SB3084 - Conference Report

SECTION 1. Section 27-69-13, Mississippi Code of 1972, is amended as follows:

[Through June 30, 2007, this section shall read as follows:]

27-69-13. (1) There is hereby imposed, levied and assessed, to be collected and paid as hereinafter provided in this chapter, an excise tax on each person or dealer in cigarettes, cigars, stogies, snuff, chewing tobacco, and smoking tobacco, or substitutes therefor, upon the sale, use, consumption, handling or distribution in the State of Mississippi, as follows:

(a) On cigarettes, the rate of tax shall be Four Cents (4¢) on each cigarette sold with a maximum length of one hundred twenty (120) millimeters; any cigarette in excess of this length shall be taxed as if it were two (2) or more cigarettes. Provided, however, if the federal tax rate on cigarettes in effect June 1, 1985, is reduced, then the rate as provided herein shall be increased by the amount of the federal tax reduction. Such tax increase shall take effect on the first day of the month following the effective date of such reduction in the federal tax rate.

(b) On cigars, cheroots, stogies, snuff, chewing and smoking tobacco and all other tobacco products except cigarettes, the rate of tax shall be fifteen percent (15%) of the manufacturer's list price.

(2) No stamp evidencing the tax * * * levied on cigarettes by this section shall be of a denomination of less than One Cent (1¢), and whenever the tax computed at the rates * * * prescribed on cigarettes in this section is a specified amount, plus a fractional part of One Cent (1¢), the package shall be stamped for the next full cent. * * *

(3) Every wholesaler shall purchase stamps as provided in this chapter, and affix the stamps to all packages of cigarettes handled by him as * * * provided in this chapter.

(4) The * * * tax levied by this section is levied upon the sale, use, gift, possession or consumption of tobacco within the State of Mississippi, and the impact of the tax levied by this section is * * * declared to be on the vendee, user, consumer or possessor of tobacco in this state. * * * When the tax is paid by any other person, the payment shall be considered as an advance payment and shall thereafter be added to the price of the tobacco and recovered from the ultimate consumer or user.

[From and after July 1, 2007, this section shall read as follows:]

(a) On cigarettes, the rate of tax shall be Five Cents (5¢) on each cigarette sold with a maximum length of one hundred twenty (120) millimeters; any cigarette in excess of this length shall be taxed as if it were two (2) or more cigarettes. Provided, however, if the federal tax rate on cigarettes in effect June 1, 1985, is reduced, then the rate as provided herein shall be increased by the amount of the federal tax reduction. Such tax increase shall take effect on the first day of the month following the effective date of such reduction in the federal tax rate.

(b) On cigars, cheroots, stogies, snuff, chewing and smoking tobacco and all other tobacco products except cigarettes, the rate of tax shall be fifteen percent (15%) of the manufacturer's list price.

(3) Every wholesaler shall purchase stamps as provided in this chapter, and affix the stamps to all packages of cigarettes handled by him as * * * provided in this chapter.

SECTION 2. Section 27-65-75, Mississippi Code of 1972, is amended as follows:

27-65-75. On or before the fifteenth day of each month, the revenue collected under the provisions of this chapter during the preceding month shall be paid and distributed as follows:

(1) On or before August 15, 1992, and each succeeding month thereafter through July 15, 1993, eighteen percent (18%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to the municipality and paid to the municipal corporation. On or before August 15, 1993, and each succeeding month thereafter through August 15, 2006, eighteen and one-half percent (18-1/2%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to the municipality and paid to the municipal corporation. On or before September 15, 2006, and each succeeding month thereafter, eighteen and one-half percent (18-1/2%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3), 27-65-21 and 27-65-26, on business activities within a municipal corporation and thirty-seven percent (37%) of the total sales tax revenue collected during the preceding month under the provisions of Section 27-65-26 on business activities within a municipal corporation shall be allocated for distribution to the municipality and paid to the municipal corporation.

A municipal corporation, for the purpose of distributing the tax under this subsection, shall mean and include all incorporated cities, towns and villages.

Monies allocated for distribution and credited to a municipal corporation under this subsection may be pledged as security for a loan if the distribution received by the municipal corporation is otherwise authorized or required by law to be pledged as security for such a loan.

In any county having a county seat that is not an incorporated municipality, the distribution provided under this subsection shall be made as though the county seat was an incorporated municipality; however, the distribution to the municipality shall be paid to the county treasury in which the municipality is located, and those funds shall be used for road, bridge and street construction or maintenance in the county.

(2) On or before September 15, 1987, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month, One Million One Hundred Twenty-five Thousand Dollars ($1,125,000.00) shall be allocated for distribution to municipal corporations as defined under subsection (1) of this section in the proportion that the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each such municipality during the preceding fiscal year bears to the total gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in municipalities statewide during the preceding fiscal year. The State Tax Commission shall require all distributors of gasoline and diesel fuel to report to the commission monthly the total number of gallons of gasoline and diesel fuel sold by them to consumers and retailers in each municipality during the preceding month. The State Tax Commission shall have the authority to promulgate such rules and regulations as is necessary to determine the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each municipality. In determining the percentage allocation of funds under this subsection for the fiscal year beginning July 1, 1987, and ending June 30, 1988, the State Tax Commission may consider gallons of gasoline and diesel fuel sold for a period of less than one (1) fiscal year. For the purposes of this subsection, the term "fiscal year" means the fiscal year beginning July 1 of a year.

(3) On or before September 15, 1987, and on or before the fifteenth day of each succeeding month, until the date specified in Section 65-39-35, the proceeds derived from contractors' taxes levied under Section 27-65-21 on contracts for the construction or reconstruction of highways designated under the highway program created under Section 65-3-97 shall, except as otherwise provided in Section 31-17-127, be deposited into the State Treasury to the credit of the State Highway Fund to be used to fund that highway program. The Mississippi Department of Transportation shall provide to the State Tax Commission such information as is necessary to determine the amount of proceeds to be distributed under this subsection.

(4) On or before August 15, 1994, and on or before the fifteenth day of each succeeding month through July 15, 1999, from the proceeds of gasoline, diesel fuel or kerosene taxes as provided in Section 27-5-101(a)(ii)1, Four Million Dollars ($4,000,000.00) shall be deposited in the State Treasury to the credit of a special fund designated as the "State Aid Road Fund," created by Section 65-9-17. On or before August 15, 1999, and on or before the fifteenth day of each succeeding month, from the total amount of the proceeds of gasoline, diesel fuel or kerosene taxes apportioned by Section 27-5-101(a)(ii)1, Four Million Dollars ($4,000,000.00) or an amount equal to twenty-three and one-fourth percent (23-1/4%) of those funds, whichever is the greater amount, shall be deposited in the State Treasury to the credit of the "State Aid Road Fund," created by Section 65-9-17. Those funds shall be pledged to pay the principal of and interest on state aid road bonds heretofore issued under Sections 19-9-51 through 19-9-77, in lieu of and in substitution for the funds previously allocated to counties under this section. Those funds may not be pledged for the payment of any state aid road bonds issued after April 1, 1981; however, this prohibition against the pledging of any such funds for the payment of bonds shall not apply to any bonds for which intent to issue those bonds has been published, for the first time, as provided by law before March 29, 1981. From the amount of taxes paid into the special fund under this subsection and subsection (9) of this section, there shall be first deducted and paid the amount necessary to pay the expenses of the Office of State Aid Road Construction, as authorized by the Legislature for all other general and special fund agencies. The remainder of the fund shall be allocated monthly to the several counties in accordance with the following formula:

(a) One-third (1/3) shall be allocated to all counties in equal shares;

(b) One-third (1/3) shall be allocated to counties based on the proportion that the total number of rural road miles in a county bears to the total number of rural road miles in all counties of the state; and

(c) One-third (1/3) shall be allocated to counties based on the proportion that the rural population of the county bears to the total rural population in all counties of the state, according to the latest federal decennial census.

For the purposes of this subsection, the term "gasoline, diesel fuel or kerosene taxes" means such taxes as defined in paragraph (f) of Section 27-5-101.

The amount of funds allocated to any county under this subsection for any fiscal year after fiscal year 1994 shall not be less than the amount allocated to the county for fiscal year 1994.

Any reference in the general laws of this state or the Mississippi Code of 1972 to Section 27-5-105 shall mean and be construed to refer and apply to subsection (4) of Section 27-65-75.

(5) One Million Six Hundred Sixty-six Thousand Six Hundred Sixty-six Dollars ($1,666,666.00) each month shall be paid into the special fund known as the "State Public School Building Fund" created and existing under the provisions of Sections 37-47-1 through 37-47-67. Those payments into that fund are to be made on the last day of each succeeding month hereafter.

(6) An amount each month beginning August 15, 1983, through November 15, 1986, as specified in Section 6 of Chapter 542, Laws of 1983, shall be paid into the special fund known as the Correctional Facilities Construction Fund created in Section 6 of Chapter 542, Laws of 1983.

(7) On or before August 15, 1992, and each succeeding month thereafter through July 15, 2000, two and two hundred sixty-six one-thousandths percent (2.266%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2) shall be deposited by the commission into the School Ad Valorem Tax Reduction Fund created under Section 37-61-35. On or before August 15, 2000, and each succeeding month thereafter, two and two hundred sixty-six one-thousandths percent (2.266%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2), shall be deposited into the School Ad Valorem Tax Reduction Fund created under Section 37-61-35 until such time that the total amount deposited into the fund during a fiscal year equals Forty-two Million Dollars ($42,000,000.00). Thereafter, the amounts diverted under this subsection (7) during the fiscal year in excess of Forty-two Million Dollars ($42,000,000.00) shall be deposited into the Education Enhancement Fund created under Section 37-61-33 for appropriation by the Legislature as other education needs and shall not be subject to the percentage appropriation requirements set forth in Section 37-61-33.

(8) On or before August 15, 1992, and each succeeding month thereafter, nine and seventy-three one-thousandths percent (9.073%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2), shall be deposited into the Education Enhancement Fund created under Section 37-61-33.

(9) On or before August 15, 1994, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month, Two Hundred Fifty Thousand Dollars ($250,000.00) shall be paid into the State Aid Road Fund.

(10) On or before August 15, 1994, and each succeeding month thereafter through August 15, 1995, from the revenue collected under this chapter during the preceding month, Two Million Dollars ($2,000,000.00) shall be deposited into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(11) Notwithstanding any other provision of this section to the contrary, on or before February 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(2) and the corresponding levy in Section 27-65-23 on the rental or lease of private carriers of passengers and light carriers of property as defined in Section 27-51-101 shall be deposited, without diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(12) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(1) on retail sales of private carriers of passengers and light carriers of property, as defined in Section 27-51-101 and the corresponding levy in Section 27-65-23 on the rental or lease of these vehicles, shall be deposited, after diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(13) On or before July 15, 1994, and on or before the fifteenth day of each succeeding month thereafter, that portion of the avails of the tax imposed in Section 27-65-22 that is derived from activities held on the Mississippi state fairgrounds complex, shall be paid into a special fund that is created in the State Treasury and shall be expended upon legislative appropriation solely to defray the costs of repairs and renovation at the Trade Mart and Coliseum.

(14) On or before August 15, 1998, and each succeeding month thereafter through July 15, 2005, that portion of the avails of the tax imposed in Section 27-65-23 that is derived from sales by cotton compresses or cotton warehouses and that would otherwise be paid into the General Fund, shall be deposited in an amount not to exceed Two Million Dollars ($2,000,000.00) into the special fund created under Section 69-37-39.

(15) Notwithstanding any other provision of this section to the contrary, on or before September 15, 2000, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-19(1)(f) and (g)(i)2, shall be deposited, without diversion, into the Telecommunications Ad Valorem Tax Reduction Fund established in Section 27-38-7.

(16) On or before August 15, 2000, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of this chapter on the gross proceeds of sales of a project as defined in Section 57-30-1 shall be deposited, after all diversions except the diversion provided for in subsection (1) of this section, into the Sales Tax Incentive Fund created in Section 57-30-3.

(17) Notwithstanding any other provision of this section to the contrary, on or before April 15, 2002, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under Section 27-65-23 on sales of parking services of parking garages and lots at airports shall be deposited, without diversion, into the special fund created under Section 27-5-101(d).

(18) On or before August 15, 2007, and each succeeding month thereafter through July 15, 2008, from the sales tax revenue collected during the preceding month under the provisions of this chapter, Two Million Five Hundred Thousand Dollars ($2,500,000.00) shall be deposited into the Special Funds Transfer Fund created in Section 4 of Chapter 556, Laws of 2003.

(19) (a) On or before August 15, 2005, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of this chapter on the gross proceeds of sales of a business enterprise located within a redevelopment project area under the provisions of Sections 57-91-1 through 57-91-11, and the revenue collected on the gross proceeds of sales from sales made to a business enterprise located in a redevelopment project area under the provisions of Sections 57-91-1 through 57-91-11 (provided that such sales made to a business enterprise are made on the premises of the business enterprise), shall, except as otherwise provided in this subsection (19), be deposited, after all diversions, into the Redevelopment Project Incentive Fund as created in Section 57-91-9.

(b) For a municipality participating in the Economic Redevelopment Act created in Sections 57-91-1 through 57-91-11, the diversion provided for in subsection (1) of this section attributable to the gross proceeds of sales of a business enterprise located within a redevelopment project area under the provisions of Sections 57-91-1 through 57-91-11, and attributable to the gross proceeds of sales from sales made to a business enterprise located in a redevelopment project area under the provisions of Sections 57-91-1 through 57-91-11 (provided that such sales made to a business enterprise are made on the premises of the business enterprise), shall be deposited into the Redevelopment Project Incentive Fund as created in Section 57-91-9, as follows:

(i) For the first six (6) years in which payments are made to a developer from the Redevelopment Project Incentive Fund, one hundred percent (100%) of the diversion shall be deposited into the fund;

(ii) For the seventh year in which such payments are made to a developer from the Redevelopment Project Incentive Fund, eighty percent (80%) of the diversion shall be deposited into the fund;

(iii) For the eighth year in which such payments are made to a developer from the Redevelopment Project Incentive Fund, seventy percent (70%) of the diversion shall be deposited into the fund;

(iv) For the ninth year in which such payments are made to a developer from the Redevelopment Project Incentive Fund, sixty percent (60%) of the diversion shall be deposited into the fund; and

(v) For the tenth year in which such payments are made to a developer from the Redevelopment Project Incentive Fund, fifty percent (50%) of the funds shall be deposited into the fund.

(20) On or before September 15, 2006, and each succeeding month thereafter, the following amount of sales tax revenue collected during the preceding month under the provisions of this chapter shall be deposited, after all diversions, into the following funds:

(a) One Million Three Hundred Five Thousand Dollars ($1,305,000.00) into the Education Enhancement Fund created under Section 37-61-33.

(b) Three Hundred Twenty-six Thousand Dollars ($326,000.00) into the School Ad Valorem Tax Reduction Fund created under Section 37-61-35.

(21) The remainder of the amounts collected under the provisions of this chapter shall be paid into the State Treasury to the credit of the General Fund.

(22) It shall be the duty of the municipal officials of any municipality that expands its limits, or of any community that incorporates as a municipality, to notify the commissioner of that action thirty (30) days before the effective date. Failure to so notify the commissioner shall cause the municipality to forfeit the revenue that it would have been entitled to receive during this period of time when the commissioner had no knowledge of the action. If any funds have been erroneously disbursed to any municipality or any overpayment of tax is recovered by the taxpayer, the commissioner may make correction and adjust the error or overpayment with the municipality by withholding the necessary funds from any later payment to be made to the municipality.

SECTION 3. Section 27-69-31, Mississippi Code of 1972, is amended as follows:

27-69-31. Dealers subject to the provisions of this chapter shall be allowed, as compensation for their services in affixing the stamps * * * required by this chapter, a sum equal to eight percent (8%) of the face value of the stamps purchased by them; however, the additional face value of stamps purchased to comply with taxes imposed by Section 27-69-31 after June 1, 1985, and prior to July 1, 2006, shall be subject to a four percent (4%) discount or compensation to dealers for their services rather than the eight percent (8%) discount or compensation allowed by this section, and the additional face value of stamps purchased to comply with taxes imposed by Section 27-69-31 on or after July 1, 2006, shall be subject to a one percent (1%) discount rather than the eight percent (8%) discount or compensation allowed by this section. The commission shall allow no discount on the purchase of stamps by wholesalers of an aggregate amount of less than One Hundred Dollars ($100.00), and by retailers of an aggregate amount of less than Fifty Dollars ($50.00) in any one order.

* * * The commissioner may, in his discretion, either reduce the compensation allowed, or disallow any compensation for the affixing of stamps, for failure of the dealer to comply with any provisions of the law or rules and regulations promulgated by the commissioner.

SECTION 4. The following provision shall be codified as Section 27-65-26, Mississippi Code of 1972:

27-65-26. From and after July 1, 2006, retail sales of food for human consumption not purchased with food stamps issued by the United States Department of Agriculture, or other federal agency, but which would be exempt under paragraph (o) of Section 27-65-111 from the taxes imposed by this chapter if the food items were purchased with food stamps, shall be taxed at the rate of three and one-half percent (3-1/2%).

SECTION 5. Section 27-65-17, Mississippi Code of 1972, is amended as follows:

27-65-17. (1) (a) Except as otherwise provided in this section, upon every person engaging or continuing within this state in the business of selling any tangible personal property whatsoever there is hereby levied, assessed and shall be collected a tax equal to seven percent (7%) of the gross proceeds of the retail sales of the business.

(b) Retail sales of farm tractors shall be taxed at the rate of one percent (1%) when made to farmers for agricultural purposes.

(c) Retail sales of farm implements sold to farmers and used directly in the production of poultry, ratite, domesticated fish as defined in Section 69-7-501, livestock, livestock products, agricultural crops or ornamental plant crops or used for other agricultural purposes shall be taxed at the rate of three percent (3%) when used on the farm. The three percent (3%) rate shall alsoapply to all equipment used in logging, pulpwood operations or tree farming which is either:

(i) Self-propelled, or

(ii) Mounted so that it is permanently attached to other equipment which is self-propelled or permanently attached to other equipment drawn by a vehicle which is self-propelled.

(d) Except as otherwise provided in subsection (3) of this section, retail sales of aircraft, automobiles, trucks, truck-tractors, semitrailers and mobile homes shall be taxed at the rate of three percent (3%).

(e) Sales of manufacturing machinery or manufacturing machine parts when made to a manufacturer or custom processor for plant use only when the machinery and machine parts will be used exclusively and directly within this state in manufacturing a commodity for sale, rental or in processing for a fee shall be taxed at the rate of one and one-half percent (1-1/2%).

(f) Sales of machinery and machine parts when made to a technology intensive enterprise for plant use only when the machinery and machine parts will be used exclusively and directly within this state for industrial purposes, including, but not limited to, manufacturing or research and development activities, shall be taxed at the rate of one and one-half percent (1-1/2%). In order to be considered a technology intensive enterprise for purposes of this paragraph:

(i) The enterprise shall meet minimum criteria established by the Mississippi Development Authority;

(ii) The enterprise shall employ at least ten (10) persons in full-time jobs;

(iii) At least ten percent (10%) of the workforce in the facility operated by the enterprise shall be scientists, engineers or computer specialists;

(iv) The enterprise shall manufacture plastics, chemicals, automobiles, aircraft, computers or electronics; or shall be a research and development facility, a computer design or related facility, or a software publishing facility or other technology intensive facility or enterprise as determined by the Mississippi Development Authority;

(v) The average wage of all workers employed by the enterprise at the facility shall be at least one hundred fifty percent (150%) of the state average annual wage; and

(vi) The enterprise must provide a basic health care plan to all employees at the facility.

(g) Sales of materials for use in track and track structures to a railroad whose rates are fixed by the Interstate Commerce Commission or the Mississippi Public Service Commission shall be taxed at the rate of three percent (3%).

(h) Sales of tangible personal property to electric power associations for use in the ordinary and necessary operation of their generating or distribution systems shall be taxed at the rate of one percent (1%).

(i) Wholesale sales of beer shall be taxed at the rate of seven percent (7%), and the retailer shall file a return and compute the retail tax on retail sales but may take credit for the amount of the tax paid to the wholesaler on said return covering the subsequent sales of same property, provided adequate invoices and records are maintained to substantiate the credit.

(j) Wholesale sales of food and drink for human consumption to full service vending machine operators to be sold through vending machines located apart from and not connected with other taxable businesses shall be taxed at the rate of eight percent (8%).

(k) Sales of equipment used or designed for the purpose of assisting disabled persons, such as wheelchair equipment and lifts, that is mounted or attached to or installed on a private carrier of passengers or light carrier of property, as defined in Section 27-51-101, at the time when the private carrier of passengers or light carrier of property is sold shall be taxed at the same rate as the sale of such vehicles under this section.

(1) From and after July 1, 2006, retail sales of food for human consumption not purchased with food stamps issued by the United States Department of Agriculture, or other federal agency, but which would be exempt under paragraph (o) of Section 27-65-111 from the taxes imposed by this chapter if the food items were purchased with food stamps, shall be taxed as provided for in Section 27-65-26.

(2) From and after January 1, 1995, retail sales of private carriers of passengers and light carriers of property, as defined in Section 27-51-101, shall be taxed an additional two percent (2%).

(3) In lieu of the tax levied in subsection (1) of this section, there is levied on retail sales of truck-tractors and semitrailers used in interstate commerce and registered under the International Registration Plan (IRP) or any similar reciprocity agreement or compact relating to the proportional registration of commercial vehicles entered into as provided for in Section 27-19-143, a tax at the rate of three percent (3%) of the portion of the sale that is attributable to the usage of such truck-tractor or semitrailer in Mississippi. The portion of the retail sale that is attributable to the usage of such truck-tractor or semitrailer in Mississippi is the retail sales price of the truck-tractor or semitrailer multiplied by the percentage of the total miles traveled by the vehicle that are traveled in Mississippi. The tax levied pursuant to this subsection (3) shall be collected by the State Tax Commission from the purchaser of such truck-tractor or semitrailer at the time of registration of such truck-tractor or semitrailer.

(4) A manufacturer selling at retail in this state shall be required to make returns of the gross proceeds of such sales and pay the tax imposed in this section.

(5) Any person exercising any privilege taxable under Section 27-65-15 and selling his natural resource products at wholesale or to exempt persons shall pay the tax levied by said section in lieu of the tax levied by this section.

SECTION 6. The purpose of Sections 6 through 18 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 Sections 6 through 18 of this act and any legislation relating to nonsettling manufacturers; and

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

SECTION 7. As used in Sections 6 through 18 of 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 Sections 6 through 18 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 8. (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

(2) The fee imposed by Sections 6 through 18 of 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 Sections 6 through 18 of 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 Sections 6 through 18 of this act, the fee imposed by Sections 6 through 18 of 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 9. (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 10. (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 Sections 6 through 18 of this act or to enforce Sections 6 through 18 of 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 11. (1) Each month, not later than the 10th day after the date the commissioner receives the information required by Section 10 of this act, the commissioner shall:

(a) Compute the amount of the fee imposed by Sections 6 through 18 of 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 12. (1) Not later than the first day of each month, a nonsettling manufacturer who is required to pay the fee imposed by Sections 6 through 18 of this act shall certify to the Attorney General that the manufacturer is in compliance with Sections 6 through 18 of this act and has paid in full the fee imposed by Sections 6 through 18 of 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 13. (1) If cigarettes or cigarette tobacco products of a nonsettling manufacturer are not offered for sale or distribution in this state on September 1, 2006, 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 Sections 6 through 18 of 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 9 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 Sections 6 through 18 of 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 14. (1) In addition to prepaying the fee required by Section 13 of this act, a nonsettling manufacturer described by Section 13(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 Sections 6 through 18 of 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 15. (1) Cigarettes and cigarette tobacco products of a nonsettling manufacturer that has not complied with Sections 6 through 18 of this act, including full payment of the fee imposed by Sections 6 through 18 of 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 Sections 6 through 18 of this act if the manufacturer:

(a) Does not pay in full the fee imposed by Sections 6 through 18 of this act; or

(b) Is not included on the list described by Section 12(2) of this act.

(3) If a nonsettling manufacturer does not appear in the Attorney General's directory required by Section 12(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

SECTION 16. Any nonsettling manufacturer that complies with the provisions of Sections 6 through 18 of this act shall be entitled to the same protections from civil liability as set forth in the tobacco settlement agreement for settling manufacturers only if the nonsettling manufacturer also strictly follows the mandates and restrictions in the tobacco settlement agreement.

SECTION 17. Sections 6 through 18 of 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 18. (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 Sections 6 through 18 of 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 19. This act shall take effect and be in force from and after July 1, 2006.


X (SIGNED)	X (SIGNED)
Thomas E. Robertson	Percy W. Watson

X (SIGNED)	X (SIGNED)
Gray Tollison	John R. Reeves

X (SIGNED)	X (SIGNED)
Tom King	Jamie Franks