ENROLLED SENATE
BILL NO. 608	By:	Anderson of the Senate

			and

		Jackson of the House

An Act relating to revenue and taxation; amending 68 O.S. 2001, Sections 113, as amended by Section 16, Chapter 504, O.S.L. 2004, 304, as last amended by Section 6, Chapter 479, O.S.L. 2005, 305, as last amended by Section 8, Chapter 378, O.S.L. 2008, 309, 312, Section 4, Chapter 475, O.S.L. 2003, as last amended by Section 6, Chapter 378, O.S.L. 2008, 316, as last amended by Section 7, Chapter 378, O.S.L. 2008, 348, 350.1, Section 4, Chapter 266, O.S.L. 2004, Section 5, Chapter 266, O.S.L. 2004, 403.1, 413, 415, 418, 425, 426, 427 and 428 (68 O.S. Supp. 2008, Sections 113, 304, 305, 312.1, 316, 360.4 and 360.5), which relate to cigarette and tobacco product taxes; providing for apportionment of specified revenue to Tax Commission Reimbursement Fund for certain purpose; updating and clarifying language; modifying specified license fees and contents of applications for manufacturer, wholesaler and retailer license; providing for certain agreement by applicant; modifying conditions for which a license may be denied; prohibiting specified acts by a licensed retailer of cigarettes; deleting certain licensing requirement; conforming language; broadening application of certain provision; requiring certain reports to be submitted electronically; making mandatory the requirement that Oklahoma Tax Commission establish certain procedures; modifying required contents of certain reports and certain records maintenance requirements; authorizing Tax Commission to share certain records with specified entities and establishing certain requirements thereto; modifying applicability of certain penalties; deleting and modifying certain prohibited acts; increasing certain penalties and making them administrative; providing for specified acts by consumer subject to certain penalty; making penalty administrative; modifying applicability of certain penalties for wholesaler, retailer or distributing agent; increasing penalty amount for specified acts and making them administrative; requiring Oklahoma Tax Commission to revoke a license under specified circumstances; modifying definitions; providing for application of certain tax levies to certain sales of cigarettes and tobacco products by retailers licensed by noncompacting tribes or nations; providing conditions upon which certain taxes are not levied; requiring certain cigarettes to bear specific type of stamp; providing procedures relating to Native American tax-free stamps; requiring wholesaler to buy and affix tax stamps to other tobacco products sold under specified circumstances; providing procedures for tax-free sale of other tobacco products; providing for application of section under specified circumstances; requiring stamps be affixed to all cigarettes sold; making certain acts unlawful; providing penalties; modifying types of documentation accepted by wholesaler for relief of certain liability; requiring certain declaration by nonparticipating manufacturer and specifying contents thereof; providing for the payment of certain fee; expanding conditions which could preclude inclusion or retention in certain directory; requiring certain manufacturer to have agent under certain circumstances; providing for joint and several liability under specified circumstances; providing for posting of bond in specified amount and providing conditions of bond; providing conditions under which nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance; defining term; requiring posting of a bond under certain conditions; updating and clarifying references; broadening application of certain provision; modifying license fees for dealer and wholesaler of tobacco products; authorizing Tax Commission to provide for issuance of joint license under specified circumstances and establishing related procedures; defining term; providing for specified license fee if products are sold on or from a vehicle; providing for license for certain retailer of tobacco products and establishing amount and related procedures; providing for license for distributing agent of tobacco products and establishing amount and related procedures; prohibiting certain licenses from being assigned or transferred except under certain circumstances; requiring certain persons or licensees to operate with effective unexpired license and providing penalty for violation; limiting penalty; establishing conditions under which no license may be granted, maintained or renewed; prohibiting purchases or sales of tobacco products under certain circumstances; authorizing revocation of certain license under specified circumstances; modifying penalties relating to sale of tobacco products; modifying definition; deleting levy of certain tax on tobacco products sold at specified locations and provision for certain refund; conforming language; modifying reference; repealing 68 O.S. 2001, Section 349, which relates to tax on cigarettes sold at a tribally owned or licensed store; repealing 68 O.S. 2001, Sections 427.1 and 427.2, which relate to the sale of tobacco products at a tribally owned or licensed store; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION 1.     AMENDATORY     68 O.S. 2001, Section 113, as amended by Section 16, Chapter 504, O.S.L. 2004 (68 O.S. Supp. 2008, Section 113), is amended to read as follows:

Section 113.  A.  There is hereby created in the State Treasury a revolving fund for the Oklahoma Tax Commission to be known as the "Tax Commission Reimbursement Fund".  Said revolving fund shall consist of any funds received by the Tax Commission for data processing services or equipment rental and any funds received by the Tax Commission from any incorporated city, town, or county pursuant to a contractual agreement for the augmentation of the enforcement and collection of municipal or county taxes entered into pursuant to the provisions of Sections 1371 or 2702 of this title.  The Tax Commission is authorized to hire full-time-equivalent employees as necessary to perform such duties as to fulfill contractual agreements authorized pursuant to Sections 1371 and 2702 of this title, however, such employees hired to perform such contractual duties shall be supported solely by funds in the Tax Commission Reimbursement Fund which are collected by the Tax Commission from incorporated cities, towns, and counties pursuant to such contractual agreements and such employees shall be terminated upon the discontinuation of such funds or inadequate funds to support such positions.  Such full-time-equivalent employees shall be in the unclassified service and shall not be subject to any provisions of the Oklahoma Personnel Act or to any of the rules or regulations promulgated by the Office of Personnel Management except leave regulations.  All fees collected and apportioned to this fund under the Oklahoma Vehicle License and Registration Act, Section 1101 et seq. of Title 47 of the Oklahoma Statutes, may be used by the Motor Vehicle Division of the Oklahoma Tax Commission to pay all costs incurred in the issuance of certificates of title and inspection of vehicles, including, but not limited to, additional computer costs for the Tax Commission and motor license agents and the check verification system authorized pursuant to the provisions of paragraph 1 of subsection A of Section 1144 of Title 47 of the Oklahoma Statutes or be used for capital expenditures as authorized by the Oklahoma State Legislature.  For the fiscal year beginning July 1, 2004, disbursements from the fund shall be exempt from all agency budget limits.

B.  Notwithstanding any other provision in the Oklahoma Statutes except subsection F of Section 316 and subsection D of Section 418 of this title, beginning July 1, 2009, all revenue from fees and penalties collected pursuant to Sections 304, 316, 415 and 418 of this title shall be apportioned to the Tax Commission Reimbursement Fund for administrative and data processing expenses incurred in connection with electronic reporting requirements pursuant to the provisions of Section 301 et seq., Section 346 et seq., Section 401 et seq. and Section 424 et seq. of this title.

SECTION 2.     AMENDATORY     68 O.S. 2001, Section 304, as last amended by Section 6, Chapter 479, O.S.L. 2005 (68 O.S. Supp. 2008, Section 304), is amended to read as follows:

Section 304.  A.  Every manufacturer, and wholesaler, warehouseman, jobber or distributor of cigarettes in this state, as a condition of carrying on such business, shall annually secure from the Oklahoma Tax Commission a written license, and shall pay therefor an annual fee of Twenty-five Dollars ($25.00) Two Hundred Fifty Dollars ($250.00).  Application for such license, which shall be made upon such forms as prescribed by the Oklahoma Tax Commission, shall include the following:

1.  The applicant’s agreement to the jurisdiction of the Tax Commission and the courts of this state for the purpose of enforcement of the provisions of Section 301 et seq. of this title;

2.  The applicant’s agreement to abide by the provisions of Section 301 et seq. of this title and the rules promulgated by the Tax Commission with reference thereto;

3.  The wholesaler applicant’s agreement to sell cigarettes only to licensed retailers or Indian tribal entities or licensees of Indian tribal entities; and

4.  The manufacturer applicant's agreement to sell cigarettes only to a licensed wholesaler.

This license, which will be for the ensuing year, must at all times be displayed in a conspicuous place so that it can be seen.  Persons operating more than one place of business must secure a license for each place of business.  "Place of business" shall be construed to include the place where orders are received, or where cigarettes are sold.  If cigarettes are sold on or from any vehicle, the vehicle shall constitute a place of business and the regular license fee of Twenty-five Dollars ($25.00) shall be paid with respect thereto.  However, if the vehicle is owned or operated by a place of business for which the regular Twenty-five Dollars ($25.00) fee is paid, the annual fee for the license with respect to such vehicle shall be only Ten Dollars ($10.00).  The expiration for such vehicle license shall expire on the same date as the current license of the place of business.

Provided, that the Tax Commission shall not authorize the use of a stamp-metering device by any manufacturer, or wholesaler, warehouseman, jobber or distributor who does not maintain a warehouse or wholesale establishment or place of business within the State of Oklahoma from which cigarettes are received, stocked and sold and where such metering device is kept and used; but the Tax Commission may, in its discretion, permit the use of such metering device by manufacturers, and wholesalers, warehousemen, jobbers or distributors of cigarettes residing wholly within another state where such state permits a licensed Oklahoma resident, manufacturer, or wholesaler, warehouseman, jobber or distributor of cigarettes the use of the metering device of such state without first requiring that such manufacturer, or wholesaler, warehouseman, jobber or distributor establish a place of business in such other state.  The provisions of this subsection relating to metering devices shall not apply to states which do not require the affixing of tax stamps to packages of cigarettes before same are offered for sale in such states.

B.  Every retailer in this state, except Indian tribal entities or licenses of Indian tribal entities, as a condition of carrying on such business, shall secure from the Tax Commission a license and shall pay therefor a fee of Thirty Dollars ($30.00).  Application for such license, which shall be made upon such forms as prescribed by the Tax Commission, shall include the following:

1.  The applicant’s agreement to the jurisdiction of the Tax Commission and the courts of this state for the purpose of enforcement of the provisions of Section 301 et seq. of this title;

2.  The applicant’s agreement to abide by the provisions of Section 301 et seq. of this title and the rules promulgated by the Tax Commission with reference thereto;

3.  The applicant’s agreement that it shall not purchase any cigarettes for resale from a supplier that does not hold a current wholesaler’s license issued pursuant to this section; and

4.  The applicant’s agreement to sell cigarettes only to consumers.

Such license, which will be for the ensuing three (3) years, must at all times be displayed in a conspicuous place so that it can be seen.  Upon expiration of such license, the retailer to whom such license was issued may obtain a renewal license which shall be valid for three (3) years or until expiration of the retailer's sales tax permit, whichever is earlier, after which a renewal license shall be valid for three (3) years.  The manner and prorated fee for renewals shall be prescribed by the Tax Commission.  Every person operating under such license as a retailer and who owns or operates more than one place of business must secure a license for each place of business.  "Place of business" shall be construed to include places where orders are received or where cigarettes are sold.

C.  Every distributing agent shall, as a condition of carrying on such business, pursuant to written application on a form prescribed by and in such detailed form as the Tax Commission may require, annually secure from the Tax Commission a license, and shall pay therefor an annual fee of One Hundred Dollars ($100.00).  An application shall be filed and a license obtained for each place of business owned or operated by a distributing agent.  The license, which will be for the ensuing year, shall be consecutively numbered, nonassignable and nontransferable, and shall authorize the storing and distribution of unstamped cigarettes within this state when such distribution is made upon interstate orders only.

D.  1.  All wholesale, retail, and distributing agent's licenses shall be nonassignable and nontransferable from one person to another person.  Such licenses may be transferred from one location to another location after an application has been filed with the Tax Commission requesting such transfer and after the approval of the Tax Commission.

2.  Wholesale, retail, and distributing agent's licenses shall be applied for on a form prescribed by the Tax Commission.  Any person operating as a wholesaler, retailer, or distributing agent must at all times have an effective unexpired a valid license which has been issued by the Tax Commission.  If any such person or licensee continues to operate as such on a license issued by the Tax Commission which has expired, or operates without ever having obtained from the Tax Commission such license, such person or licensee shall, after becoming delinquent for a period in excess of fifteen (15) days, pay to the Tax Commission, in addition to the annual license fee, a penalty of twenty-five cents ($0.25) per day on each delinquent license for each day so operated in excess of fifteen (15) days.  The penalty provided for herein shall not exceed the annual license fee for such license.

E.  No license may be granted, maintained or renewed if any of the following conditions applies to the applicant.  For purposes of this section, "applicant" includes any combination of persons owning directly or indirectly, in the aggregate, more than ten percent (10%) of the ownership interests in the applicant:

1.  The applicant owes Five Hundred Dollars ($500.00) or more in delinquent cigarette taxes;

2.  The applicant had a cigarette manufacturer, wholesaler, retailer or distributor license revoked by the Tax Commission within the past two (2) years;

3.  The applicant has been convicted of a crime relating to stolen or counterfeit cigarettes, or receiving stolen or counterfeit cigarettes or has been convicted of or has entered a plea of guilty or nolo contendere to any felony;

4.  If the applicant is a cigarette manufacturer, the applicant is neither:

a.	a participating manufacturer as defined in Section II (jj) of the Master Settlement Agreement as defined in Section 600.22 of Title 37 of the Oklahoma Statutes, nor

b.	in full compliance with the provisions of paragraph 2 of subsection A of Section 600.23 of Title 37 of the Oklahoma Statutes;

5.  If the applicant is a cigarette manufacturer, if any cigarette imported by such applicant is imported into the United States in violation of 19 U.S.C., Section 1681a; or

6.  If the applicant is a cigarette manufacturer, if any cigarette imported or manufactured by the applicant does not fully comply with the Federal Cigarette Labeling and Advertising Act, 15 U.S.C., Section 1331 et seq.

F.  No person or entity licensed pursuant to the provisions of this section shall purchase cigarettes from or sell cigarettes to a person or entity required to obtain a license unless such person or entity has obtained such license.

G.  No person licensed as a retailer in this state shall:

1.  Sell any cigarettes to any other person licensed as a retailer in this state unless such sale is for the purpose of moving inventory between stores which are part of the same company; or

2.  Purchase any cigarettes from any person or entity other than a wholesaler licensed pursuant to Section 301 et seq. of this title.

H.  In addition to any civil or criminal penalty provided by law, upon a finding that a licensee has violated any provision of Section 301 et seq. of this title, the Tax Commission may revoke or suspend the license or licenses of the licensee pursuant to the procedures applicable to revocation of a license set forth in Section 316 of this title.

H. I.  The Tax Commission shall create and maintain a web site setting forth all current valid licenses and the identity of licensees holding such licenses, and shall update the site no less frequently than once per month.

SECTION 3.     AMENDATORY     68 O.S. 2001, Section 305, as last amended by Section 8, Chapter 378, O.S.L. 2008 (68 O.S. Supp. 2008, Section 378), is amended to read as follows:

Section 305.  A.  Every wholesaler, jobber, distributor, or warehouseman doing business within this state and required to secure a license as provided under Section 304 of this title shall, upon withdrawal from storage, and before making any sale or distribution of cigarettes for consumption thereof, affix or cause the same to have affixed thereto the stamp or stamps as required by Section 301 et seq. of this title.  It shall be the duty of the wholesaler, jobber, distributor, or warehouseman to supply and charge to the retailer the necessary stamps to cover any and all drop shipments of cigarettes billed to the retailer or consumer by the wholesaler, jobber, distributor, or warehouseman; and the wholesaler, jobber, distributor, or warehouseman shall be liable to the Oklahoma Tax Commission to perform this service.  Distributors Wholesalers may apply stamps only to cigarette packages that they have received directly from a manufacturer or importer of cigarettes who possesses a valid and current permit under Section 5712 of Title 26 of the United States Code.

B.  Every retailer who has received unstamped cigarettes from a manufacturer, or wholesaler, jobber, warehouseman or distributor not required to secure a license as provided for under Section 304 of this title, or to affix stamps as required under subsection A of this section, shall, within seventy-two (72) hours, excluding Sundays and holidays, from the time such cigarettes come into the retailer’s possession, and before making any sale or distribution for consumption thereof, affix stamps upon all cigarette packages in the proper denomination and amount, as required by Section 302 of this title.

C.  Any unlicensed consumer who buys direct from any distributor, jobber, manufacturer, warehouseman, or wholesaler, or other person, within or without this state, any cigarettes in excess of forty, at any one time to which are not affixed the stamps required by Section 301 et seq. of this title shall, before purchasing such cigarettes, secure from the Tax Commission a written license and shall pay therefor an annual fee of Twenty-five Dollars ($25.00), and shall immediately, upon the receipt of any unstamped cigarettes, report the same to the Tax Commission on such forms as the Tax Commission may prescribe, and immediately purchase from the Tax Commission proper stamps and attach the same to all such cigarettes received.  It shall be unlawful for any person to sell or consume cigarettes on which the tax, as levied by Section 301 et seq. of this title, has not been paid, and which are not contained in packages to which are securely affixed the stamps evidencing payment of the tax imposed by Section 301 et seq. of this title.

D.  If, upon examination of invoices or from other investigations, the Tax Commission finds that cigarettes have been sold without stamps affixed as required by Section 301 et seq. of this title, the Tax Commission shall have the power to require such person to pay to the Tax Commission a sum equal to twice the amount of the tax due.  If, under the same circumstances, a person is unable to furnish evidence to the Tax Commission of sufficient stamp purchases to cover unstamped cigarettes purchased, the prima facie presumption shall arise that such cigarettes were sold without proper stamps being affixed thereto.

E.  1.  All unstamped contraband cigarettes upon which taxes are imposed by Section 301 et seq. of this title and all cigarettes stamped, sold, offered for sale, or imported into this state in violation of the provisions of Section 305.1 of this title which shall be found in the possession, custody, or control of any person, for the purpose of being consumed, sold or transported from one place to another in this state, for the purpose of evading or violating the provisions of Section 301 et seq. of this title, or with intent to avoid payment of the tax imposed hereunder, and any automobile, truck, conveyance, or other vehicle whatsoever used in the transportation of such cigarettes, and all paraphernalia, equipment or other tangible personal property incident to the use of such purposes, found in the place, building, vehicle or vehicles, where such cigarettes are found, may be seized by any authorized agent of the Tax Commission, or any sheriff, deputy sheriff, constable or other peace officer within the state, without process.  The same shall be, from the time of such seizure, forfeited to the State of Oklahoma, and a proper proceeding filed to maintain such seizure and prosecute the forfeiture as herein provided.

2.  All such cigarettes so seized shall first be listed and appraised by the officer making such seizure and turned over to the Tax Commission and a receipt therefor taken.  The person making such seizure shall immediately make and file a written report thereof, showing the name of the person making such seizure, the place where and the person from whom such property was seized, and an inventory and appraisement thereof, at the usual and ordinary retail price of such articles received, to the Tax Commission, and the Attorney General, in the case of cigarettes stamped, sold, offered for sale, or imported into this state in violation of the provisions of Section 305.1 of this title.  The Tax Commission shall then proceed to hear and determine the matter of whether or not the cigarettes should, in fact, be forfeited to the State of Oklahoma.  The owner of the cigarettes shall be given at least ten (10) days’ notice of the hearing.  In the event the Commission finds that the cigarettes should be forfeited to the State of Oklahoma, it shall make an order forfeiting the cigarettes to the State of Oklahoma and directing the destruction of such cigarettes.

3.  Any and all such vehicles and property so seized shall first be listed and appraised by the officer making such seizure and turned over to the county sheriff of the county in which the seizure is made and a receipt therefor taken.  The person making such seizure shall immediately make and file a written report thereof, showing the name of the person making such seizure, the place where and the person from whom such property was seized, and an inventory and appraisement thereof, at the usual and ordinary retail price of such articles received, to the Tax Commission.  The district attorney of the county in which the seizures are made shall, at the request of the Tax Commission or Attorney General, file in the district court forfeiture proceedings in the name of the State of Oklahoma, as plaintiff, and in the name of the owner or person in possession, as defendant, if known, and if unknown in the name of the property seized.  The clerk of the court shall issue summons to the owner or person in whose possession such property was found, directing the owner or person to answer within ten (10) days.  If the property is declared forfeited and ordered sold, notice of the sale shall be posted in five public places in the county not less than ten (10) days before the date of sale.  The proceeds of the sale shall be deposited with the clerk of the court, who shall after deducting costs, including the costs of sale, pay the balance to the Tax Commission as cigarette tax collected, or in the case of vehicles and property seized in connection with cigarettes seized as being in violation of the provisions of Section 305.1 of this title, to the Attorney General.  The Attorney General shall remit the amount of cigarette tax, if any be due, including all penalties and interest due, to the Tax Commission as cigarette tax collected and shall deposit the remainder to the revolving fund created in Section 305.2 of this title.

4.  The seizure of cigarettes shall not relieve the person from whom such cigarettes were seized from any prosecution or the payment of any penalties provided for under Section 301 et seq. of this title.

5.  The forfeiture provisions of Section 301 et seq. of this title shall only apply to persons having possession of or transporting cigarettes with intent to barter, sell or give away the same; provided, that such possession of cigarettes in any quantity of five or more cartons of ten packages each shall be prima facie evidence of intent to barter, sell or give away such cigarettes in violation of the provisions of Section 301 et seq. of this title.

F.  The Tax Commission shall exchange new stamps for any stamps which are damaged, or for stamps which have been affixed to packages of cigarettes returned to factories, or shipped to other states, or sold to government agencies or state institutions, or for stamps purchased in excess of floor stocks.  Application to the Tax Commission for such exchanges must be accompanied by affidavit, damaged stamps, bill of lading covering shipment to factory or other states, or other proof required by the Tax Commission.  Any person to whom stamps shall be issued under this paragraph may, upon approval of the Tax Commission, sell such stamps to any wholesaler as defined in Section 301 et seq. of this title.

G.  Any person, including distributing agents, wholesalers, jobbers, carriers, warehousemen, retailers and consumers, having possession of unstamped cigarettes in this state shall be liable for the tax on such cigarettes in case the same are lost, stolen or unaccounted for, in transit, storage or otherwise, and in such event a presumption shall exist for the purposes of taxation, that such cigarettes were used and consumed in Oklahoma.

SECTION 4.     AMENDATORY     68 O.S. 2001, Section 309, is amended to read as follows:

Section 309.  (a) A.  The right of a common carrier in this state to carry unstamped cigarettes, as defined in this article, shall not be affected by this article; provided that common carriers delivering unstamped cigarettes to any person in this state for the purpose of selling or consuming unstamped cigarettes in this state in violation of Section 301 et seq. of this title or this act shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of Section 305 of this title.  Should any common carrier sell cigarettes to its passengers while being carried in this state, the sale shall be subject to the stamp tax and other provisions of this article, and to the rules and regulations of the Tax Commission.

(b)  Common carriers B.  Carriers transporting cigarettes to a point within the state, or a bonded warehouseman or bailee having possession of cigarettes, are required, under this article and the rules and regulations to be prescribed by the Tax Commission, to transmit to the Tax Commission a statement of such consignment of cigarettes, showing the date, point of origin, point of delivery, and to whom delivered, and such other information as the Tax Commission may require.  All common carriers, bailees or warehousemen shall permit an examination by the Tax Commission, or its agents or legally authorized representatives, of their records relating to the shipment or receipt of cigarettes.  Any person who fails or refuses to transmit to the Tax Commission the statements above provided for, or whoever refuses to permit the examination of the records by the Tax Commission, shall be guilty of a misdemeanor.

SECTION 5.     AMENDATORY     68 O.S. 2001, Section 312, is amended to read as follows:

Section 312.  (a) A.  Every person subject to the payment of a tax hereunder shall keep in Oklahoma accurate records covering the business carried on and shall for three (3) years, and more if required by the rules and regulations of the Oklahoma Tax Commission, keep and preserve all invoices, showing all purchases and sales of cigarettes; and such invoices and stock of cigarettes shall at all times be subject to the examination and inspection of any member or legally authorized agent or representative of the Tax Commission, in the enforcement of this article.  Every wholesaler, jobber, warehouseman or retailer operating in the State of Oklahoma, whose main warehouse or headquarters is in another state shall keep all records of all cigarette transactions made by him or her at his or her place of business in Oklahoma, or at a designated place in the State of Oklahoma.

(b) B.  Every wholesaler and retailer receiving unstamped cigarettes shall file a report with the Tax Commission on or before the 10th tenth day of each month covering the previous calendar month, on forms prescribed and furnished by the Tax Commission, disclosing the beginning and closing inventory of unstamped cigarettes, the beginning and closing inventory of stamped cigarettes, the beginning and closing inventory of cigarette stamps, the number and denomination of cigarette stamps affixed to packages of cigarettes, and all purchases of cigarettes by showing the invoice number, name and address of the consignee or seller, the date, and the number of cigarettes purchased, and such other information as may be required by the Tax Commission.  Retailers or consumers purchasing cigarettes in drop shipments shall be required to make monthly reports to the Commission as are required of wholesale dealers.

(c) C.  Every distributing agent shall, except as otherwise provided herein, keep at each place of business in Oklahoma for a period of three (3) years for inspection by the Tax Commission a complete record of all cigarettes received by him, including all orders, invoices, bills of lading, waybills, freight bills, express receipts, and all other shipping records which are furnished to the distributing agent by the carrier and the shipper of said cigarettes, or copies thereof, and, in addition thereto, a complete record of each and every distribution or delivery made by said distributing agent.  Such records of distribution or delivery shall include all orders, invoices or copies thereof, all other shipping records furnished by the carrier, and the person ordering distribution or delivery of the cigarettes.

(d) D.  Upon a form to be prescribed by the Tax Commission, every distributing agent in Oklahoma shall report each day, except Sundays and holidays, to the Tax Commission all deliveries of cigarettes made on the preceding day or days.  The reports shall show the name of the person ordering the delivery, date of delivery, name and address of the person to whom delivered, the invoice number, bill of lading or waybill number, the number and kind of cigarettes delivered, the means of delivery and/or the transportation agent and the destination of drop shipment, if a drop shipment.  However, if the invoice furnished the distributing agent by the manufacturer or other person ordering such delivery, or the bill of lading prepared by said distributing agent to cover the shipment under said invoice, contains all the information required to be reported, it will be sufficient to send a copy of said invoice or invoices, or a copy of said bill of lading or bills of lading, to the Tax Commission.

E.  Beginning July 1, 2009, every wholesaler or manufacturer required to make any report required by this section shall submit such report electronically as prescribed by the Tax Commission pursuant to Section 312.1 of this title.

SECTION 6.     AMENDATORY     Section 4, Chapter 475, O.S.L. 2003, as last amended by Section 6, Chapter 378, O.S.L. 2008 (68 O.S. Supp. 2008, Section 312.1), is amended to read as follows:

Section 312.1  A.  The Oklahoma Tax Commission, if in its discretion it deems practical and reasonable, may establish procedures for maintaining records and filing reports containing the information required by this section.  The exercise by the Tax Commission of the authority granted in this subsection shall be by adoption of rules necessary to establish procedures that increase compliance with the requirements of this article.  If the Tax Commission determines to utilize its discretion, the provisions of subsections B through J of this section shall apply.

B.  Every wholesaler and distributor receiving cigarettes shall submit periodic reports containing the information required by this subsection.  In each case, the information required shall be itemized so as to disclose clearly the brand style of the product.  The reports shall be provided separately with respect to each of the facilities operated by the wholesaler and distributor and shall include:

1.  The quantity of cigarette packages that were distributed or shipped to another distributor wholesaler or to a retailer within the borders of Oklahoma during the reporting period and the name and address of each person to whom those products were ultimately distributed or shipped;

2.  The quantity of cigarette packages that were distributed or shipped to another facility of the same distributor wholesaler within the borders of Oklahoma during the reporting period; and

3.  The quantity of cigarette packages that were distributed or shipped within the borders of Oklahoma to Indian tribal entities or licensees of Indian tribal entities or instrumentalities of the federal government during the reporting period and the name and address of each person to whom those products were distributed or shipped.

C.  Manufacturers shall submit periodic reports containing the information required by this subsection.  In each case, the information required shall be itemized so as to disclose clearly the brand style of the product.  The reports shall be provided separately with respect to each of the facilities operated by the manufacturer and shall include:

1.  The quantity of cigarette packages that were distributed or shipped to another manufacturer or to a distributor wholesaler within the borders of Oklahoma during the reporting period and the name and address of each person to whom those products were distributed or shipped;

2.  The quantity of cigarette packages that were distributed or shipped to another facility of the same manufacturer within the borders of Oklahoma during the reporting period; and

3.  The quantity of cigarette packages that were distributed or shipped within the borders of Oklahoma to instrumentalities of the federal government during the reporting period and the name and address of each person to whom those products were distributed or shipped.

D.  The Tax Commission shall establish the reporting period, which shall be no longer than three (3) calendar months and no shorter than one (1) calendar month.  Reports shall be submitted electronically as prescribed by the Tax Commission.

E.  Each distributor wholesaler shall maintain copies of invoices or equivalent documentation for each of its facilities for every transaction in which the distributor wholesaler is the seller, purchaser, consignor, consignee, or recipient of cigarettes.  The invoices or documentation shall show the name, address, phone number and wholesale license number of the consignor, seller, purchaser, or consignee, and the quantity by brand style of the cigarettes involved in the transaction.

F.  Each retailer shall maintain copies of invoices or equivalent documentation for every transaction in which the retailer receives or purchases cigarettes at each of its facilities.  The invoices or documentation shall show the name and address of the distributor wholesaler from whom, or the address of another facility of the same retailer from which, the cigarettes were received, the quantity of each brand style received in such transaction and the retail cigarette license number or sales tax license number.

G.  Each manufacturer shall maintain copies of invoices or equivalent documentation for each of its facilities for every transaction in which the manufacturer is the seller, purchaser, consignor, consignee, or recipient of cigarettes.  The invoices or documentation shall show the name and address of the consignor, seller, purchaser, or consignee, and the quantity by brand style of the cigarettes involved in the transaction.

H.  Records required under subsections E through G of this section shall be preserved on the premises described in the license in such a manner as to ensure permanency and accessibility for inspection at reasonable hours by authorized personnel of the Oklahoma Tax Commission.  With the permission of the Tax Commission, manufacturers, distributors wholesalers, and retailers with multiple places of business may retain centralized records off premises, but shall transmit duplicates of the invoices or the equivalent documentation to each place of business within twenty-four (24) hours upon the request of the Tax Commission.

I.  The records required by subsections E through G of this section shall be retained for a period of three (3) years from the date of the transaction.

J.  The Tax Commission, upon request, shall have access to reports and records required under this act.  The Tax Commission at its sole discretion may share the records and reports required by such sections with law enforcement officials of the federal government, the State of Oklahoma, other states, or international authorities and shall upon request share the records and reports with state and local law enforcement officials; provided, in the event a request is made to share records and reports pertaining to any Indian tribal entity or licensees of Indian tribal entities, the appropriate tribal Attorney General’s office shall be notified prior to the disclosure of such records.

SECTION 7.     AMENDATORY     68 O.S. 2001, Section 316, as last amended by Section 7, Chapter 378, O.S.L. 2008 (68 O.S. Supp. 2008, Section 316), is amended to read as follows:

Section 316.  A.  Any person, other than a consumer, who shall:

1.  Sell, offer for sale or present as a prize or gift cigarettes without a stamp being then and there affixed to each individual package;

2.  Sell cigarettes in quantities less than an individual package;

3.  Knowingly consume, use or smoke any cigarettes upon which a tax is required to be paid without a stamp being affixed upon each individual package;

4.  Knowingly cancel or mutilate any stamp affixed to any individual package of cigarettes for the purpose of concealing any violation of Section 301 et seq. of this title or with any other fraudulent intent;

5. 4.  Use any artful device or deceptive practice to conceal any violation of Section 301 et seq. of this title;

6. 5.  Refuse to surrender to the Oklahoma Tax Commission upon demand any cigarettes possessed in violation of any provision of Section 301 et seq. of this title; or

7.  Make 6.  Knowingly or intentionally make a first sale of cigarettes without a stamp being then and there affixed to each individual package; shall be guilty of a misdemeanor, and upon conviction thereof shall be fined not more than Two Hundred Dollars ($200.00), where specific penalties are not otherwise provided.

B.  Any consumer, who shall:

1.  Sell, offer for sale or present as a prize or gift cigarettes without a stamp being then and there affixed to each individual package;

2.  Knowingly consume, use or smoke any cigarettes upon which a tax is required to be paid without a stamp being affixed upon each individual package;

3.  Knowingly cancel or mutilate any stamp affixed to any individual package of cigarettes for the purpose of concealing any violation of the Cigarette and Tobacco Products Tax Codes or with any other fraudulent intent;

4.  Use any artful device or deceptive practice to conceal any violation of the Cigarette and Tobacco Products Tax Codes; or

5.  Refuse to surrender to the Tax Commission upon demand any cigarettes possessed in violation of any provision of Section 301 et seq. of this title,

shall be fined not more than Two Hundred Dollars ($200.00), where specific penalties are not otherwise provided.

C.  Any distributor, wholesale dealer, retail dealer wholesaler, retailer or distributing agent who shall intentionally:

1.  Commit any of the acts specifically enumerated in subsection A of this section, where such acts are applicable to such person;

2.  Sell any cigarettes upon which tax is required to be paid by Section 301 et seq. of this title without at the time of making such sale having a valid license;

3.  Make a first sale of cigarettes without at the time of first sale having a license posted so as to be easily seen by the public; or

4.  Fail to deliver an invoice required by law to a purchaser of cigarettes;

shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not punished by an administrative fine of not more than Two Hundred Dollars ($200.00) Ten Thousand Dollars ($10,000.00) for the first offense, and not more than Twenty-five Thousand Dollars ($25,000.00) for the second offense, where specific penalties are not otherwise provided.

C. D.  Any distributing agent who shall:

1.  Commit any of the acts specifically enumerated in subsections A and B of this section where such provisions are applicable to such distributing agent; or

2.  Store any unstamped cigarettes in the state or deliver or distribute any unstamped cigarettes within this state, without at the time of storage or delivery having a valid license posted so as to be easily seen by the public;

shall be guilty of a misdemeanor, and upon conviction shall be punished by a an administrative fine of not more than Two Hundred Dollars ($200.00) Ten Thousand Dollars ($10,000.00) for the first offense, and not more than Twenty-five Thousand Dollars ($25,000.00) for the second offense.

D. E.  Any retailer violating the provisions of Section 301 et seq. of this title may:

1.  For a first offense, be punished by an administrative fine of not more than One Hundred Dollars ($100.00);

2.  For a second offense, be punished by an administrative fine of not more than One Thousand Dollars ($1,000.00); and

3.  For a third or subsequent offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00).

E. F.  Any wholesaler, jobber or warehouseman violating the provisions of Section 305.1 of this title shall:

1.  For a first offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00); and

2.  For a second or subsequent offense, be punished by an administrative fine of not more than Twenty Thousand Dollars ($20,000.00).

Administrative fines collected pursuant to the provisions of this subsection shall be deposited to the revolving fund created in Section 305.2 of this title.

F. G.  The Tax Commission shall immediately revoke the license of a person punished for a violation pursuant to the provisions of paragraph 3 of subsection D E of this section or a person punished for a violation pursuant to the provisions of subsection E F of this section.  A person whose license is so revoked shall not be eligible to receive another license pursuant to the provisions of Section 301 et seq. of this title for a period of ten (10) years.

G. H.  Whoever, with intent to defraud Oklahoma:

1.  Fails to keep or make any record, return, report, or inventory, or keeps or makes any false or fraudulent record, return, report, or inventory, required by Section 301 et seq. of this title or rules promulgated thereunder;

2.  Refuses to pay any tax imposed by Section 301 et seq. of this title, or attempts in any manner to evade or defeat the tax or the payment thereof; or

3.  Fails to comply with any requirement of Section 301 et seq. of this title;

shall, for each such offense, be fined punished with an administrative fine of not more than Ten Thousand Dollars ($10,000.00), or imprisoned not more than five (5) years, or both.

H. I.  Whoever knowingly omits, neglects, or refuses to comply with any duty imposed upon the person by Section 301 et seq. of this title, or to do, or cause to be done, any of the things required by Section 301 et seq. of this title, or does anything prohibited by Section 301 et seq. of this title, shall, in addition to any other penalty provided in Section 301 et seq. of this title, pay an administrative penalty fine of One Thousand Dollars ($1,000.00).

I. J.  Whoever fails to pay any tax imposed by Section 301 et seq. of this title at the time prescribed by law or rules, shall, in addition to any other penalty provided in Section 301 et seq. of this title, be liable to a penalty of five hundred percent (500%) of the tax due but unpaid.

J. K.  1.  All cigarettes which are held for sale or distribution within the borders of Oklahoma, in violation of the requirements of Section 301 et seq. of this title, and the machinery used to manufacture counterfeit cigarettes shall be forfeited to Oklahoma.  All cigarettes and machinery forfeited to Oklahoma under this paragraph shall be destroyed.

2.  All fixtures, equipment, and all other materials and personal property on the premises of any distributor or retailer who, with intent to defraud the state, fails to keep or make any record, return, report, or inventory; keeps or makes any false or fraudulent record, return, report, or inventory required by Section 301 et seq. of this title; refuses to pay any tax imposed by Section 301 et seq. of this title; or attempts in any manner to evade or defeat the requirements of Section 301 et seq. of this title shall be forfeited to Oklahoma.

K. L.  Notwithstanding any other provision of law, the sale or possession for sale of counterfeit cigarettes, or the sale or possession for sale of counterfeit cigarettes by a manufacturer, distributor, or retailer shall result in the seizure of the product and related machinery by the Tax Commission or any law enforcement agency and shall be punishable as follows:

1.  A first violation with a total quantity of less than two cartons of cigarettes or the equivalent amount of other cigarettes shall be punishable by a an administrative fine not to exceed One Thousand Dollars ($1,000.00) or imprisonment not to exceed five (5) years, or both fine and imprisonment Ten Thousand Dollars ($10,000.00);

2.  A subsequent violation with a total quantity of less than two cartons of cigarettes, or the equivalent amount of other cigarettes shall be punishable by a an administrative fine not to exceed Five Thousand Dollars ($5,000.00), or imprisonment not to exceed five (5) years, or both the fine and the imprisonment Twenty-five Thousand Dollars ($25,000.00), and shall also result in the revocation by the Tax Commission of the manufacturer, distributor wholesaler, or retailer license;

3.  A first violation with a total quantity of more than two cartons of cigarettes, or the equivalent amount of other cigarettes, shall be punishable by a an administrative fine not to exceed Two Thousand Dollars ($2,000.00) or imprisonment not to exceed five (5) years, or both the fine and imprisonment Twenty-five Thousand Dollars ($25,000.00); and

4.  A subsequent violation with a quantity of two cartons of cigarettes or more, or the equivalent amount of other cigarettes shall be punishable by a an administrative fine not to exceed Fifty Thousand Dollars ($50,000.00) or imprisonment not to exceed five (5) years, or both the fine and imprisonment, and shall also result in the revocation by the Tax Commission of the manufacturer, distributor wholesaler, or retailer license.

For the purposes of this section, “counterfeit cigarettes” includes cigarettes that have false manufacturing labels or tobacco product packs without tax stamps or the applicable tax stamp or with counterfeit tax stamps or a combination thereof.  Any counterfeit cigarette seized by the Tax Commission shall be destroyed.

M.  The Tax Commission shall immediately revoke the license of a person punished for a violation pursuant to the provisions of subsection H of this section.  A person whose license is so revoked shall not be eligible to receive another license for a period of five (5) years.

SECTION 8.     AMENDATORY     68 O.S. 2001, Section 348, is amended to read as follows:

Section 348.  As used in Sections 346 through 352 of this title:

1.  "Tribally owned or licensed store" means a store or place of business which is owned and operated by a federally recognized Indian tribe or nation, other than a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 346 of this title during the period that such compact is effective, on Indian country within the territorial jurisdiction of that tribe or nation or which is duly licensed by such tribe or nation pursuant to tribal laws or ordinances to conduct business located on Indian country within the territorial jurisdiction of that tribe or nation;

2.  "Federally recognized Indian tribe or nation" means an Indian tribal entity which is recognized by the United States Bureau of Indian Affairs as having a special relationship with the United States;

3.  "Indian country" means:

a.	land held in trust by the United States of America for the benefit of a federally recognized Indian tribe or nation,

b.	all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, including rights-of-way running through the reservation,

c.	all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and

d.	all Indian allotments, the Indian titles to which have not been extinguished, including individual allotments held in trust by the United States or allotments owned in fee by individual Indians subject to federal law restrictions regarding disposition of said allotments and including rights-of-way running through the same;

4.  "Member of the tribe" or "tribal member" means a person who is duly enrolled within the membership of the federally recognized Indian tribe or nation which owns or licenses the store;

5.  "Nonmember of the tribe" or "nontribal member" means, with respect to a particular Indian tribe or nation, any person who is not a duly enrolled member of that tribe or nation, and shall include any person who is a member of another Indian tribe or nation but not a member of that tribe or nation;

6.  "Unstamped cigarettes" means packages of cigarettes which bear no evidence of a the tax stamp required by state law and includes cigarettes bearing an improper tax stamp applicable to the retail establishment at which the cigarette is sold, regardless of the identity of the establishment which the cigarette has been sold, shipped, consigned or delivered;

7.  "Contraband cigarettes" means unstamped cigarettes which are required by the provisions of Sections 348 through 351 of this title or Section 301 et seq. of this title to bear stamps and which are in the possession, custody or control of any person, for the purpose of being consumed, sold, offered for sale or consumption or transported to any person in this state other than a wholesaler licensed under Section 304 of this title; provided, contraband cigarettes shall not include unstamped cigarettes sold to veterans' hospitals, to state-operated domiciliary homes for veterans or to the United States for sale or distribution by said entities in accordance with Sections 321 through 324 of this title;

8.  "Stamped cigarettes" means packages of cigarettes which bear a the proper tax stamp required by state law;

9.  "Commission" means the Oklahoma Tax Commission; and

10.  "Person" shall include any individual, company, partnership, joint venture, joint agreement, association (mutual or otherwise), limited liability company, corporation, trust, estate, business trust receiver or trustee appointed by any state or federal court, syndicates or any combination acting as a unit, in the plural or singular number.

SECTION 9.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 349.1 of Title 68, unless there is created a duplication in numbering, reads as follows:

A.  Sales of cigarettes and other tobacco products by retailers licensed by noncompacting federally recognized Indian tribes or nations (hereinafter “tribe or nation”) shall be subject to the cigarette excise tax imposed by Section 302 et seq. of Title 68 of the Oklahoma Statutes and the excise tax on other tobacco products imposed by Section 402 et seq. of Title 68 of the Oklahoma Statutes.

B.  1.  Members of noncompacting federally recognized Indian tribes or nations may purchase cigarettes and other tobacco products, without payment of Oklahoma cigarette excise tax or Oklahoma other tobacco products excise tax, subject to the following conditions:

a.	the member of the noncompacting federally recognized Indian tribe (hereinafter “purchaser”) is purchasing for his or her personal use, and not for sale, transfer or other disposition to another person or entity,

b.	the purchaser is purchasing from a retailer licensed by the federally recognized Indian tribe or nation of which the purchaser is a member,

c.	the licensed retailer of purchaser’s federally recognized Indian tribe or nation is located upon “Indian country” of that licensing tribe or nation, as that term is defined by 18 USC §1151(a) and Section 348.3 of Title 68 of the Oklahoma Statutes.

2.  Members of noncompacting federally recognized tribes or nations are not entitled to purchase cigarettes or other tobacco products, free of Oklahoma excise tax, from retailers licensed by any other tribe or nation, compacting or not, but have a right to purchase cigarettes and other tobacco products, free of Oklahoma excise tax, upon the “Indian country” of the tribe or nation of which the purchaser is a member, per the United States Supreme Court decision “Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma”, 498 U.S. 505 (1991).

C.  Cigarettes held for sale to members of a noncompacting tribe or nation by licensed retailers of that tribe or nation, which are located on the “Indian country” of that tribe or nation, as defined by 18 USC §1151(a) and Section 348.3 of Title 68 of the Oklahoma Statutes, must bear a stamp issued by the Oklahoma Tax Commission evidencing that cigarettes are purchased free of Oklahoma cigarette excise tax.  The following procedures shall apply to said stamps (hereafter, “Native American tax free stamps”):

1.  The probable demand for Native American tax free stamps for each noncompacting tribe or nation shall be determined by the Tax Commission by ascertaining the total membership in Oklahoma of the tribe or nation from the Bureau of Indian Affairs or other reliable source of public information regarding such membership, and multiplying that number by the percentage of smokers in Oklahoma or in the United States, whichever is greater, based on the most recent data available from the State Department of Health and/or other reliable source of public information.  The product of that calculation shall be multiplied by the average yearly consumption of cigarettes by smokers in Oklahoma or the United States, whichever is greater, based on the most recent data available from the State Department of Health and/or other reliable source of public information.  The resulting number shall be deemed to constitute the probable demand for Native American tax free stamps of such noncompacting tribe or nation for a calendar year.

2.  A preliminary determination of probable demand shall be furnished to the governing authorities of each noncompacting tribe or nation which may submit, for consideration by the Tax Commission, any verifiable information in its possession regarding such probable demand, including, but not limited to, a verifiable record of previous sales to tribal members or other statistical evidence.

3.  After consideration of all verifiable information furnished by a noncompacting tribe or nation pursuant to paragraph 2 of this subsection, the Tax Commission shall make its final determination of probable demand, and furnish such determination to the subject noncompacting tribe or nation and to all Oklahoma-licensed cigarette wholesalers.

4.  Each calendar year, the Tax Commission shall establish, as to any and all Oklahoma-licensed cigarette wholesalers supplying cigarettes to tribally licensed or owned retailers of each noncompacting tribe or nation an allocation of the probable demand for such tribe or nation, based upon each wholesaler’s previous year’s reported sales of cigarettes to the tribally licensed or owned retailers of such tribe or nation.  In making such allocation, the Tax Commission shall consider such other verifiable information as may be submitted by a licensed wholesaler or such tribe or nation.  Upon reaching a final determination of allocation, the Tax Commission shall advise the affected wholesaler and the tribe or nation.

5.  Oklahoma-licensed wholesalers may request and receive from the Tax Commission, at the beginning of each quarter of the year, their allocated share of Native American tax free stamps for the tribally licensed or owned retailers of each noncompacting tribe or nation.  Once a wholesaler has received its allocated share of Native American tax free stamps for the tribally licensed or owned retailers of a noncompacting tribe or nation for the quarter, that wholesaler may not receive any further Native American tax free stamps for tribally licensed or owned retailers of that tribe or nation during the quarter, absent good cause shown by verifiable information submitted by the wholesaler and/or that tribe or nation, which shall be considered and determined by the Tax Commission on a case-by-case basis.

6.  The Tax Commission is empowered and authorized to promulgate such rules and regulations as, in its discretion, shall be deemed necessary to implement and enforce the provisions of this section.

7.  The sale of cigarettes bearing the Native American tax-free stamp to a nonmember of the tribe or nation which licensed the tribally owned or licensed retailer shall, in accordance with the United States Supreme Court decision “Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma”, 498 U.S. 505 (1991), obligate that tribal retailer for payment of the applicable Oklahoma cigarette excise tax, together with the costs and attorney fees associated with any civil action brought to collect the unpaid Oklahoma cigarette excise tax.  Such actions may be instituted in the district court in and for the county in which the tribal retailer is located.

D.  The Oklahoma excise tax on all tobacco products other than cigarettes (hereafter “other tobacco products”) held for sale by Oklahoma-licensed wholesalers shall be paid by the wholesaler and stamps affixed thereto by the wholesaler pursuant to Section 403 of Title 68 of the Oklahoma Statutes, including those other tobacco products which may be purchased by members of noncompacting tribes and nations on the “Indian country” of such tribe or nation from a retailer licensed or owned by such tribe or nation.  The following procedures shall apply to the tax-free sale of other tobacco products:

1.  The probable demand for the tax-free consumption of other tobacco products by members of each noncompacting tribe or nation shall be determined by the Tax Commission by ascertaining the total membership in Oklahoma of the tribe or nation from the Bureau of Indian Affairs or other reliable source of public information regarding such membership, and multiplying that number by the percentage of users of such other tobacco products in Oklahoma or the United States, whichever is greater, based on the most recent data available from the State Department of Health and/or other reliable source of public information.  The product of that calculation shall be multiplied by the average yearly consumption of users of such other tobacco products in Oklahoma or the United States, whichever is greater, based on the most recent data available from the State Department of Health and/or other reliable source of public information.  The resulting number shall be deemed to constitute the probable demand for the tax-free consumption of other tobacco products by members of such noncompacting tribes or nations for a calendar year.

2.  A preliminary determination of probable demand shall be furnished to the governing authorities of each noncompacting tribe or nation, which may submit, for consideration by the Tax Commission, any verifiable information in its possession regarding such probable demand, including, but not limited to, a verifiable record of previous sales to tribal members or other statistical evidence.

3.  After consideration of all verifiable information furnished by a noncompacting tribe or nation pursuant to paragraph 2 of this subsection, the Tax Commission shall make its final determination of probable demand and furnish such determination to the subject noncompacting tribe or nation and to all Oklahoma-licensed other tobacco product wholesalers.

4.  Each calendar year, the Tax Commission shall establish, as to any and all Oklahoma-licensed other tobacco product wholesalers supplying other tobacco products to the tribally licensed or owned retailers of each noncompacting tribe or nation an allocation of the probable demand for such tribe or nation, based upon each wholesaler’s previous year’s reported sales of other tobacco products to the tribally licensed or owned retailers of such tribe or nation.  In making such allocation, the Tax Commission shall consider such other verifiable information as may be submitted by a licensed wholesaler or such tribe or nation.  Upon reaching a final determination of allocation, the Tax Commission shall advise the affected wholesaler and the tribe or nation.

5.  Oklahoma-licensed wholesalers may request and receive from the Tax Commission, on the 30th of each month, a refund and/or credit for the previous month’s tax-free sales of other tobacco products, equal to the lesser of:  one twelfth (1/12) of their allocated share of tax-free sales of other tobacco products to the tribally licensed or owned retailers of each noncompacting tribe or nation or verifiable tax-free sales to the licensed or owned tribal retailers of such tribe or nation.  Once a wholesaler has received such refund and/or credit for a previous month’s tax-free sales to the tribally licensed or owned retailers of each noncompacting tribe or nation, that wholesaler may not receive any further refund and/or credit for said previous month, absent good cause shown by verifiable information submitted by the wholesaler and/or the noncompacting tribe or nation, which shall be considered and determined by the Tax Commission on a case-by-case basis.

6.  The Tax Commission is empowered and authorized to promulgate such rules and regulations as, in its discretion, shall be deemed necessary to implement and enforce the provisions of this section.

7.  The tax-free sale of other tobacco products to a nonmember of the noncompacting tribe or nation which licenses the tribally owned or licensed retailer shall, in accordance with the United States Supreme Court decision “Oklahoma Tax Commission v. Citizen Potawatomi Indian Tribe of Oklahoma”, 498 U.S. 505 (1991), obligate that tribal retailer for payment of the applicable Oklahoma other tobacco product excise tax, together with the costs and attorney fees associated with any civil action brought to collect the unpaid Oklahoma other tobacco product excise tax.  Such actions may be instituted in the district court in and for the county in which the tribal retailer is located.

E.  The provisions of this section are intended to, and shall be construed to apply only to, sales of cigarettes and other tobacco products on the “Indian country” of noncompacting federally recognized Indian tribes or nations to the members of such tribes or nations.  In the event that a noncompacting tribe or nation enters into an agreement with the State of Oklahoma, pursuant to Section 346 of Title 68 of the Oklahoma Statutes, the terms of such compact shall take precedence over the provisions of this section, which shall have no application to any tribe or nation, while any compact between the State of Oklahoma and that tribe or nation is in force and effect.

F.  All cigarettes which are sold or held for sale at tribally owned or licensed stores shall have affixed thereto a stamp or stamps evidencing payment or nonpayment of the Oklahoma cigarette excise tax, as required by the provisions in this section.

G.  It shall be unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute or purchase contraband cigarettes.  Any person who engages in shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband cigarettes shall, upon conviction, be guilty of a misdemeanor punishable by a fine of not more than One Thousand Dollars ($1,000.00).  Any person convicted of a second or subsequent violation hereof shall be guilty of a felony and shall be punishable by fine of not more than Five Thousand Dollars ($5,000.00), by a term of imprisonment in the State Penitentiary for not more than two (2) years, or by both such fine and imprisonment.

H.  Any person who knowingly engages in shipping, transporting, receiving, processing, selling, distributing or purchasing contraband cigarettes shall be subject to the forfeiture of property as is provided by Section 305 of Title 68 of the Oklahoma Statutes and assessment of penalty as provided thereby and assessment for any delinquent taxes found to be owing.

SECTION 10.     AMENDATORY     68 O.S. 2001, Section 350.1, is amended to read as follows:

Section 350.1  If a wholesaler, jobber or warehouseman timely accepts documentation which shall require identification by drivers license and social security number as prescribed by the Oklahoma Tax Commission from a person claiming that the cigarettes will be sold at a tribally owned or licensed store, the wholesaler, jobber or warehouseman shall be relieved of any liability for any additional tax due or required to be collected should it later be determined that the cigarettes were not purchased for sale at a tribally owned or licensed store.

SECTION 11.     AMENDATORY     Section 4, Chapter 266, O.S.L. 2004 (68 O.S. Supp. 2008, Section 360.4), is amended to read as follows:

Section 360.4  A.  1.  Every tobacco product manufacturer whose cigarettes are sold in this state, whether directly or through a distributor, retailer or similar intermediary or intermediaries, shall execute and deliver on a form or in the manner prescribed by the Attorney General a certification to the Oklahoma Tax Commission and Attorney General, no later than April 30 of each year, certifying under penalty of perjury that, as of the date of certification, the tobacco product manufacturer either:

a.	is a participating manufacturer, or

b.	is in full compliance with the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.

2.  A participating manufacturer shall include in its certification a list of its brand families.  The participating manufacturer shall update the list thirty (30) calendar days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the Attorney General and the Oklahoma Tax Commission.

3.  A nonparticipating manufacturer shall include in its certification:

a.	a list of all of its brand families and the number of units sold for each brand family that were sold in the state during the preceding calendar year, and

b.	a list of all of its brand families that have been sold in the state at any time during the current calendar year:

(1)	indicating, by an asterisk, any brand family sold in the state during the preceding calendar year that is no longer being sold in the state as of the date of the certification, and

(2)	identifying by name and address any other manufacturer of the brand families in the preceding or current calendar year.

The nonparticipating manufacturer shall update the list thirty (30) calendar days prior to any corrected final addition to or modification of its brand families by executing and delivering a supplemental certification to the Attorney General and the Oklahoma Tax Commission.

4.  In the case of a nonparticipating manufacturer, the certification shall further certify that the nonparticipating manufacturer:

a.	is registered to do business in the state or has appointed a resident agent for service of process and provided notice thereof as required by Section 5 360.5 of this act title,

b.	has established and continues to maintain a qualified escrow fund, and

c.	has executed a qualified escrow agreement that has been reviewed and approved by the Attorney General and that governs the qualified escrow fund as defined in Section 600.22 of Title 37 of the Oklahoma Statutes that the nonparticipating manufacturer is in full compliance with the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes and the Master Settlement Agreement Complementary Act and any rules promulgated pursuant to the Master Settlement Agreement Complementary Act.

5.  The nonparticipating manufacturer shall include with certification:

a.	the name, address, and telephone number of the financial institution with which the nonparticipating manufacturer has established its qualified escrow fund,

b.	the account number of its qualified escrow fund and any subaccount number for the State of Oklahoma,

c.	the amount the nonparticipating manufacturer placed in the qualified escrow fund for cigarettes sold in Oklahoma during the preceding calendar year, the date and amount of each deposit to the fund, and any evidence or verification as may be deemed necessary by the Attorney General to confirm the information required by this paragraph, and

d.	the amount and date of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from the qualified escrow fund or from any other qualified escrow fund into which the nonparticipating manufacturer made escrow payments pursuant to Section 600.23 of Title 37 of the Oklahoma Statutes rules promulgated thereto.

6.  In the case of a nonparticipating manufacturer located outside of the United States, the certification shall further certify that the nonparticipating manufacturer has provided a declaration from each of its importers into the United States of any of its brand families to be sold in Oklahoma.  The declaration shall be on a form prescribed by the Attorney General and shall state that such importer accepts joint and several liability with the nonparticipating manufacturer for all escrow deposits due, for all penalties assessed and for payment of all costs and attorney fees imposed in accordance with Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.  Such declaration shall appoint for the declaration a resident agent for service of process in Oklahoma in accordance with Section 360.5 of this title.

7.  A tobacco product manufacturer may not include a brand family in its certification unless:

a.	in the case of a participating manufacturer, the participating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year, in the volume and shares determined pursuant to the Master Settlement Agreement, or

b.	in the case of a nonparticipating manufacturer, the nonparticipating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.

7. 8.  Nothing in this section shall be construed as limiting or otherwise affecting the right of this state to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the Master Settlement Agreement or for purposes of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.

8. 9.  Tobacco product manufacturers shall maintain all invoices and documentation of sales and other information relied upon for the certification for a period of five (5) years, unless otherwise required by law to maintain them for a greater period of time.

10.  At the time a manufacturer submits a yearly written certification pursuant to this section, the manufacturer shall pay to the Office of the Attorney General a fee of One Thousand Dollars ($1,000.00).  All fees collected pursuant to this paragraph shall be deposited in the Attorney General’s Revolving Fund.

B.  1.  Not later than ninety (90) calendar days after this act takes effect, the Attorney General shall develop and publish on its website a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of subparagraph a of paragraph 4 of subsection A of this section and all brand families that are listed in the certifications, except as otherwise provided in this section.

2.  The Attorney General shall not include or retain in the directory the name or brand families of any nonparticipating manufacturer that has failed to provide the required certification or whose certification the Attorney General determines is not in compliance with paragraphs 3, 4, and 5 of subsection A of this section, unless the Attorney General has determined that a violation has been cured to the satisfaction of the Attorney General.

3.  Neither a tobacco product manufacturer nor brand family shall be included or retained in the directory if the Attorney General concludes, in the case of a nonparticipating manufacturer, that:

a.	any escrow payment required pursuant to Section 600.23 of Title 37 of the Oklahoma Statutes for any period for any brand family, whether or not listed by the nonparticipating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the Attorney General, or

b.	any outstanding final judgment, including interest thereon, for a violation of the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes has not been fully satisfied for the brand family or manufacturer, or

c.	the nonparticipating manufacturer or such tobacco product manufacturer fails to provide reasonable assurance that it will comply with the requirements of this section or Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes, or the manufacturer has knowingly failed to disclose any material information required or knowingly made any material false statement in the certification of any supporting information or documentation provided.  As used in this subparagraph, reasonable assurances may include information and documentation establishing to the satisfaction of the Attorney General that a failure to pay in Oklahoma or elsewhere was the result of a good-faith dispute over the payment obligation.

4.  The Attorney General shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of the Master Settlement Agreement Complementary Act.

5.  Every stamping agent shall provide and update, as necessary, an electronic mail address to the Oklahoma Tax Commission and the Attorney General for the purpose of receiving any notifications as may be required by the Master Settlement Agreement Complementary Act.

6.  Any nonparticipating manufacturer may request, by facsimile transmission or other means to the Attorney General’s Tobacco Enforcement Unit, information regarding its current compliance status pursuant to this act and to Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.  Upon receipt of such request, the Attorney General shall inform the requesting nonparticipating manufacturer of its current compliance status before close of business within three (3) business days.

C.  It shall be unlawful for any person to:

1.  Affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory; and

2.  Sell, offer, or possess for sale, in this state, or import for personal consumption in this state, cigarettes of a tobacco product manufacturer or brand family not included in the directory.

SECTION 12.     AMENDATORY     Section 5, Chapter 266, O.S.L. 2004 (68 O.S. Supp. 2008, Section 360.5), is amended to read as follows:

Section 360.5  A.  Any nonresident or foreign nonparticipating manufacturer that has not registered to do business in this state as a foreign corporation or business entity shall appoint and continually engage without interruption, as a condition precedent to having its brand families included or retained in the directory, the services of an agent in this state to act as agent for the service of process on whom all process, and any action or proceeding against it concerning or arising out of the enforcement of the Master Settlement Agreement Complementary Act and Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes, may be served in any manner authorized by law.  The service shall constitute legal and valid service of process on the nonparticipating manufacturer.  The nonparticipating manufacturer shall provide the name, address, phone number, and proof of the appointment and availability of the agent to perform the duties of an agent pursuant to the Master Settlement Agreement Complementary Act and to the satisfaction of the Oklahoma Tax Commission and the Attorney General.  Any nonparticipating manufacturer located outside of the United States shall, as an additional condition precedent to having its brand families listed or retained in the Directory, cause each of its importers into the United States of any of its brand families to be sold in Oklahoma to appoint and continuously engage without interruption the services of an agent in the State of Oklahoma in accordance with the provisions of this act.  All obligations of a nonparticipating manufacturer imposed by this act with respect to appointment of its agent shall likewise apply to such importers with respect to appointment of their agents.

B.  The nonparticipating manufacturer shall provide notice to the Oklahoma Tax Commission and Attorney General thirty (30) calendar days prior to termination of the authority of an agent and shall further provide proof to the satisfaction of the Attorney General of the appointment of a new agent no less than five (5) calendar days prior to the termination of an existing agent appointment.  If an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the Oklahoma Tax Commission and Attorney General of the termination within five (5) calendar days and shall include proof to the satisfaction of the Attorney General of the appointment of a new agent.

C.  Any nonparticipating manufacturer whose cigarettes are sold in this state, who has not appointed and engaged an agent as required by this section, shall be deemed to have appointed the Secretary of State as its agent and may be proceeded against in courts of this state by service of process upon the Secretary of State.  However, the appointment of the Secretary of State as the agent shall not satisfy the condition precedent for having the brand families of the nonparticipating manufacturer included or retained in the directory.

SECTION 13.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 360.5-1 of Title 68, unless there is created a duplication in numbering, reads as follows:

For each nonparticipating manufacturer located outside the United States, each importer into the United States of any such nonparticipating manufacturer’s brand families that are sold in Oklahoma shall bear joint and several liability with such nonparticipating manufacturer for deposit of all escrow due, payment of all penalties imposed and payment of all costs and attorney fees imposed under Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes and the Master Settlement Agreement.

SECTION 14.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 360.9 of Title 68, unless there is created a duplication in numbering, reads as follows:

A.  Notwithstanding any other provision of law, if a newly qualified nonparticipating manufacturer is to be listed in the Oklahoma Tobacco Directory (the Directory), or if the Attorney General reasonably determines that any nonparticipating manufacturer who has filed a certification pursuant to Section 360.4 of Title 68 of the Oklahoma Statutes poses an elevated risk for noncompliance with the Master Settlement Agreement or with the Prevention of Youth Access to Tobacco Act, neither such nonparticipating manufacturer nor any of its brand families shall be included in the Directory unless and until such nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the performance of the manufacturer in accordance with Section 13 of this act, has posted a bond in accordance with this section.

B.  The bond shall be posted by corporate surety located within the United States in an amount equal to the greater of Fifty Thousand Dollars ($50,000.00) or the amount of escrow the manufacturer in either its current or predecessor form was required to deposit as a result of its sales in the previous calendar year in Oklahoma.  The bond shall be written in favor of the State of Oklahoma and shall be conditioned on the performance by the nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the performance of the manufacturer in accordance with Section 13 of this act, of all of its duties and obligations under the Prevention of Youth Access to Tobacco Act and the Master Settlement Agreement Complementary Act during the year in which the certification is filed and the next succeeding calendar year.

C.  A nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance with this section or the Prevention of Youth Access to Tobacco Act if:

1.  The nonparticipating manufacturer or any affiliate thereof has underpaid an escrow obligation with respect to any state at any time during the calendar year or within the past three (3) calendar years unless:

a.	the manufacturer did not make underpayment knowingly or recklessly and the manufacturer promptly cured the underpayment within one hundred eighty (180) days’ notice of it, or 

b.	the underpayment or lack of payment is the subject of a good-faith dispute as documented to the satisfaction of the Attorney General and the underpayment is cured within one hundred eighty (180) days of entry of a final order establishing the amount of the required escrow payment;

2.  Any state has removed the manufacturer or its brands or brand families or an affiliate or any of the affiliate’s brands or brand families from the state’s tobacco directory for noncompliance with the state law at any time during the calendar year or within the past three (3) calendar years; or 

3.  Any state has litigation pending against, or an unsatisfied judgment against, the manufacturer or any affiliate thereof for escrow or for penalties, costs, or attorney fees related to noncompliance with state escrow laws.

D.  As used in this section, “newly qualified nonparticipating manufacturer” means a nonparticipating manufacturer that has not previously been listed in the Oklahoma Tobacco Directory.  Such manufacturer may be required to post a bond in accordance with this section for the first three (3) years of their listing, or longer if they have been determined to pose an elevated risk for noncompliance.  Any other nonparticipating manufacturer that has been determined to pose an elevated risk for noncompliance shall be required to post a bond in accordance with this section for three (3) years or longer if such nonparticipating manufacturer still poses an elevated risk at the end of such three-year period.

SECTION 15.     AMENDATORY     68 O.S. 2001, Section 403.1, is amended to read as follows:

Section 403.1  The Oklahoma Tax Commission is hereby authorized and empowered, if in its discretion it deems practical and reasonable, to establish procedures for payment of excise taxes levied in Sections Section 401 et seq. of this title, for the collection from a wholesaler, jobber or warehouseman of payments in lieu of excise taxes authorized pursuant to a compact entered into by the State of Oklahoma and a federally recognized Indian tribe or nation pursuant to the provisions of subsection C of Section 1 of this act or for the payment of the tax specified in Section 10 of this act 346 of this title, in respect to articles containing tobacco, pursuant to monthly tobacco products tax reports in lieu of payment by purchasing and affixing stamps, notwithstanding the provisions of Sections Section 403 et seq. of this title.  Provided, exercise by the Tax Commission of the authority granted herein shall be by adoption of rules and regulations necessary to establish procedures for collection of such tax through monthly reporting procedures consistent with the provisions of Sections Section 401 et seq. of this title, other than those provisions relating directly to payment of such tax by purchasing and affixing stamps.

In the event the Tax Commission shall determine to collect such tax through monthly reporting procedures and adopt rules and regulations therefor:

1.  All provisions of Sections Section 401 et seq. of this title relating to unstamped tobacco products shall be interpreted to include and shall be applicable to all tobacco products for which the tax required by law has not been paid;

2.  No person, dealer, distributing agent or wholesaler, as defined in Section 401 of this title, shall possess, sell, use, exchange, barter, give away or in any manner deal with any tobacco products within this state upon which such tax is levied and unpaid, unless such person, dealer, retailer, distributing agent or wholesaler holds a valid tobacco license issued pursuant to Section 415 of this title; and

3.  Any person required to report and remit such taxes or payments in lieu of taxes required pursuant to a compact authorized by subsection C of Section 1 346 of this act title to the Tax Commission shall be allowed a discount of two percent (2%) of the tax due for maintaining and collecting such tax or payments for the benefit of the state, if such tax or payment is timely reported and remitted.

SECTION 16.    AMENDATORY     68 O.S. 2001, Section 413, is amended to read as follows:

Section 413.  (a) A.  The right of a common carrier in this state to carry unstamped cigars and tobacco products shall not be affected hereby; provided, that common carriers delivering untaxed tobacco products to any person in this state for the purpose of selling or consuming untaxed tobacco products in this state in violation of this article shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of Section 417 of this title.  Provided further, that should any such carrier sell any cigars and tobacco products in this state, such sale shall be subject to the stamp tax and other provisions of this article and to the rules and regulations of the Tax Commission.  The common carrier transporting tobacco products and cigars to a point within this state, or a bonded warehouseman or bailee having in its possession tobacco products and cigars, shall transmit to the Tax Commission a statement of such consignment of tobacco products and cigars, showing the date, point of origin, point of delivery, and to whom delivered.  All common carriers or bailees or warehousemen shall permit an examination by the Tax Commission, or its agents or legally authorized representatives, of their records relating to the shipment or receipt of tobacco products and cigars.  Any person who fails or refuses to transmit to the Tax Commission the aforesaid statement, or who refuses to permit the examination of his or her records by the Tax Commission or its legally authorized agents or representatives, shall be guilty of a misdemeanor and shall be subject to a fine of not to exceed Five Hundred Dollars ($500.00) and not less than Twenty-five Dollars ($25.00).

(b) B.  Wholesalers, jobbers, and/or warehousemen shall make a monthly report to the Tax Commission.  Such report must be received in the office of the Tax Commission not later than the fifteenth day of each month, showing purchases and invoices of all merchandise coming under this article, for the previous month; and the report shall also show the invoice number, the name and address of the consignee and consignor, the date, and such other information as may be requested by the Tax Commission.  Retailers or consumers purchasing tobacco products and cigars in drop shipments shall be required to make monthly reports to the Oklahoma Tax Commission, as are required of wholesale dealers wholesalers.

SECTION 17.     AMENDATORY     68 O.S. 2001, Section 415, is amended to read as follows:

Section 415.  All wholesalers, jobbers, retailers and consumers who purchase unstamped cigars and

A.  Every dealer and wholesaler of tobacco products covered in this article state, as a condition of carrying on such business, shall be required to purchase a tobacco annually secure from the Oklahoma Tax Commission a written license annually, the cost of which and shall be Five Dollars ($5.00) pay an annual fee of Two Hundred Fifty Dollars ($250.00); provided, such fee shall not be applicable if paid pursuant to Section 304 of this title.  The Tax Commission shall promulgate rules which provide a procedure for the issuance of a joint license for any wholesaler making application pursuant to this section and Section 304 of this title.  Application for such license, which shall be made upon such forms as prescribed by the Tax Commission, shall include the following:

1.  The applicant’s agreement to the jurisdiction of the Tax Commission and the courts of this state for purposes of enforcement of the provisions of Section 301 et seq. of this title; and

2.  The applicant's  agreement to abide by the provisions of Section 301 et seq. of this title and the rules promulgated by the Tax Commission with reference thereto.  This license, which will be for the ensuing year, must at all times be displayed in a conspicuous place so that it can be seen.  Persons operating more than one place of business must secure a license for each place of business.  "Place of business" shall be construed to include the place where orders are received, or where tobacco products are sold.  If tobacco products are sold on or from any vehicle, the vehicle shall constitute a place of business, and the license fee of Two Hundred Fifty Dollars ($250.00) shall be paid with respect thereto.  However, if the vehicle is owned or operated by a place of business for which the regular license fee is paid, the annual fee for the license with respect to such vehicle shall be only Ten Dollars ($10.00).  The expiration for such vehicle license shall expire on the same date as the current license of the place of business.

B.  Every retailer in this state, as a condition of carrying on such business, shall secure from the Tax Commission a license and shall pay therefor a fee of Thirty Dollars ($30.00).  Application for such license, which shall be made upon such forms as prescribed by the Tax Commission, shall include the following:

1.  The applicant’s agreement to the jurisdiction of the Tax Commission and the courts of this state for purposes of enforcement of the provisions of Section 301 et seq. of this title; and

2.  The applicant's agreement to abide by the provisions of Section 301 et seq. of this title and the rules promulgated by the Tax Commission with reference thereto;

3.  The applicant's agreement that it shall not purchase any tobacco products for resale from a supplier that does not hold a current wholesaler’s license issued pursuant to this section; and

4.  The applicant's agreement to sell tobacco products only to consumers.

Such license, which will be for the ensuing three (3) years, must at all times be displayed in a conspicuous place so that it can be seen.  Upon expiration of such license, the retailer to whom such license was issued may obtain a renewal license which shall be valid for three (3) years or until expiration of the retailer's sales tax permit, whichever is earlier, after which a renewal license shall be valid for three (3) years.  The manner and prorated fee for renewals shall be prescribed by the Tax Commission.  Every person operating under such license as a retailer and who owns or operates more than one place of business must secure a license for each place of business.  "Place of business" shall be construed to include places where orders are received or where tobacco products are sold.

C.  Every distributing agent shall, as a condition of carrying on such business, pursuant to written application on a form prescribed by and in such detailed form as the Tax Commission may require, annually secure from the Tax Commission a license, and shall pay therefor an annual fee of One Hundred Dollars ($100.00).  An application shall be filed and a license obtained for each place of business owned or operated by a distributing agent.  The license, which will be for the ensuing year, shall be consecutively numbered, nonassignable and nontransferable, and shall authorize the storing and distribution of unstamped tobacco products within this state when such distribution is made upon interstate orders only.

D.  1.  All wholesale, retail, and distributing agents’ licenses shall be nonassignable and nontransferable from one person to another person.  Such licenses may be transferred from one location to another location after an application has been filed with the Tax Commission requesting such transfer and after the approval of the Tax Commission.

2.  Wholesale, retail, and distributing agent's licenses shall be applied for on a form prescribed by the Tax Commission.  Any person operating as a wholesaler, retailer, or distributing agent must at all times have an effective unexpired license which has been issued by the Tax Commission.  If any such person or licensee continues to operate as such on a license issued by the Tax Commission which has expired, or operates without ever having obtained from the Tax Commission such license, such person or licensee shall, after becoming delinquent for a period in excess of fifteen (15) days, pay to the Tax Commission, in addition to the annual license fee, a penalty of twenty-five cents ($0.25) per day on each delinquent license for each day so operated in excess of fifteen (15) days.  The penalty provided for herein shall not exceed the annual license fee for such license.

E.  No license may be granted, maintained or renewed if any of the following conditions apply to the applicant.  For purposes of this section, "applicant" includes any combination of persons owning directly or indirectly, in the aggregate, more than ten percent (10%) of the ownership interests in the applicant:

1.  The applicant owes Five Hundred Dollars ($500.00) or more in delinquent tobacco products taxes;

2.  The applicant had a dealer, wholesaler, or retailer license revoked by the Tax Commission within the past two (2) years; or

3.  The applicant has been convicted of a crime relating to stolen or counterfeit tobacco products, or receiving stolen or counterfeit tobacco products.

F.  No person or entity licensed pursuant to the provisions of this section shall purchase tobacco products from or sell tobacco products to a person or entity required to obtain a license unless such person or entity has obtained such license.

G.  In addition to any civil or criminal penalty provided by law, upon a finding that a licensee has violated any provision of Section 301 et seq. of this title, the Tax Commission may revoke or suspend the license or licenses of the licensee pursuant to the procedures applicable to revocation of a license set forth in Section 418 of this title.

SECTION 18.     AMENDATORY     68 O.S. 2001, Section 418, is amended to read as follows:

Section 418.  A.  It shall be unlawful for any person to transport or possess unstamped tobacco products where the tax on such unstamped tobacco products exceeds the sum of One Dollar ($1.00).

B.  Except as otherwise provided in subsections C and D of this section, any person found guilty of violating the provisions of Section 401 et seq. of this title shall be deemed guilty of a misdemeanor, and shall upon conviction be punished by a an administrative fine of not more than Five Hundred Dollars ($500.00) or by confinement in the county jail for not to exceed thirty (30) days, or by both such fine and imprisonment.

C.  Any retailer violating the provisions of Section 4 of this act 403.2 of this title shall:

1.  For a first offense, be punished by an administrative fine of not more than One Hundred Dollars ($100.00) One Thousand Dollars ($1,000.00);

2.  For a second offense, punished by an administrative fine of not more than One Thousand Dollars ($1,000.00) Five Thousand Dollars ($5,000.00); and

3.  For a third or subsequent offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00) Ten Thousand Dollars ($10,000.00).

D.  Any wholesaler, distributing agent or dealer violating the provisions of Section 4 of this act 403.2 of this title shall:

1.  For a first offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00); and

2.  For a second or subsequent offense, be punished by an administrative fine of not more than Twenty Thousand Dollars ($20,000.00).

Administrative fines collected pursuant to the provisions of this subsection shall be deposited to the revolving fund created in Section 7 of this act 305.2 of this title.

E.  The Oklahoma Tax Commission shall immediately revoke the license of a person punished for a violation pursuant to the provisions of paragraph 3 of subsection C of this section or a person punished for a violation pursuant to the provisions of subsection D of this section.  A person whose license is so revoked shall not be eligible to receive another license pursuant to the provisions of Section 301 et seq. of this title for a period of ten (10) years.

SECTION 19.     AMENDATORY     68 O.S. 2001, Section 425, is amended to read as follows:

Section 425.  As used in Sections 9 through 13 of this act 425 through 429 of this title:

1.  "Tribally owned or licensed store" means a store or place of business which is owned and operated by a federally recognized Indian tribe or nation, other than a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 1 346 of this act title during the period that such compact is effective, on Indian country within the territorial jurisdiction of that tribe or nation or which is duly licensed by such tribe or nation pursuant to tribal laws or ordinances to conduct business located on Indian country within the territorial jurisdiction of that tribe or nation;

2.  "Federally recognized Indian tribe or nation" means an Indian tribal entity which is recognized by the United States Bureau of Indian Affairs as having a special relationship with the United States;

3.  "Indian country" means:

a.	land held in trust by the United States of America for the benefit of a federally recognized Indian tribe or nation,

b.	all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and including rights-of-way running through the reservation,

c.	all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and

d.	all Indian allotments, the Indian titles to which have not been extinguished, including individual allotments held in trust by the United States or allotments owned in fee by individual Indians subject to federal law restrictions regarding disposition of said allotments and including rights-of-way running through the same;

4.  "Member of the tribe" or "tribal member" means a person who is duly enrolled within the membership of the federally recognized Indian tribe or nation which owns or licenses the store;

5.  "Nonmember of the tribe or nation" or "nontribal member" means, with respect to a particular Indian tribe or nation, any person who is not a duly enrolled member of that tribe or nation, and shall include any person who is a member of another Indian tribe or nation but not a member of that tribe or nation;

6.  "Untaxed tobacco products" means packages of tobacco products upon which taxes required by state law have not been paid and includes tobacco products upon which the incorrect rate of tax applicable to the retail establishment at which the tobacco product is sold has been paid, regardless of the identity of the establishment which the tobacco product has been sold, shipped, consigned or delivered;

7.  "Contraband tobacco products" means untaxed tobacco products for which taxes are required to be paid pursuant to the provisions of Sections 9 through 12 of this act 425 through 428 of this title or Section 401 et seq. of Title 68 of the Oklahoma Statutes this title and which are in the possession, custody or control of any person, for the purpose of being consumed, sold, offered for sale or consumption or transported to any person in this state other than a wholesaler licensed under Section 415 of Title 68 of the Oklahoma Statutes this title; provided, contraband tobacco products shall not include untaxed tobacco products sold to veterans' hospitals, to state-operated domiciliary homes for veterans or to the United States for sale or distribution by said entities in accordance with Sections 419 through 421 of Title 68 of the Oklahoma Statutes this title;

8.  "Taxed tobacco products" means packages of tobacco products upon which taxes required by law have been paid;

9.  "Commission" means the Oklahoma Tax Commission; and

10.  "Person" shall include any individual, company, partnership, joint venture, joint agreement, association (mutual or otherwise), corporation, trust, estate, business trust receiver or trustee appointed by any state or federal court, syndicates or any combination acting as a unit, in the plural or singular number.

SECTION 20.     AMENDATORY     68 O.S. 2001, Section 426, is amended to read as follows:

Section 426.  A.  There is hereby levied upon the sale of tobacco products at a tribally owned or licensed store a tax in the amount of seventy-five percent (75%) of the tobacco products excise taxes imposed by Section 401 et seq. of Title 68 of the Oklahoma Statutes, which tax shall be in lieu of all sales and excise taxes on said tobacco products.

B.  A federally recognized Indian tribe or nation may receive a refund for a portion of the tax imposed pursuant to the provisions of this section if it can provide sufficient documentation that sales of tobacco products to its tribal members exceed twenty-five percent (25%) of its total sales of tobacco products.  The amount of the refund shall be the amount of tax paid which is attributable to sales of tobacco products made to tribal members which is in excess of twenty-five percent (25%) of the tribe's or nation's total sales of tobacco products.  Refunds shall be paid quarterly.  The Tax Commission shall promulgate rules and regulations to administer the provisions of this subsection.

C.  It shall be unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute or purchase contraband tobacco products.  Any person who engages in shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband tobacco products shall, upon conviction, be guilty of a misdemeanor punishable by a fine of not more than One Thousand Dollars ($1,000.00).  Any person convicted of a second or subsequent violation hereof shall be guilty of a felony and shall be punishable by a fine of not more than Five Thousand Dollars ($5,000.00), by a term of imprisonment in the State Penitentiary for not more than two (2) years, or by both such fine and imprisonment.

D. B.  Any person who knowingly engages in shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband tobacco products shall be subject to the forfeiture of property as is provided by Section 417 of Title 68 of the Oklahoma Statutes this title and assessment of penalty as provided thereby and assessment for any delinquent taxes found to be owing.

SECTION 21.     AMENDATORY     68 O.S. 2001, Section 427, is amended to read as follows:

Section 427.  Every wholesaler, jobber or warehouseman doing business within this state and required to secure a license as provided in Section 415 of Title 68 of the Oklahoma Statutes this title may sell tobacco products to tribally owned or licensed stores in this state.  It shall be the duty of the wholesaler, jobber or warehouseman to collect, report and remit the tax imposed by Section 10 of this act 349.1 of this title on the tobacco products inventory which are tax-free pursuant to Section 349.1 of this title sold to a tribally owned or licensed store.

SECTION 22.     AMENDATORY     68 O.S. 2001, Section 428, is amended to read as follows:

Section 428.  A.  All untaxed tobacco products sold or shipped to tribally owned or licensed stores in this state by wholesalers, jobbers or warehousemen not licensed by this state pursuant to the provisions of Section 415 of Title 68 of the Oklahoma Statutes this title for the purpose of selling or consuming untaxed tobacco products in this state in violation of this act Section 349 or 401 et seq. of this title shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of Section 417 of Title 68 of the Oklahoma Statutes this title.

B.  Any peace officer of this state, including, but not limited to, officers of the Department of Public Safety or the Oklahoma State Bureau of Investigation, any sheriff, any salaried deputy sheriff or any municipal police officer is authorized to stop any vehicle upon any road or highway of this state in order to inspect the bill of lading or to take such action as may be necessary to determine if untaxed tobacco products are being sold or shipped in violation of the provisions of this section.  Such officers shall also have the duty to cooperate with the Oklahoma Tax Commission to enforce the provisions of this act.

SECTION 23.     REPEALER     68 O.S. 2001, Sections 349, 427.1 and 427.2, are hereby repealed.

SECTION 24.  This act shall become effective January 1, 2010.

Passed the Senate the 21st day of May, 2009.

	
Presiding Officer 	of the Senate

Passed the House of Representatives the 22nd day of May, 2009.

	
Presiding Officer	of the House
	of Representatives