*** Pending ***

COMMITTEE AMENDMENT NO 1 PROPOSED TO

House Bill No. 1070

BY: Committee

     Amend by striking all after the enacting clause and inserting in lieu thereof the following:

 


     SECTION 1.  The purpose of this act is to:

          (a)  Prevent nonsettling manufacturers from undermining this state's policy of discouraging underage smoking by offering cigarettes and cigarette tobacco products at prices that are substantially below the prices of cigarettes and cigarette tobacco products of other manufacturers;

          (b)  Protect the tobacco settlement agreement, and funding, which has been reduced because of the growth of sales of nonsettling-manufacturer cigarettes and cigarette tobacco products, for programs that are funded wholly or partly by payments to this state under the tobacco settlement agreement and recoup for this state settlement payment revenue lost because of sales of nonsettling-manufacturer cigarettes and cigarette tobacco products;

          (c)  Provide funding to enforce and administer this act and any legislation relating to nonsettling manufacturers; and

          (d)  Provide funding for any other purpose the Legislature determines.

     SECTION 2.  As used in this act:

          (a)  "Brand family" means each style of cigarettes or cigarette tobacco products sold under the same trademark and differentiated from one another by means of additional modifiers, including "menthol," "lights," "kings," and "100s."  The term includes any style of cigarettes or cigarette tobacco products that have a brand name, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or other indication of product identification that is identical to, similar to, or identifiable with a previously known brand of cigarettes or cigarette tobacco products.

          (b)  "Cigarette" means any product that contains nicotine and is intended to be burned or heated under ordinary conditions of use.  The term includes:

              (i)  A roll of tobacco wrapped in paper or another substance that does not contain tobacco;

              (ii)  Tobacco, in any form, that is functional in a product that, because of the product's appearance, the type of tobacco used in the filler, or the product's packaging and labeling, is likely to be offered to or purchased by a consumer as a cigarette; or

              (iii)  A roll of tobacco wrapped in any substance containing tobacco that, because of the product's appearance, the type of tobacco used in the filler, or the product's packaging and labeling, is likely to be offered to or purchased by a consumer as a cigarette.

          (c)  "Cigarette tobacco product" means roll-your-own tobacco or tobacco that, because of the tobacco's appearance, type, packaging, or labeling, is suitable for use in making cigarettes and is likely to be offered to or purchased by a consumer for that purpose.

          (d)  "Commissioner" means the Chairman of the State Tax Commission and his authorized agents and employees.

          (e)  "Manufacturer" means a person that manufactures, fabricates or assembles cigarettes for sale or distribution.  For purposes of this act, the term includes a person that is the first importer into the United States of cigarettes and cigarette tobacco products manufactured outside the United States.

          (f)  "Master settlement agreement" means the settlement agreement and related documents entered into in 1998 by forty-six (46) states and leading United States tobacco manufacturers.

          (g)  "Nonsettling manufacturer" means a manufacturer of cigarettes that did not sign the tobacco settlement agreement.

     (h)  "Nonsettling-manufacturer cigarettes" means cigarettes manufactured, fabricated, assembled or imported by a nonsettling manufacturer.

          (i)  "Nonsettling manufacturer cigarette tobacco products" means cigarette tobacco products manufactured, fabricated assembled or imported by a nonsettling manufacturer.

          (j)  "Tobacco settlement agreement" means the Comprehensive Settlement Agreement and Release filed December 29, 1997, in the Chancery Court of Jackson County, State of Mississippi, in the case styled In Re Mike Moore, Attorney General, ex rel. State of Mississippi Tobacco Litigation, Cause No. 94-1429, and all subsequent amendments thereto.

          (k)  "Distributor" shall have the same meaning ascribed to that term in Section 27-69-3.

     SECTION 3.  (1)  A fee is imposed on the sale, use, consumption or distribution in this state of:

          (a)  Nonsettling-manufacturer cigarettes if a stamp is required to be affixed to a package of those cigarettes under the Tobacco Tax Law;

          (b)  Nonsettling-manufacturer cigarettes that are sold, purchased or distributed in this state but that are not required to have a stamp affixed to a package of those cigarettes under the Tobacco Tax Law; and

          (c)  Nonsettling manufacturer cigarette tobacco products that are subject to the tax imposed by Section 27-69-13.

     (2)  The fee imposed by this act does not apply to cigarettes or cigarette tobacco products that are included in computing payments due to be made by a settling manufacturer under the tobacco settlement agreement.

     (3)  The fee imposed by this act is in addition to any other privilege, license, fee or tax required or imposed by state law.

     (4)  Except as otherwise provided by this act, the fee imposed by this act is imposed, collected, paid, administered, and enforced in the same manner, taking into account that the fee is imposed on nonsettling manufacturers, as the taxes imposed by the Tobacco Tax Law, as appropriate.

     SECTION 4.  (1)  Except as provided by subsection (2) of this section, the fee is imposed at the rate of Two and Three-twentieths Cents (2-3/20¢) for:

          (a)  Each nonsettling-manufacturer cigarette; and

          (b)  Each nine one-hundredths (0.09) ounce of nonsettling-manufacturer cigarette tobacco product.

     (2)  On January 1 of each year, the fee prescribed by subsection (1) of this section shall increase by the greater of:

          (a)  Three percent (3%); or

          (b)  The percentage increase in the most recent annual revised Consumer Price Index for all Urban Consumers, as published by the Federal Bureau of Labor Statistics of the United States Department of Labor.

     (3)  The revenue collected from the fee imposed by this section shall be deposited into the State General Fund.

     SECTION 5.  (1)  A distributor required to file a monthly report under Section 27-69-35, shall, in addition to the information required by that section, include in the report the following information:

          (a)  The number and denominations of stamps affixed to individual packages of nonsettling manufacturer cigarettes during the preceding month;

          (b)  The number of individual packages of nonsettling manufacturer cigarettes sold or purchased in this state or otherwise distributed in this state for sale in the United States; and

          (c)  Any other information the commissioner considers necessary or appropriate to determine the amount of the fee imposed by this act or to enforce this act.

     (2)  The information required by subsection (1)(a) and (b) must be itemized for each place of business and by manufacturer and brand family.

     (3)  The requirement to report information under this section shall be enforced in the same manner as the requirement to deliver to or file with the comptroller a report required under the Tobacco Tax Law.

     SECTION 6.  (1)  Each month, not later than the 10th day after the date the commissioner receives the information required by Section 5 of this act, the commissioner shall:

          (a)  Compute the amount of the fee imposed by this act that each nonsettling manufacturer owes for that reporting period based on that information and any other information available to the commissioner; and

          (b)  Mail to each nonsettling manufacturer a notice of the amount of fee the manufacturer owes.

     (2)  Not later than the 15th day of the month after the month in which the commissioner mails a nonsettling manufacturer a notice under subsection (1) of this section, the nonsettling manufacturer shall send to the commissioner the amount of the fee due according to the notice.

     SECTION 7.  (1)  Not later than the first day of each month, a nonsettling manufacturer who is required to pay the fee imposed by this act shall certify to the Attorney General that the manufacturer is in compliance with this act and has paid in full the fee imposed by this act.

     (2)  The Attorney General shall develop, maintain and publish on the Attorney General's Internet Web site a directory listing of all nonsettling manufacturers that have been provided current, accurate and complete certifications.  The listing shall also include all manufacturers of cigarettes that signed the tobacco settlement agreement.

     (3)  The Attorney General shall provide the list described by subsection (2) of this section to any person on request.

     SECTION 8.  (1)  If cigarettes or cigarette tobacco products of a nonsettling manufacturer are not offered for sale or distribution in this state on September 1, 2005, the nonsettling manufacturer may not offer those cigarettes or cigarette tobacco products for sale or distribution in this state after that date unless the manufacturer first prepays the fee imposed by this act for sales of cigarettes and cigarette tobacco products that will occur in the first calendar month in which they are sold or distributed in this state.

     (2)  The amount a nonsettling manufacturer is required to prepay under this section is equal to the greater of:

          (a)  The rate prescribed by Section 4 of this act in effect on that date multiplied by:

              (i)  The number of cigarettes the commissioner reasonably projects that the nonsettling manufacturer will sell or distribute in this state during that calendar month; and

              (ii)  Each nine one-hundredths (0.09) ounce of nonsettling manufacturer cigarette tobacco products the commissioner reasonably projects that the nonsettling manufacturer will sell or distribute in this state during that calendar month; or

          (b)  Fifty Thousand Dollars ($50,000.00).

     (3)  The fee imposed by this section does not apply to cigarettes or cigarette tobacco products that are included in computing payments due to be made by a settling manufacturer under the tobacco settlement agreement.

     (4)  The commissioner may require a nonsettling manufacturer to provide any information reasonably necessary to determine the prepayment amount.

     (5)  The commissioner shall establish procedures to:

          (a)  Reimburse a nonsettling manufacturer if the actual sales or distributions in the first calendar month are less than the projected sales or distributions; and

          (b)  Require additional payments if the actual sales or distributions in the first calendar month are greater than the projected sales or distributions.

     (6)  A nonsettling manufacturer shall pay the fee imposed by this act in the manner provided by Section 27-69-91, beginning in the second calendar month in which the manufacturer offers the cigarettes or cigarette tobacco products for sale or distribution in this state.

     SECTION 9.  (1)  In addition to prepaying the fee required by Section 8 of this act, a nonsettling manufacturer described by Section 8(1) of this act shall, before the date the cigarettes or cigarette tobacco products are offered for sale or distribution in this state, provide to the Attorney General on a form prescribed by the Attorney General:

          (a)  The nonsettling manufacturer's complete name, address and telephone number;

          (b)  The date that the nonsettling manufacturer will begin offering cigarettes or cigarette tobacco products for sale or distribution in this state;

          (c)  The names of the brand families of the cigarettes or cigarette tobacco products that the nonsettling manufacturer will offer for sale or distribution in this state;

          (d)  A statement that the nonsettling manufacturer intends to comply with this act; and

          (e)  The name, address, telephone number and signature of an officer of the nonsettling manufacturer attesting to all of the included information.

     (2)  The Attorney General shall make the information provided under this section available to the commissioner.

     SECTION 10.  (1)  Cigarettes and cigarette tobacco products of a nonsettling manufacturer that has not complied with this act, including full payment of the fee imposed by this act, shall be treated as tobacco for which the tax assessed by the Tobacco Tax Law, has not been paid, and the manufacturer is subject to all penalties imposed by that act for violations of that act.

     (2)  The commissioner shall provide to a nonsettling manufacturer and each distributor authorized to affix tax stamps pursuant to the Tobacco Tax Act, a notice of noncompliance with this act if the manufacturer:

          (a)  Does not pay in full the fee imposed by this act; or

          (b)  Is not included on the list described by Section 7(2) of this act.

     (3)  If a nonsettling manufacturer does not appear in the Attorney General's directory required by Section 7(2) of this act, or upon receipt of the notice of noncompliance described in subsection (2) of this section with respect to a nonsettling manufacturer, no distributor may, with respect to cigarettes manufactured by such nonsettling manufacturer:

          (a)  Pay the tax imposed by the Tobacco Tax Law;

          (b)  Affix to a package of cigarettes the stamp required by Section 27-69-15; or

          (c)  Otherwise purchase, sell or distribute cigarettes manufactured by such nonsettling manufacturer in this state.

     SECTION 11.  Any nonsettling manufacturer that complies with the provisions of this act shall be granted the same civil immunity granted to settling manufacturers in the tobacco settlement agreement; provided, however, that such nonsettling manufacturer shall be subject, when applicable, to the same mandates and restrictions imposed in the settlement agreement on the settling manufacturers.

     SECTION 12.  This act applies without regard to Section 27-69-19, or any other law that might be read to create an exemption for interstate sales.

     SECTION 13.  (1)  Not later than September 30, 2006, a nonsettling manufacturer that is offering cigarettes or cigarette tobacco products for sale or distribution in this state on September 1, 2006, shall provide to the Attorney General on a form prescribed by the Attorney General:

          (a)  The nonsettling manufacturer's complete name, address, and telephone number;

          (b)  The date that the nonsettling manufacturer began offering cigarettes or cigarette tobacco products for sale or distribution in this state;

          (c)  The names of the brand families of the cigarettes or cigarette tobacco products that the nonsettling manufacturer offers for sale or distribution in this state;

          (d)  A statement that the nonsettling manufacturer intends to comply with this act; and

          (e)  The name, address, telephone number and signature of an officer of the nonsettling manufacturer attesting to all of the included information.

     (2)  The Attorney General shall make the information provided under subsection (1) of this section available to the commissioner.

     SECTION 14.  This act shall take effect and be in force from and after September 1, 2006.


     Further, amend by striking the title in its entirety and inserting in lieu thereof the following:

 


     AN ACT TO IMPOSE A FEE ON NONSETTLING-MANUFACTURER CIGARETTES; TO REQUIRE MONTHLY REPORTING OF THE NUMBER AND DENOMINATION OF STAMPS AFFIXED TO PACKAGES OF NONSETTLING-MANUFACTURER CIGARETTES, THE NUMBER OF INDIVIDUAL PACKAGES OF NONSETTLING-MANUFACTURER CIGARETTES SOLD OR PURCHASED IN THIS STATE OR OTHERWISE DISTRIBUTED IN THIS STATE FOR SALE IN THE UNITED STATES AND ANY OTHER INFORMATION THE STATE TAX COMMISSION CONSIDERS NECESSARY OR APPROPRIATE TO DETERMINE THE AMOUNT OF THE FEE IMPOSED BY THIS ACT OR TO ENFORCE THIS ACT; TO REQUIRE REGISTRATION OF NONSETTLING MANUFACTURERS WITH THE ATTORNEY GENERAL; TO REQUIRE DEVELOPMENT, MAINTENANCE AND PUBLICATION BY THE ATTORNEY GENERAL OF A LIST OF NONSETTLING MANUFACTURERS THAT HAVE CERTIFIED THEIR COMPLIANCE WITH THIS ACT; TO PROVIDE FOR ENFORCEMENT OF THE REQUIREMENTS IMPOSED BY THIS ACT; TO GRANT CIVIL IMMUNITY TO NONSETTLING MANUFACTURERS THAT COMPLY WITH THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.