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H.B. 238 Enrolled






Sponsor: Carl R. Saunders

                  Martin R. Stephens
                  Brent D. Parker
                  Peggy Wallace
                  David N. Cox
                  Michael R. Styler
                  Kory M. HoldawayBradley T. Johnson
Neil A. Hansen
LaWanna Lou Shurtliff
Afton B. Bradshaw
Patricia W. Jones
Paul RayCarol Spackman Moss
David L. Hogue
Douglas C. Aagard
Patrice M. Arent
Gerry A. Adair                   This act modifies the Cigarette and Tobacco Tax and Licensing Act. This act increases the
                  rates of tax levied on cigarettes and specifies how a portion of any increase in cigarette tax
                  revenues will be used.
                  This act affects sections of Utah Code Annotated 1953 as follows:
                      59-14-204, as last amended by Chapter 190, Laws of Utah 2000
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 59-14-204 is amended to read:
                       59-14-204. Tax basis -- Rate -- Future increase -- Restricted account -- Use of
                      (1) Except for cigarettes described under Section 59-14-210 , there is levied a tax upon the
                  sale, use, or storage of cigarettes in the state.
                      (2) The rates of the tax levied under Subsection (1) are:
                      (a) [2.575] 3.475 cents on each cigarette, for all cigarettes weighing not more than three
                  pounds per thousand cigarettes; and
                      (b) [3.175] 4.075 cents on each cigarette, for all cigarettes weighing in excess of three
                  pounds per thousand cigarettes.
                      (3) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
                  distributor, wholesaler, retailer, user, or consumer.

                      (4) The tax rates specified in this section shall be increased by the commission by the same
                  amount as any future reduction in the federal excise tax on cigarettes.
                      (5) (a) There is created within the General Fund a restricted account known as the "Cigarette
                  Tax Restricted Account."
                      (b) Beginning on July 1, 1998, $250,000 of the revenues generated by the increase in the
                  cigarette tax under this section enacted during the 1997 Annual General Session shall be annually
                  deposited into the account.
                      (c) The Department of Health shall expend the funds deposited in the account under
                  Subsection (5)(b) for a tobacco prevention and control media campaign targeted towards children.
                      (d) The following revenue generated from the tax increase imposed under Subsection (1)
                  during the 2002 General Session shall be deposited in the Cigarette Tax Restricted Account:
                      (i) 22% of the revenue to be annually appropriated to the Department of Health for tobacco
                  prevention, reduction, cessation, and control programs;
                      (ii) 15% of the revenue to be annually appropriated to the University of Utah Health
                  Sciences Center for the Huntsman Cancer Institute for cancer research; and
                      (iii) 21% of the revenue to be annually appropriated to the University of Utah Health
                  Sciences Center for medical education at the University of Utah School of Medicine.
                      (e) Any balance remaining in the Cigarette Tax Restricted Account at the end of the fiscal
                  year shall be appropriated during the next fiscal year for the purposes set forth in Subsections
                  (5)(d)(i) through (5)(d)(iii) in proportion to the amount of revenue deposited into the account for
                  each purpose.
                      (f) The Legislature shall give particular consideration to appropriating any revenues resulting
                  from the change in tax rates under Subsection (2) adopted during the 2002 Annual General Session
                  and not otherwise appropriated pursuant to Subsection (5)(d) to enhance Medicaid provider
                  reimbursement rates and medical coverage for the uninsured.
                      (g) Any program or entity that receives funding under Subsection (5)(d) shall provide an
                  annual report to the Health and Human Services Interim Committee no later that September 1 of                   each
                  year. The report shall include:

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                      (i) the amount funded;
                      (ii) the amount expended;
                      (iii) a description of the effectiveness of the program; and
                      (iv) if the program is a tobacco cessation program, the report required in Section 63-97-401 .

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