H.B. 238 Enrolled

CIGARETTE AND TOBACCO TAX
AMENDMENTS
2002 GENERAL SESSION
STATE OF UTAH
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:
AMENDS:
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
revenues.
(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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