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Second Substitute H.B. 238

Representative Carl R. Saunders proposes the following substitute bill:


             1     
CIGARETTE AND TOBACCO TAX

             2     
AMENDMENTS

             3     
2002 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Carl R. Saunders

             6      Martin R. Stephens
             7      Brent D. Parker
             8      Peggy Wallace
             9      David N. Cox
             10      Michael R. Styler
             11      Kory M. HoldawayBradley T. Johnson
Neil A. Hansen
LaWanna Lou Shurtliff
Afton B. Bradshaw
Patricia W. JonesPaul Ray
Carol Spackman Moss
David L. Hogue
Douglas C. Aagard
Patrice M. Arent              12      This act modifies the Cigarette and Tobacco Tax and Licensing Act. This act increases the
             13      rates of tax levied on cigarettes h [ and other tobacco products ] h and specifies how a portion of
             14      any increase in cigarette tax revenues will be used.
             15      This act affects sections of Utah Code Annotated 1953 as follows:
             16      AMENDS:
             17          59-14-204, as last amended by Chapter 190, Laws of Utah 2000
             18           h [ 59-14-302, as renumbered and amended by Chapter 2, Laws of Utah 1987 ] h
             19      Be it enacted by the Legislature of the state of Utah:
             20          Section 1. Section 59-14-204 is amended to read:
             21           59-14-204. Tax basis -- Rate -- Future increase -- Restricted account -- Use of
             22      revenues.
             23          (1) Except for cigarettes described under Section 59-14-210 , there is levied a tax upon the
             24      sale, use, or storage of cigarettes in the state.
             25          (2) The rates of the tax levied under Subsection (1) are:
             26          (a) [2.575] h [ 4.075 ] 3.475 h cents on each cigarette, for all cigarettes weighing not more than
             26a      three


             27      pounds per thousand cigarettes; and
             28          (b) [3.175] h [ 4.675 ] 4.075 h cents on each cigarette, for all cigarettes weighing in excess of
             28a      three
             29      pounds per thousand cigarettes.
             30          (3) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
             31      distributor, wholesaler, retailer, user, or consumer.
             32          (4) The tax rates specified in this section shall be increased by the commission by the same
             33      amount as any future reduction in the federal excise tax on cigarettes.
             34          (5) (a) There is created within the General Fund a restricted account known as the
             35      "Cigarette Tax Restricted Account."
             36          (b) Beginning on July 1, 1998, $250,000 of the revenues generated by the increase in the
             37      cigarette tax under this section enacted during the 1997 Annual General Session shall be annually
             38      deposited into the account.
             39          (c) The Department of Health shall expend the funds deposited in the account under
             40      Subsection (5)(b) for a tobacco prevention and control media campaign targeted towards children.
             41          (d) The following h [ amounts of tax levied under Subsection (1) ] REVENUE GENERATED
             41a      FROM THE TAX INCREASE IMPOSED UNDER SUBSECTION (1) DURING THE 2002 GENERAL
             41b      SESSION h shall be deposited in the
             42      Cigarette Tax Restricted Account:
             43          (i) h [ an amount equal to a tax of 0.5 cents on each cigarette taxed under Subsection (1), ]
             43a      S [ 33% ] 22% s OF THE REVENUE h to
             44      be annually appropriated to the Department of Health for tobacco prevention, reduction, cessation,
             45      and control programs;
             46          (ii) h [ an amount equal to a tax of 0.25 cents on each cigarette taxed under Subsection (1), ]
             46a      S [ 10% ] 15% s OF THE REVENUE h
             47      to be annually appropriated to the University of Utah Health Sciences Center for the Huntsman
             48      Cancer Institute for cancer research; and
             49          (iii) h [ an amount equal to a tax of 0.25 cents on each cigarette taxed under Subsection (1), ]
             49a      21% OF THE REVENUE h
             50      to be annually appropriated to the h [ Medical Education Council ] UNIVERSITY OF UTAH HEALTH
             50a      SCIENCES CENTER h for medical education at the
             51      University of Utah School of Medicine.
             52          (e) Any balance remaining in the Cigarette Tax Restricted Account at the end of the fiscal
             53      year shall be appropriated during the next fiscal year for the purposes set forth in Subsections


             54      (5)(d)(i) through (5)(d)(iii) in proportion to the amount of revenue deposited into the account for
             55      each purpose.
             56          (f) The Legislature shall give particular consideration to appropriating any revenues
             57      resulting from the change in tax rates under Subsection (2) adopted during the 2002 Annual


             58      General Session and not otherwise appropriated pursuant to Subsection (5)(d) to enhance Medicaid
             59      provider reimbursement rates and medical coverage for the uninsured.
             59a           h (g) ANY PROGRAM OR ENTITY THAT RECEIVES FUNDING UNDER SUBSECTION (5)(d)
             59b      SHALL PROVIDE AN ANNUAL REPORT TO THE HEALTH AND HUMAN SERVICES INTERIM
             59c      COMMITTEE NO LATER THAN SEPTEMBER 1 OF EACH YEAR. THE REPORT SHALL INCLUDE:
             59d          (i) THE AMOUNT FUNDED;
             59e          (ii) THE AMOUNT EXPENDED;
             59f          (iii) A DESCRIPTION OF THE EFFECTIVENESS OF THE PROGRAM; AND
             59g          (iv) IF THE PROGRAM IS A TOBACCO CESSATION PROGRAM, THE REPORT REQUIRED IN
             59h      SECTION 63-97-401. h
             60           h [ Section 2. Section 59-14-302 is amended to read:
             61          59-14-302. Tax basis -- Rate.
             62          (1) There is levied a tax upon the sale, use, or storage of tobacco products in the state. The
             63      rate of the tax is [35%] 55% of the manufacturer's sales price. The sales price is the amount
             64      charged by the manufacturer less all discounts, and includes original Utah destination freight
             65      charges, whether the product is shipped f.o.b. origin or f.o.b. destination and regardless of who
             66      pays the freight charge.
             67          (2) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
             68      distributor, wholesaler, retailer, user, or consumer.
] h


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