto.

   h. For each license issued a distributor there shall be paid to the director a fee of $350.00. If a distributor sells or inten6le sell cigarettes at two or more places of business, whether established or temporary. a separate license shall be required for each place of business. Each license, or certificate, thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director. The director shall require each licensed distributor to file with him a bond in an amount not less than $6,000.00 to guarantee the proper performance of his duties and the discharge of his liabilities under this act. The bond shall, be executed by such licensed distributor as principal, and by a corporation approved by the director and duly authorized to engage in business as a surety company in the State of New Jersey, as surety. The bond shall run concurrently with the distributors license.

   For each license issued to a manufacturer, and for each continuance thereof, there shall be paid to the director a fee of $10.00.

   For each license issued to a manufacturer's representative, and for each continuance thereof, there shall be paid to the director a fee of $5.00.

For each license issued to a wholesale dealer there shall be paid to the director a fee of $250.00. If a wholesale dealer sells or intends to sell cigarettes at two or more places of business, whether established or temporary, a separate license shall be required for each place of business. Each license, or certificate thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director.

For each license issued to a retail dealer and for each continuance thereof, excepting a retail dealer operating a cigarette vending machine, there shall be paid to the director a fee of $40 in 1996 and $50 in 1997 and each year thereafter. For each license issued to a retail dealer operating a vending machine for the sale of cigarettes and for each continuance thereof, them shall be paid to the director a fee of $40 in 1996 and $50 in 1997 and each year thereafter. Of the license fee of $40 and $50, respectively, $30 shall be credited in 1996 and $40 shall be credited in 1997 and each year thereafter to the special projects and development fund in the Department of Health established pursuant to section 7 of P.L.1966, c.36 (C.26:2F-7) for the purposes specified therein, and $5 shall be credited each year beginning 1996 to the division for administrative costs, associated with the requirements established pursuant to subsection i. of this section and section 2 of P.L. ,C. (C. ) (pending. before the Legislature, as this bill). The director shall determine and certify to the State Treasurer on a monthly basis the amount of revenues collected by the director which are to be credited to the special projects and development fund in the Department of Health.

   If a retail dealer sells or intends to sell cigarettes at two or more places of business, whether established or temporary, or whether in the same building or not, a separate license shall be required for each place of business. Each vending machine for the sale of cigarettes shall be separately licensed and be deemed a separate place of business. Each license, or certificate thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director.

   Any person licensed only as a distributor or as a manufacturer or as a manufacturer's representative or as a wholesale dealer or as a retail dealer shall not operate in any other capacity except under that for which he is licensed herein, unless the appropriate license or licenses therefor are first secured.

   For each license issued to a consumer and for each continuance thereof them shall be paid to the director a fee of $1.00. Each license, or certificate thereof, or such other evidence of license as may be prescribed by the director, shall be so kept by the consumer as to be readily available for inspection.

   No license shall be issued to any person except upon the payment of the full fee therefor, any statute or exemptions to the contrary notwithstanding. No license shall be assignable or transferrable, except as hereinafter provided, but in the case of death, bankruptcy, receivership, or incompetency of the license, or if for any other reason whatsoever the business of the licensee shall devolve upon another by operation of law, the director may, in his discretion, extend said license for a limited time to the executor, administrator, trustee, receiver, or person upon whom the same has devolved. A purchaser or assignee of a licensed wholesaler or licensed distributor, or any other person upon whom the business of a licensed wholesaler or licensed distributor shall devolve by operation of law, upon application to the director, be entitled to an assignment or transfer of the wholesale or distributor license for the balance of the existing license period upon payment of a transfer fee of $5.00 and subject to his qualification to be a licensed wholesaler or licensed distributor under the provisions of this act. The license issued for each vending machine for the sale of cigarettes may be transfened from machine to machine in the same ownership. No refund of the license fee shall be paid to any person upon the surrender or revocation of any license except a license fee paid or collected in error. But, upon payment of $1.00 fee, there may be obtained (1) a duplicate license, or certificate thereof, in the event the original is lost, destroyed or defaced, and (2) an amended license, or certificate thereof, upon a change in the location of the place of business of any distributor or dealer.

   i. The director shall require an applicant for a cigarette retail dealer license, including a license to operate a vending machine for the sale of cigarettes, to include on the application the address of the place of business where the cigarettes will be sold or the address where the vending machine will be located, as the case may be.

   If the place of business or the vending machine is moved to a different address than that provided on the license application, the licensee shall notify the director within 30 days of the change of address. (cf- P.L. 1987, c. 37, s.1)

   4. This act shall take effect January 1, 1996.