2006 Regular Session

To: Ways and Means

By: Representative Bentz

House Bill 1497



     SECTION 1.  Purpose.  The purpose of this act is to levy an excise tax to generate revenue for state and local law enforcement agencies for use by those agencies to investigate, combat, prevent and reduce drug crimes, and for the general funds of the state and local governmental authorities.  Nothing in this act shall provide in any manner immunity from criminal prosecution for a person who possesses an illegal substance.

     SECTION 2.  Definitions.  The following words and phrases shall have the following meanings, unless the context otherwise requires:

          (a)  "Commissioner" means the Commissioner of the Mississippi State Tax Commission.

          (b)  "Local law enforcement agency" means any municipal police department, sheriff's office or regional drug task force.

          (c)  "State law enforcement agency" means the Department of Public Safety, Department of Transportation enforcement officers, Department of Wildlife, Fisheries and Parks, Attorney General special investigators and Public Integrity Division special investigators, Alcohol Beverage Control enforcement officers, Department of Corrections officers and Department of Marine Resources enforcement officers.

          (d)  "Dealer" means any person who actually or constructively possesses more than thirty (30) grams of marijuana, two (2) or more grams of any other unauthorized substance that is sold by weight, or ten (10) or more dosage units of any other unauthorized substance that is not sold by weight.

          (e)  "Unauthorized substance" means a controlled substance as used in Chapter 29, Title 41, Article 3 (Uniform Controlled Substances Law).

          (f)  "Controlled substance" as defined in Section 41-29-105(f);

          (g)  "Counterfeit substance" as defined in Section 41-29-105(g);

          (h)  "Hashish" as defined in Section 41-29-105(o);

          (i)  "Marijuana" as defined in Section 41-29-105(r);

          (j)  "Narcotic drug" as defined in Section 41-29-105(s)(1), (2), (3), (4);

          (k)  "Opiate" as defined in Section 41-29-105(t);

          (l)  "Opium poppy" as defined in Section 41-29-105(u);

          (m)  "Poppy straw" as defined in Section 41-29-105(x);

          (n)  "Person" as defined in Section 41-29-105(w).

     SECTION 3.  Unauthorized substance tax rates.  An excise tax is levied on unauthorized substances possessed, either actually or constructively, by dealers at the following rates:

          (a)  On each gram of marijuana, or fraction of a gram, Seven Dollars ($7.00);

          (b)  On each gram of controlled substance, or fraction of a gram, Two Hundred Dollars ($200.00);

          (c)  On each fifty (50) dosage units of a controlled substance that is not sold by weight, or fraction of fifty (50) dosage units, Two Hundred Dollars ($200.00).

     SECTION 4.  Exemptions.  (1)  The tax levied in this act does not apply to any material, compound, mixture, or preparation that contains any quantity of a controlled substance that is listed as an exempt substance in 21 C.F.R., Section 1308.22.

     (2)  The tax levied in this act does not apply to any governmental entity involved in research.

     SECTION 5.  Issuance of stamps to indicate payment of tax; report of seizure of unauthorized substances.  (1)  The commissioner shall issue stamps to affix to unauthorized substances to indicate payment of the tax required by this act.  Dealers shall report the taxes payable under this act at the time and on the form prescribed by the commissioner.  Dealers are not required to give their name, address, social security number, or other identifying information on the form.  Upon payment of the tax, the commissioner shall issue stamps in an amount equal to the amount of the tax paid.  Taxes may be paid and stamps may be issued either by mail or in person.

     (2)  Every local law enforcement agency and every state law enforcement agency must report to the State Tax Commission within forty-eight (48) hours after seizing an unauthorized substance, or making an arrest of an individual in possession of an unauthorized substance, listed in paragraph (b) of this subsection upon which a stamp has not been affixed unless the seizure is a part of an ongoing undercover operation.  The report must be in the manner prescribed by the commissioner and must include the time and place of the arrest or seizure, the amount, location and kind of substance, the identification of any individual in possession of the substance and such individual's social security number, and any other information prescribed by the commissioner.  The report must be made when the arrest or seizure involves any of the following unauthorized substances upon which a stamp has not been affixed as required by this part:

          (a)  More than total weight of thirty (30) grams of marijuana;

          (b)  Two (2) or more grams of any other unauthorized substance that is sold by weight; or

          (c)  Ten (10) or more dosage units of any other unauthorized substance that is not sold by weight.

     SECTION 6.  Payment of tax.  The tax imposed by this act is payable by any dealer who actually or constructively possesses an unauthorized substance in this state upon which the tax has not been paid as evidenced by a stamp issued by the commissioner.  The tax is payable within twenty-four (24) hours after the dealer acquires actual or constructive possession of a nontax-paid unauthorized substance, exclusive of Saturdays, Sundays, and legal holidays of this state, in which case the tax is payable on the next working day.  If the tax is not paid within twenty-four (24) hours, the tax will become delinquent and shall accrue penalty and interest pursuant to the provisions and regulations of the Tax Commission.  Upon payment of the tax, the dealer shall permanently affix the appropriate stamps to the unauthorized substance.  Once the tax due on an unauthorized substance has been paid, no additional tax is due under this act.  If a dealer is found in possession of a substance taxable under this act that does not have the appropriate tax stamp affixed, it shall be presumed the dealer has been in possession of such substance for longer than twenty-four (24) hours, exclusive of Saturdays, Sundays, and legal holidays of this state.

     SECTION 7.  Assessment of tax, penalties and interests and notice of collection.  Notwithstanding any other provision of law, an assessment against a dealer who possesses an unauthorized substance to which a stamp has not been affixed as required by this act shall be made as provided in this section.  The commissioner shall immediately assess tax, applicable penalty, and interest based on any information brought to the attention of the commissioner, or the commissioner's duly authorized assistants, that a person is liable for unpaid tax pursuant to this act.  The tax shall be assessed in the same manner as any other tax assessment, except when the provisions of this act specify otherwise.  The commissioner shall notify the dealer in writing of the amount of the tax, penalty, and interest due, and demand its immediate payment.  The notice of assessment and demand for payment shall be either mailed to the dealer at the dealer's last known address or served on the dealer in person.  If the dealer does not pay the tax, penalty, and interest immediately upon receipt of the notice and demand, the commissioner shall collect the assessment, including penalty and interest, pursuant to the procedure set forth in Sections 27-3-69 and 27-3-81, unless the dealer files with the commissioner sufficient security in the amount of the assessment, including penalty and interest.  Unless security is provided, the assessment shall be deemed a delinquent assessment, and the commissioner shall use all means available to collect the assessment from any property in which the dealer has a legal, equitable or beneficial interest.  The dealer may seek review of the assessment as provided in Section 27-3-29 except to the extent those provisions are modified by this act.  The commissioner is further authorized under this act to pursue criminal tax evasion proceedings against a dealer under Sections 27-3-79 and 27-3-80.

     SECTION 8.  Confidentiality, immunity and statistics.  Notwithstanding any other provision of law, information obtained pursuant to this part is confidential and, unless independently obtained, may not be used in a criminal prosecution other than a prosecution for violation of this act.  Stamps issued pursuant to this act may not be used in a criminal prosecution other than a prosecution for a violation of this part.  The provisions of this act including the criminal penalties specified therein, shall apply to the tax levied under this act.  This section does not prohibit the commissioner from publishing statistics that do not disclose the identity of dealers or the contents of particular returns or reports.

     SECTION 9.  Unauthorized Substances Tax Fund; remittance of tax once unencumbered; application of proceeds of tax.  (1)  There is created in the State Treasury a special fund to be known as the Unauthorized Substances Tax Fund.  The purpose of the fund shall be to provide funding for the purposes set forth in Section 1 of this act.  The fund shall be a continuing fund, not subject to fiscal-year limitations, and shall consist of:

          (a)  Monies deposited pursuant to this act; and

          (b)  The interest accruing to the fund;

     When the tax proceeds become unencumbered the commissioner shall remit the unencumbered tax proceeds as provided in this section on a quarterly or more frequent basis.

     (2)  (a)  Tax proceeds are unencumbered when:

              (i)  The tax has been paid and the collection process completed; and

              (ii)  1.  The taxpayer has no current right to file a refund claim, and the paid tax is not the subject of any pending lawsuit for the recovery of that tax; or

                   2.  The time for the taxpayer to file suit pursuant to rules and regulations of the Tax Commission has expired.

          (b)  Legally purchased tax stamps shall be deposited into the State General Fund.

          (c)  The commissioner shall first apply the unencumbered tax proceeds to the costs of storing and disposing of the assets seized in payment of the assessment under this part, which costs shall be added to and become part of the assessment.  From the remaining proceeds, the commissioner shall remit fifty percent (50%) of the unencumbered tax proceeds that were collected by assessment to the local or state law enforcement agency that conducted the investigation of a dealer that led to the assessment.  Twenty-five percent (25%) of any such amount remitted to a local law enforcement agency shall be deposited to the general fund of the county or municipality of the local law enforcement jurisdiction.  Proceeds retained by a law enforcement agency are to be used by the agency solely for the purpose of investigating, combating, preventing and reducing drug crimes.  If more than one (1) local or state law enforcement agency conducted the investigation, the commissioner shall determine the equitable share for each agency based on the contribution each agency made to the investigation.  The commissioner's determination of the equitable share for each agency shall be final, and shall not be subject to review in an administrative or judicial proceeding.  Ten percent (10%) shall be remitted to the Department of Public Safety for the purposes of creating, operating and maintaining a Statewide Automated Victim Information and Notification (SAVIN) system.  The commissioner shall credit the remaining forty percent (40%) of the unencumbered tax proceeds to the State General Fund.

     SECTION 10.  Construction.  The provisions of this act shall not be construed to confer any immunity from criminal prosecution or conviction for a violation or possession of an unauthorized substance as defined in Section 41-29-139 upon any person who voluntarily pays the tax imposed by this act or who otherwise complies with the provisions of this act.

     SECTION 11.  Rules and regulations.  The commissioner shall have the authority to promulgate and adopt rules and regulations and policy in accordance with the Mississippi Administrative Procedures Law to implement, administer and enforce the provisions of this act.

     SECTION 12.  This act shall take effect and be in force from and after July 1, 2006.