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H.B. 344

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INCREASE IN CIGARETTE TAX

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1997 GENERAL SESSION

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STATE OF UTAH

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Sponsor: Gene Davis

5    AN ACT RELATING TO REVENUE AND TAXATION; INCREASING THE TAX RATE
6    LEVIED ON CIGARETTES; PROVIDING THE PURPOSES FOR WHICH THE REVENUES
7    GENERATED BY THE CIGARETTE TAX INCREASE MAY BE USED; CREATING A
8    RESTRICTED ACCOUNT TO BE USED BY THE DIVISION OF SUBSTANCE ABUSE;
9    MAKING TECHNICAL CHANGES; AND PROVIDING AN EFFECTIVE DATE.
10    This act affects sections of Utah Code Annotated 1953 as follows:
11    AMENDS:
12         59-14-204, as last amended by Chapter 266, Laws of Utah 1991
13    Be it enacted by the Legislature of the state of Utah:
14        Section 1. Section 59-14-204 is amended to read:
15         59-14-204. Tax basis -- Rate -- Future increase.
16        (1) There is levied a tax upon the sale, use, or storage of cigarettes in the state.
17        (2) The rates of the tax levied under Subsection (1) are:
18        (a) [1.325] 1.825 cents on each cigarette, for all cigarettes weighing not more than three
19    pounds per thousand cigarettes; and
20        (b) [1.925] 2.425 cents on each cigarette, for all cigarettes weighing in excess of three
21    pounds per thousand cigarettes.
22        (3) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
23    distributor, wholesaler, retailer, user, or consumer.
24        (4) The tax rates specified in this section shall be increased by the commission by the same
25    amount as any future reduction in the federal excise tax on cigarettes.
26        (5) Beginning on July 1, 1997, the revenues generated by the increase in the cigarette tax
27    under this section enacted during the 1997 Annual General Session shall be annually distributed


1    as follows:
2        (a) 50% of the revenues shall be deposited into the Comprehensive Health Insurance Pool
3    Enterprise Fund created in Section 31A-29-120 to be used as provided in Title 31A, Chapter 29,
4    Comprehensive Health Insurance Pool Act; and
5        (b) 50% of the revenues shall be deposited into the restricted account created in Subsection
6    (6).
7        (6) (a) There is created within the General Fund a restricted account known as the
8    "Cigarette Tax Restricted Account."
9        (b) The Division of Substance Abuse created in Section 62A-8-103 shall expend the funds
10    in the restricted account for:
11        (i) education on preventing tobacco use;
12        (ii) tobacco use cessation; and
13        (iii) a public information campaign on preventing tobacco use.
14        (c) The Division of Substance Abuse shall annually report to the Legislature regarding the
15    use of the funds and the resulting impact on tobacco use prevention and cessation.
16        Section 2. Effective date.
17        This act takes effect on July 1, 1997.




Legislative Review Note
    as of 2-11-97 2:43 PM


A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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