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H.B. 312 Enrolled

                 

NONPARTICIPATING TOBACCO

                 
MANUFACTURER'S FEE

                 
2004 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: David Ure

                 
                  LONG TITLE
                  General Description:
                      This bill modifies the Cigarette and Tobacco Tax and Licensing Act by imposing an
                  equity assessment on nonparticipating manufacturer cigarettes.
                  Highlighted Provisions:
                      This bill:
                      .    defines terms;
                      .    levies an equity assessment of 1.75 cents per cigarette on nonparticipating tobacco
                  product manufacturers; and
                      .    designates cigarettes in violation of this section as contraband goods.
                  Monies Appropriated in this Bill:
                      None
                  Other Special Clauses:
                      This bill takes effect on July 1, 2004.
                  Utah Code Sections Affected:
                  AMENDS:
                      59-14-213, as last amended by Chapters 52 and 175, Laws of Utah 2002
                  ENACTS:
                      59-14-214, Utah Code Annotated 1953
                 
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 59-14-213 is amended to read:
                       59-14-213. Contraband goods.


                      (1) Any cigarettes in violation of any state or federal law, including Sections 59-14-203 ,
                  59-14-205 , 59-14-211 [or], Subsection 59-14-212 (1), or Section 59-14-214 are contraband
                  goods and may be seized without a warrant by the commission, its employees, or any peace
                  officer of the state or its political subdivisions.
                      (2) Any goods seized pursuant to Subsection (1) shall be delivered to the commission and
                  destroyed.
                      (3) Any cigarettes, as defined in Subsection 59-22-202 (4), in violation of Subsection
                  59-14-408 (2) are contraband goods and may be seized in accordance with Subsections (1) and
                  (2).
                      Section 2. Section 59-14-214 is enacted to read:
                      59-14-214. Nonparticipating manufacturer equity assessment.
                      (1) As used in this section, "nonparticipating manufacturer" means a tobacco product
                  manufacturer, as defined in Subsection 59-22-202 (9), that is not a participating manufacturer
                  within the meaning of Subsection II(jj) of the Master Settlement Agreement, as defined in
                  Subsection 59-22-202 (5).
                      (2) (a) There is levied an equity assessment, at the rate of 1.75 cents on each cigarette, for
                  all cigarette packages of nonparticipating manufacturers to which a stamp is affixed as required
                  under Section 59-14-205 .
                      (b) The equity assessment imposed by this section is in addition to all other assessments,
                  fees, and taxes levied under existing law.
                      (c) The equity assessment imposed by this section shall be paid by affixing a stamp in the
                  manner and at the time described in Section 59-14-205 .
                      (d) Except as otherwise provided in this section, the equity assessment shall be collected,
                  paid, administered, and enforced in the same manner as the tax on cigarettes levied by Section
                  59-14-204 .
                      (3) The purposes of this equity assessment are:
                      (a) to recover health care costs to the state imposed by nonparticipating manufacturers;
                      (b) to prevent nonparticipating manufacturers from undermining the state's policy of

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                  reducing underage smoking by offering cigarettes for sale substantially below the prices of
                  cigarettes of other manufacturers;
                      (c) to protect funding, which is reduced as a result of the growth of nonparticipating
                  manufacturer cigarette sales, for programs funded in whole or in part by payments to the state
                  under the Master Settlement Agreement, as defined in Subsection 59-22-202 (5);
                      (d) to recoup settlement-payment revenue lost to the state as a result of nonparticipating
                  manufacturer cigarette sales; and
                      (e) to fund enforcement and administration of:
                      (i) Section 59-14-408 ;
                      (ii) Sections 59-22-201 through 59-22-203 , related to nonparticipating manufacturers;
                  and
                      (iii) the equity assessment imposed by this section.
                      (4) (a) Each manufacturer, distributor, wholesaler, or retail dealer who under Section
                  59-14-205 affixes a stamp to a package of cigarettes, shall report monthly to the commission for
                  each place of business, the number and denominations of stamps affixed to individual packages of
                  nonparticipating manufacturer cigarettes sold by the manufacturer, distributor, wholesaler, or
                  retail dealer in the preceding month, including the manufacturer and brand family.
                      (b) A person required to file a report under this section is subject to the penalties under
                  Section 59-1-401 for failing to file a report in a timely manner, or for supplying false or fraudulent
                  information.
                      Section 3. Effective date.
                      This bill takes effect on July 1, 2004.

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