Download Zipped Introduced WP 8.0 HB0267.ZIP 34,473 Bytes
[Status][Bill Documents][Fiscal Note][Bills Directory]
H.B. 267
1
TOBACCO MANUFACTURERS
2
RESPONSIBILITY ACT AMENDMENTS
3
2000 GENERAL SESSION
4
STATE OF UTAH
5
Sponsor: Karen W. Morgan
6
AN ACT RELATING TO THE UTAH HEALTH CODE AND REVENUE AND TAXATION;
7
TRANSFERRING THE TOBACCO MANUFACTURERS RESPONSIBILITY ACT FROM THE
8
HEALTH CODE TO THE REVENUE AND TAXATION CODE; REQUIRING TOBACCO
9
MANUFACTURERS WHO PLACE FUNDS INTO ESCROW TO CERTIFY COMPLIANCE
10
WITH THE STATE TAX COMMISSION RATHER THAN THE EXECUTIVE DIRECTOR OF
11
THE DEPARTMENT OF HEALTH; AND MAKING CONFORMING AMENDMENTS.
12
This act affects sections of Utah Code Annotated 1953 as follows:
13
AMENDS:
14
26-1-30, as last amended by Chapter 364, Laws of Utah 1999
15
59-1-403, as last amended by Chapter 364, Laws of Utah 1999
16
59-14-401, as last amended by Chapter 364, Laws of Utah 1999
17
59-14-407, as enacted by Chapter 364, Laws of Utah 1999
18
63-2-206, as last amended by Chapter 364, Laws of Utah 1999
19
ENACTS:
20
59-14-801, Utah Code Annotated 1953
21
RENUMBERS AND AMENDS:
22
59-14-600, (Renumbered from 26-44-101, as enacted by Chapter 344, Laws of Utah 1999)
23
59-14-601, (Renumbered from 26-44-201, as enacted by Chapter 344, Laws of Utah 1999)
24
59-14-602, (Renumbered from 26-44-202, as enacted by Chapter 344, Laws of Utah 1999)
25
59-14-603, (Renumbered from 26-44-203, as enacted by Chapter 344, Laws of Utah 1999)
26
59-14-701, (Renumbered from 26-44-301, as enacted by Chapter 364, Laws of Utah 1999)
27
59-14-702, (Renumbered from 26-44-302, as enacted by Chapter 364, Laws of Utah 1999)
28
59-14-703, (Renumbered from 26-44-303, as enacted by Chapter 364, Laws of Utah 1999)
29
59-14-704, (Renumbered from 26-44-304, as enacted by Chapter 364, Laws of Utah 1999)
30
59-14-705, (Renumbered from 26-44-305, as enacted by Chapter 364, Laws of Utah 1999)
31
59-14-706, (Renumbered from 26-44-306, as enacted by Chapter 364, Laws of Utah 1999)
32
59-14-707, (Renumbered from 26-44-307, as enacted by Chapter 364, Laws of Utah 1999)
33
59-14-708, (Renumbered from 26-44-308, as enacted by Chapter 364, Laws of Utah 1999)
34
Be it enacted by the Legislature of the state of Utah:
35
Section 1.
Section
26-1-30
is amended to read:
36
26-1-30. Powers and duties of department.
37
(1) The department shall:
38
(a) enter into cooperative agreements with the Department of Environmental Quality to
39
delineate specific responsibilities to assure that assessment and management of risk to human
40
health from the environment are properly administered; and
41
(b) consult with the Department of Environmental Quality and enter into cooperative
42
agreements, as needed, to ensure efficient use of resources and effective response to potential
43
health and safety threats from the environment, and to prevent gaps in protection from potential
44
risks from the environment to specific individuals or population groups.
45
(2) In addition to all other powers and duties of the department, it shall have and exercise
46
the following powers and duties:
47
(a) promote and protect the health and wellness of the people within the state;
48
(b) establish, maintain, and enforce rules necessary or desirable to carry out the provisions
49
and purposes of this title to promote and protect the public health or to prevent disease and illness;
50
(c) investigate and control the causes of epidemic, infectious, communicable, and other
51
diseases affecting the public health;
52
(d) provide for the detection, reporting, prevention, and control of communicable,
53
infectious, acute, chronic, or any other disease or health hazard that the department considers to
54
be dangerous, important, or likely to affect the public health;
55
(e) collect and report information on causes of injury, sickness, death, and disability and
56
the risk factors that contribute to the causes of injury, sickness, death, and disability within the
57
state;
58
(f) collect, prepare, publish, and disseminate information to inform the public concerning
59
the health and wellness of the population, specific hazards, and risks that may affect the health and
60
wellness of the population and specific activities which may promote and protect the health and
61
wellness of the population;
62
(g) establish and operate programs necessary or desirable for the promotion or protection
63
of the public health and the control of disease or which may be necessary to ameliorate the major
64
causes of injury, sickness, death, and disability in the state, except that the programs shall not be
65
established if adequate programs exist in the private sector;
66
(h) establish, maintain, and enforce isolation and quarantine, and for this purpose only,
67
exercise physical control over property and individuals as the department finds necessary for the
68
protection of the public health;
69
(i) close theaters, schools, and other public places and forbid gatherings of people when
70
necessary to protect the public health;
71
(j) abate nuisances when necessary to eliminate sources of filth and infectious and
72
communicable diseases affecting the public health;
73
(k) make necessary sanitary and health investigations and inspections in cooperation with
74
local health departments as to any matters affecting the public health;
75
(l) establish laboratory services necessary to support public health programs and medical
76
services in the state;
77
(m) establish and enforce standards for laboratory services which are provided by any
78
laboratory in the state when the purpose of the services is to protect the public health;
79
(n) cooperate with the Labor Commission to conduct studies of occupational health
80
hazards and occupational diseases arising in and out of employment in industry, and make
81
recommendations for elimination or reduction of the hazards;
82
(o) cooperate with the local health departments, the Department of Corrections, the
83
Administrative Office of the Courts, the Division of Youth Corrections, and the Crime Victims
84
Reparations Board to conduct testing for HIV infection of convicted sexual offenders and any
85
victims of a sexual offense;
86
(p) investigate the cause of maternal and infant mortality;
87
(q) establish, maintain, and enforce a procedure requiring the blood of adult pedestrians
88
and drivers of motor vehicles killed in highway accidents be examined for the presence and
89
concentration of alcohol;
90
(r) provide the commissioner of public safety with monthly statistics reflecting the results
91
of the examinations provided for in Subsection (2)(q) and provide safeguards so that information
92
derived from the examinations is not used for a purpose other than the compilation of statistics
93
authorized in this subsection;
94
(s) establish qualifications for individuals permitted to draw blood pursuant to Section
95
41-6-44.10
, and to issue permits to individuals it finds qualified, which permits may be terminated
96
or revoked by the department;
97
(t) establish a uniform public health program throughout the state which includes
98
continuous service, employment of qualified employees, and a basic program of disease control,
99
vital and health statistics, sanitation, public health nursing, and other preventive health programs
100
necessary or desirable for the protection of public health;
101
(u) adopt rules and enforce minimum sanitary standards for the operation and maintenance
102
of:
103
(i) orphanages;
104
(ii) boarding homes;
105
(iii) summer camps for children;
106
(iv) lodging houses;
107
(v) hotels;
108
(vi) restaurants and all other places where food is handled for commercial purposes, sold,
109
or served to the public;
110
(vii) tourist and trailer camps;
111
(viii) service stations;
112
(ix) public conveyances and stations;
113
(x) public and private schools;
114
(xi) factories;
115
(xii) private sanatoria;
116
(xiii) barber shops;
117
(xiv) beauty shops;
118
(xv) physicians' offices;
119
(xvi) dentists' offices;
120
(xvii) workshops;
121
(xviii) industrial, labor, or construction camps;
122
(xix) recreational resorts and camps;
123
(xx) swimming pools, public baths, and bathing beaches;
124
(xxi) state, county, or municipal institutions, including hospitals and other buildings,
125
centers, and places used for public gatherings; and
126
(xxii) of any other facilities in public buildings and on public grounds;
127
(v) conduct health planning for the state;
128
(w) monitor the costs of health care in the state and foster price competition in the health
129
care delivery system;
130
(x) adopt rules for the licensure of health facilities within the state pursuant to Title 26,
131
Chapter 21, Health Care Facility Licensing and Inspection Act;
132
(y) serve as the collecting agent, on behalf of the state, for the nursing facility assessment
133
fee imposed under Title 26, Chapter 35, Nursing Facility Assessment Act, and the provider
134
assessment imposed under Chapter 40, Utah Children's Health Insurance Act, and adopt rules for
135
the enforcement and administration of the assessments consistent with Chapters 35 and 40;
136
(z) monitor and report to the Health Policy Commission created in Title 63C, Chapter 3,
137
Health Policy Commission, on the development of managed health care plans in rural areas of the
138
state, including the effect of the managed health care plans on costs, access, and availability of
139
providers located in the rural communities of the state; and
140
(aa) license the provision of child care[;].
141
[(bb) provide a copy of the Master Settlement Agreement for review or purchase to any
142
person upon request and may charge a fee, established in accordance with Section
26-1-6
, to any
143
person who desires to purchase a copy of the Master Settlement Agreement; and]
144
[(cc) upon request from a tobacco product manufacturer, as defined in Section
26-44-202
,
145
report to the manufacturer the quantities of the manufacturer's cigarettes reported to the department
146
under Section
59-1-403
.]
147
Section 2.
Section
59-1-403
is amended to read:
148
59-1-403. Confidentiality -- Penalty -- Application to property tax.
149
(1) Any tax commissioner, agent, clerk, or other officer or employee of the commission
150
or any representative, agent, clerk, or other officer or employee of any county, city, or town may
151
not divulge or make known in any manner any information gained by him from any return filed
152
with the commission. The officials charged with the custody of such returns are not required to
153
produce any of them or evidence of anything contained in them in any action or proceeding in any
154
court, except:
155
(a) in accordance with judicial order;
156
(b) on behalf of the commission in any action or proceeding under this title or other law
157
under which persons are required to file returns with the commission;
158
(c) on behalf of the commission in any action or proceeding to which the commission is
159
a party; or
160
(d) on behalf of any party to any action or proceeding under this title when the report or
161
facts shown thereby are directly involved in such action or proceeding. In any event, the court may
162
require the production of, and may admit in evidence, any portion of reports or of the facts shown
163
by them, as are specifically pertinent to the action or proceeding.
164
(2) This section does not prohibit:
165
(a) a person or his duly authorized representative from receiving a copy of any return or
166
report filed in connection with that person's own tax;
167
(b) the publication of statistics as long as they are classified to prevent the identification
168
of particular reports or returns; and
169
(c) the inspection by the attorney general or other legal representative of the state of the
170
report or return of any taxpayer:
171
(i) who brings action to set aside or review the tax based on such report or return;
172
(ii) against whom an action or proceeding is contemplated or has been instituted under this
173
title; or
174
(iii) against whom the state has an unsatisfied money judgment.
175
(3) (a) Notwithstanding Subsection (1) and for purposes of administration, the commission
176
may, by rule, provide for a reciprocal exchange of information with the United States Internal
177
Revenue Service or the revenue service of any other state.
178
(b) Notwithstanding Subsection (1) and for all taxes except individual income tax and
179
corporate franchise tax, the commission may, by rule, share information gathered from returns and
180
other written statements with the federal government, any other state, any of their political
181
subdivisions, or any political subdivision of this state, except as limited by Sections
59-12-209
and
182
59-12-210
, if these political subdivisions or the federal government grant substantially similar
183
privileges to this state.
184
(c) Notwithstanding Subsection (1) and for all taxes except individual income tax and
185
corporate franchise tax, the commission may, by rule, provide for the issuance of information
186
concerning the identity and other information of taxpayers who have failed to file tax returns or
187
to pay any tax due.
188
(d) Notwithstanding Subsection (1), the commission shall provide to the Solid and
189
Hazardous Waste Control Board executive secretary, as defined in Section
19-6-102
, any records,
190
returns, and other information filed with the commission under Title 59, Chapter 13, Motor and
191
Special Fuel Tax Act, or Section
19-6-410.5
regarding the environmental assurance program
192
participation fee, as requested by the executive secretary.
193
(e) [(i)] Notwithstanding Subsection (1), [to provide information necessary for the
194
implementation of Title 26, Chapter 44, Tobacco Manufacturers Responsibility Act, the
195
commission shall annually report to the executive director of the Department of Health on or
196
before March 1] upon request from a tobacco product manufacturer, as defined in Section
197
59-14-602
, the commission shall report to the manufacturer:
198
[(A)] (i) the quantity of cigarettes, as defined in Section [
26-44-202
]
59-14-602
, produced
199
by [each] the manufacturer and reported to the commission for the previous calendar year under
200
Section
59-14-407
; and
201
[(B)] (ii) the quantity of cigarettes, as defined in Section [
26-44-202
]
59-14-602
, produced
202
by [each] the manufacturer for which a tax refund was granted during the previous calendar year
203
under Section
59-14-401
and reported to the commission under Subsection
59-14-401
(1)(a)(v).
204
[(ii) The records received by the executive director of the Department of Health under
205
Subsection (3)(e)(i) are protected records under Title 63, Chapter 2, Government Records Access
206
and Management Act.]
207
(4) Reports and returns shall be preserved for at least three years and then the commission
208
may destroy them.
209
(5) Any person who violates this section is guilty of a class A misdemeanor. If the
210
offender is an officer or employee of the state, he shall be dismissed from office and be
211
disqualified from holding public office in this state for a period of five years thereafter.
212
(6) This part does not apply to the property tax.
213
Section 3.
Section
59-14-401
is amended to read:
214
59-14-401. Refund of taxes paid -- Exemption for exported cigarettes and tobacco
215
products.
216
(1) (a) When any cigarette or tobacco product taxed under this chapter is sold and shipped
217
to a regular dealer in those articles in another state, the seller in this state shall be entitled to a
218
refund of the actual amount of the taxes paid, upon condition that the seller in this state:
219
(i) is a licensed dealer;
220
(ii) signs an affidavit that the cigarette or tobacco product was so sold and shipped;
221
(iii) furnishes from the purchaser a written acknowledgment that the purchaser has
222
received:
223
(A) the cigarette or tobacco product; and
224
(B) the amount of any stamps for which a refund is requested;
225
(iv) reports the name and address of the purchaser; and
226
(v) reports the name of the manufacturer of the cigarette, as defined under Section
227
[
26-44-202
]
59-14-602
, reported under Section
59-14-407
if the cigarette is manufactured by a
228
manufacturer required to place funds into escrow under Section [
26-44-203
]
59-14-603
.
229
(b) The taxes shall be refunded in the manner provided in Subsection
59-14-206
(2) for
230
unused stamps.
231
(2) Wholesalers or distributors in this state who export taxable cigarettes and tobacco
232
products to a regular dealer in another state shall be exempt from the payment of any tax upon the
233
sale of the articles upon furnishing such proof of the sale and exportation as the commission may
234
require.
235
Section 4.
Section
59-14-407
is amended to read:
236
59-14-407. Reporting of manufacturer name.
237
(1) As used in this section:
238
(a) "Cigarette" has the same meaning as defined in Section [
26-44-202
]
59-14-602
.
239
(b) "Tobacco product manufacturer" has the same meaning as defined in Section
240
[
26-44-202
]
59-14-602
.
241
(2) Any manufacturer, distributor, wholesaler, or retail dealer who under Section
242
59-14-205
affixes a stamp to an individual package or container of cigarettes manufactured by a
243
tobacco product manufacturer required to place funds into escrow under Section [
26-44-203
]
244
59-14-603
shall report annually to the commission:
245
(a) the quantity of cigarettes in the package or container; and
246
(b) the name of the manufacturer of the cigarettes.
247
(3) Any manufacturer, distributor, wholesaler, retail dealer, or other person who is required
248
to pay the tax levied under Part 3, Tobacco Products, on a tobacco product defined as a cigarette
249
under Section [
26-44-202
]
59-14-602
and manufactured by a tobacco product manufacturer
250
required to place funds into escrow under Section [
26-44-203
]
59-14-603
shall report annually to
251
the commission:
252
(a) the quantity of cigarettes upon which the tax is levied; and
253
(b) the name of the manufacturer of each cigarette.
254
(4) The reports under Subsections (2) and (3) shall be made no later than January 31 for
255
the preceding calendar year pursuant to rules established by the commission in accordance with
256
Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
257
Section 5.
Section
59-14-600
, which is renumbered from Section 26-44-101 is renumbered
258
and amended to read:
259
Part 6. Model Tobacco Settlement Statute
260
[26-44-101]. 59-14-600. Title.
261
[The chapter] This part is known as the "Model Tobacco [Manufacturers Responsibility
262
Act] Settlement Statute."
263
Section 6.
Section
59-14-601
, which is renumbered from Section 26-44-201 is renumbered
264
and amended to read:
265
[26-44-201]. 59-14-601. Findings and purpose.
266
(1) Cigarette smoking presents serious public health concerns to the State and to the
267
citizens of the State. The Surgeon General has determined that smoking causes lung cancer, heart
268
disease and other serious diseases, and that there are hundreds of thousands of tobacco-related
269
deaths in the United States each year. These diseases most often do not appear until many years
270
after the person in question begins smoking.
271
(2) Cigarette smoking also presents serious financial concerns for the State. Under certain
272
health-care programs, the State may have a legal obligation to provide medical assistance to
273
eligible persons for health conditions associated with cigarette smoking, and those persons may
274
have a legal entitlement to receive such medical assistance.
275
(3) Under these programs, the State pays millions of dollars each year to provide medical
276
assistance for these persons for health conditions associated with cigarette smoking.
277
(4) It is the policy of the State that financial burdens imposed on the State by cigarette
278
smoking be borne by tobacco product manufacturers rather than by the State to the extent that such
279
manufacturers either determine to enter into a settlement with the State or are found culpable by
280
the courts.
281
(5) On November 23, 1998, leading United States tobacco product manufacturers entered
282
into a settlement agreement, entitled the "Master Settlement Agreement," with the State. The
283
Master Settlement Agreement obligates these manufacturers, in return for a release of past, present,
284
and certain future claims against them as described therein, to pay substantial sums to the State
285
(tied in part to their volume of sales); to fund a national foundation devoted to the interests of
286
public health; and to make substantial changes in their advertising and marketing practices and
287
corporate culture, with the intention of reducing underage smoking.
288
(6) It would be contrary to the policy of the State if tobacco product manufacturers who
289
determine not to enter into such a settlement could use a resulting cost advantage to derive large,
290
short-term profits in the years before liability may arise without ensuring that the State will have
291
an eventual source of recovery from them if they are proven to have acted culpably. It is thus in
292
the interest of the State to require that such manufacturers establish a reserve fund to guarantee a
293
source of compensation and to prevent such manufacturers from deriving large, short-term profits
294
and then becoming judgment-proof before liability may arise.
295
Section 7.
Section
59-14-602
, which is renumbered from Section 26-44-202 is renumbered
296
and amended to read:
297
[26-44-202]. 59-14-602. Definitions.
298
As used in this part:
299
(1) "Adjusted for inflation" means increased in accordance with the formula for inflation
300
adjustment set forth in Exhibit C to the Master Settlement Agreement.
301
(2) "Affiliate" means a person who directly or indirectly owns or controls, is owned or
302
controlled by, or is under common ownership or control with, another person. Solely for purposes
303
of this definition, the terms "owns," "is owned" and "ownership" mean ownership of an equity
304
interest, or the equivalent thereof, of 10% or more, and the term "person" means an individual,
305
partnership, committee, association, corporation or any other organization or group of persons.
306
(3) "Allocable share" means Allocable Share as that term is defined in the Master
307
Settlement Agreement.
308
(4) "Cigarette" means any product that contains nicotine, is intended to be burned or heated
309
under ordinary conditions of use, and consists of or contains (a) any roll of tobacco wrapped in
310
paper or in any substance not containing tobacco; or (b) tobacco, in any form, that is functional in
311
the product, which, because of its appearance, the type of tobacco used in the filler, or its
312
packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or (c)
313
any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance,
314
the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or
315
purchased by, consumers as a cigarette described in clause (a) of this definition. The term
316
"cigarette" includes "roll-your-own," (i.e., any tobacco which, because of its appearance, type,
317
packaging, or labeling is suitable for use and likely to be offered to, or purchased by, consumers
318
as tobacco for making cigarettes). For purposes of this definition of "cigarette," 0.09 ounces of
319
"roll-your-own" tobacco shall constitute one individual "cigarette."
320
(5) "Master Settlement Agreement" means the settlement agreement (and related
321
documents) entered into on November 23, 1998, by the State and leading United States tobacco
322
product manufacturers.
323
(6) "Qualified escrow fund" means an escrow arrangement with a federally or State
324
chartered financial institution having no affiliation with any tobacco product manufacturer and
325
having assets of at least $1,000,000,000 where such arrangement requires that such financial
326
institution hold the escrowed funds' principal for the benefit of releasing parties and prohibits the
327
tobacco product manufacturer placing the funds into escrow from using, accessing, or directing
328
the use of the funds' principal except as consistent with Subsection [
26-44-203
]
59-14-603
(2).
329
(7) "Released claims" means Released Claims as that term is defined in the Master
330
Settlement Agreement.
331
(8) "Releasing parties" means Releasing Parties as that term is defined in the Master
332
Settlement Agreement.
333
(9) (a) "Tobacco product manufacturer" means an entity that after the date of enactment
334
of this Act directly (and not exclusively through any affiliate):
335
(i) manufactures cigarettes anywhere that such manufacturer intends to be sold in the
336
United States, including cigarettes intended to be sold in the United States through an importer
337
(except where such importer is an original participating manufacturer (as that term is defined in
338
the Master Settlement Agreement) that will be responsible for the payments under the Master
339
Settlement Agreement with respect to such cigarettes as a result of the provisions of Subsection
340
II(mm) of the Master Settlement Agreement and that pays the taxes specified in Subsection II(z)
341
of the Master Settlement Agreement, and provided that the manufacturer of such cigarettes does
342
not market or advertise such cigarettes in the United States);
343
(ii) is the first purchaser anywhere for resale in the United States of cigarettes
344
manufactured anywhere that the manufacturer does not intend to be sold in the United States; or
345
(iii) becomes a successor of an entity described in Subsection (9)(a)(i) or (ii).
346
(b) "Tobacco product manufacturer" shall not include an affiliate of a tobacco product
347
manufacturer unless such affiliate itself falls within any Subsection (9)(a)(i) through (iii).
348
(10) "Units sold" means the number of individual cigarettes sold in the State by the
349
applicable tobacco product manufacturer (whether directly or through a distributor, retailer or
350
similar intermediary or intermediaries) during the year in question, as measured by excise taxes
351
collected by the State on packs (or "roll-your-own" tobacco containers) bearing the excise tax
352
stamp of the State. The State Tax Commission shall promulgate such regulations as are necessary
353
to ascertain the amount of State excise tax paid on the cigarettes of such tobacco product
354
manufacturer for each year.
355
Section 8.
Section
59-14-603
, which is renumbered from Section 26-44-203 is renumbered
356
and amended to read:
357
[26-44-203]. 59-14-603. Requirements.
358
(1) Any tobacco product manufacturer selling cigarettes to consumers within the State
359
(whether directly or through a distributor, retailer or similar intermediary or intermediaries) after
360
the date of enactment of this Act shall do one of the following:
361
(a) become a participating manufacturer (as that term is defined in Section II(jj) of the
362
Master Settlement Agreement) and generally perform its financial obligations under the Master
363
Settlement Agreement; or
364
(b) place into a qualified escrow fund by April 15 of the year following the year in
365
question the following amounts (as such amounts are adjusted for inflation):
366
(i) 1999: $.0094241 per unit sold after the date of enactment of this Act;
367
(ii) 2000: $.0104712 per unit sold;
368
(iii) for each of 2001 and 2002: $.0136125 per unit sold;
369
(iv) for each of 2003 through 2006: $.0167539 per unit sold; and
370
(v) for each of 2007 and each year thereafter: $.0188482 per unit sold.
371
(2) A tobacco product manufacturer that places funds into escrow pursuant to Subsection
372
(1)(b) shall receive the interest or other appreciation on such funds as earned. Such funds
373
themselves shall be released from escrow only under the following circumstances:
374
(a) to pay a judgment or settlement on any released claim brought against such tobacco
375
product manufacturer by the State or any releasing party located or residing in the State. Funds
376
shall be released from escrow under this Subsection (2)(a):
377
(i) in the order in which they were placed into escrow; and
378
(ii) only to the extent and at the time necessary to make payments required under such
379
judgment or settlement;
380
(b) to the extent that a tobacco product manufacturer establishes that the amount it was
381
required to place into escrow in a particular year was greater than the State's allocable share of the
382
total payments that such manufacturer would have been required to make in that year under the
383
Master Settlement Agreement (as determined pursuant to Section IX(i)(2) of the Master Settlement
384
Agreement, and before any of the adjustments or offsets described in Section IX(i)(3) of that
385
Agreement other than the Inflation Adjustment) had it been a participating manufacturer, the
386
excess shall be released from escrow and revert back to such tobacco product manufacturer; or
387
(c) to the extent not released from escrow under Subsection (2)(a) or (b), funds shall be
388
released from escrow and revert back to such tobacco product manufacturer 25 years after the date
389
on which they were placed into escrow.
390
(3) Each tobacco product manufacturer that elects to place funds into escrow pursuant to
391
Subsection (1)(b) shall annually certify to the [executive director] commission that it is in
392
compliance with Subsection (1)(b) and Subsection (2). The [executive director] commission may
393
bring a civil action on behalf of the State against any tobacco product manufacturer that fails to
394
place into escrow the funds required under Subsection (1)(b) and Subsection (2). Any tobacco
395
product manufacturer that fails in any year to place into escrow the funds required under this
396
Subsection (1)(b) and Subsection (2) shall:
397
(a) be required within 15 days to place such funds into escrow as shall bring it into
398
compliance with Subsection (1)(b) and Subsection (2). The court, upon a finding of a violation
399
of Subsection (1)(b) or Subsection (2), may impose a civil penalty to be paid to the General Fund
400
in an amount not to exceed 5% of the amount improperly withheld from escrow per day of the
401
violation and in a total amount not to exceed 100% of the original amount improperly withheld
402
from escrow;
403
(b) in the case of a knowing violation, be required within 15 days to place such funds into
404
escrow as shall bring it into compliance with Subsection (1)(b) and Subsection (2). The court,
405
upon a finding of a knowing violation of Subsection (1)(b) or Subsection (2), may impose a civil
406
penalty to be paid to the General Fund of the State in an amount not to exceed 15% of the amount
407
improperly withheld from escrow per day of the violation and in a total amount not to exceed
408
300% of the original amount improperly withheld from escrow; and
409
(c) in the case of a second knowing violation, be prohibited from selling cigarettes to
410
consumers within the State (whether directly or through a distributor, retailer or similar
411
intermediary) for a period not to exceed 2 years.
412
(4) Each failure to make an annual deposit required under Subsection (1)(b) shall
413
constitute a separate violation.
414
(5) A court shall award the State its costs and attorneys fees incurred in bringing any action
415
in which the State establishes that a tobacco product manufacturer has violated this section.
416
Section 9.
Section
59-14-701
, which is renumbered from Section 26-44-301 is renumbered
417
and amended to read:
418
Part 7. Master Settlement Agreement Provisions
419
[26-44-301]. 59-14-701. Construction of this part.
420
This part sets forth definitions in the Master Settlement Agreement that are
421
cross-referenced in Part [2] 6, Model Tobacco Settlement Statute. This part is intended for
422
convenience only and may not be construed as substantively or otherwise altering Part [2] 6, Model
423
Tobacco Settlement Statute, or the Master Settlement Agreement. Where Part [2] 6 instructs that
424
a term be given the same definition as that term is given in the Master Settlement Agreement, the
425
definition shall be that set forth in the Master Settlement Agreement, as it may be amended from
426
time to time.
427
Section 10.
Section
59-14-702
, which is renumbered from Section 26-44-302 is
428
renumbered and amended to read:
429
[26-44-302]. 59-14-702. Formula for inflation adjustments.
430
The formula for calculating inflation adjustments, which is referenced in Subsection
431
[
26-44-202
]
59-14-602
(1), is set forth in Exhibit C of the Master Settlement Agreement as follows,
432
with the exception of Subsection (7) which is omitted:
433
Exhibit C
434
Formula For Calculating Inflation Adjustment
435
(1) Any amount that, in any given year, is to be adjusted for inflation pursuant to this
436
Exhibit, the "Base Amount," shall be adjusted upward by adding to such Base Amount the
437
Inflation Adjustment.
438
(2) The Inflation Adjustment shall be calculated by multiplying the Base Amount by the
439
Inflation Adjustment Percentage applicable in that year.
440
(3) The Inflation Adjustment Percentage applicable to payments due in the year 2000 shall
441
be equal to the greater of 3% or the CPI%. For example, if the Consumer Price Index for
442
December 1999, as released in January 2000, is 2% higher than the Consumer Price Index for
443
December 1998, as released in January 1999, then the CPI% with respect to a payment due in 2000
444
would be 2%. The Inflation Adjustment Percentage applicable in the year 2000 would thus be 3%.
445
(4) The Inflation Adjustment Percentage applicable to payments due in any year after 2000
446
shall be calculated by applying each year the greater of 3% or the CPI% on the Inflation
447
Adjustment Percentage applicable to payments due in the prior year. Continuing the example in
448
subsection (3) above, if the CPI% with respect to a payment due in 2001 is 6%, then the Inflation
449
Adjustment Percentage applicable in 2001 would be 9.1800000%, an additional 6% applied on the
450
3% Inflation Adjustment Percentage applicable in 2000, and if the CPI% with respect to a payment
451
due in 2002 is 4%, then the Inflation Adjustment Percentage applicable in 2002 would be
452
13.5472000%, an additional 4% applied on the 9.1800000% Inflation Adjustment Percentage
453
applicable in 2001.
454
(5) "Consumer Price Index" means the Consumer Price Index for All Urban Consumers
455
as published by the Bureau of Labor Statistics of the U.S. Department of Labor, or other similar
456
measures agreed to by the Settling States and the Participating Manufacturers.
457
(6) The "CPI%" means the actual total percent change in the Consumer Price Index during
458
the calendar year immediately preceding the year in which the payment in question is due.
459
Section 11.
Section
59-14-703
, which is renumbered from Section 26-44-303 is
460
renumbered and amended to read:
461
[26-44-303]. 59-14-703. Allocable share.
462
(1) "Allocable Share," which is referenced is Subsection [
26-44-202
]
59-14-602
(3), is
463
defined in the Master Settlement Agreement as follows:
464
"Allocable Share" means the percentage set forth for the State in question as listed in
465
Exhibit A hereto, without regard to any subsequent alteration or modification of such State's
466
percentage share agreed to or by or among any States; or, solely for the purpose of calculating
467
payments under subsection IX(c)(2) (and corresponding payments under subsection IX(i)), the
468
percentage disclosed for the State in question pursuant to subsection IX(c)(2)(A) prior to June 30,
469
1999, without regard to any subsequent alteration or modification of such State's percentage share
470
agreed to by or among any States.
471
(2) The percentage set forth for Utah in Exhibit A to the Master Settlement Agreement is
472
0.4448869%.
473
(3) The percentage for calculating "Strategic Contribution Payments" to Utah under
474
subsection IX(c)(2) is to be determined by a three-member Allocation Committee in accordance
475
with Exhibit U of the Master Settlement Agreement.
476
Section 12.
Section
59-14-704
, which is renumbered from Section 26-44-304 is
477
renumbered and amended to read:
478
[26-44-304]. 59-14-704. Released claims.
479
(1) "Released Claims," which is referenced in Subsection [
26-44-202
]
59-14-602
(7), is
480
defined in the Master Settlement Agreement as follows:
481
"Released Claims" means:
482
(1) for past conduct, acts or omissions, including any damages incurred in the future
483
arising from such past conduct, acts or omissions, those Claims directly or indirectly based on,
484
arising out of or in any way related, in whole or in part, to (A) the use, sale, distribution,
485
manufacture, development, advertising, marketing or health effects of, (B) the exposure to, or (C)
486
research, statements, or warnings regarding, Tobacco Products, including, but not limited to, the
487
Claims asserted in the actions identified in Exhibit D, or any comparable Claims that were, could
488
be or could have been asserted now or in the future in those actions or in any comparable action
489
in federal, state or local court brought by a Settling State or a Releasing Party, whether or not such
490
Settling State or Releasing Party has brought such action, except for claims not asserted in the
491
actions identified in Exhibit D for outstanding liability under existing licensing, or similar, fee
492
laws or existing tax laws, but not excepting claims for any tax liability of the Tobacco-Related
493
Organizations or of any Released Party with respect to such Tobacco-Related Organizations, which
494
claims are covered by the release and covenants set forth in this Agreement;
495
(2) for future conduct, acts or omissions, only those monetary Claims directly or indirectly
496
based on, arising out of or in any way related to, in whole or in part, the use of or exposure to
497
Tobacco Products manufactured in the ordinary course of business, including without limitation
498
any future Claims for reimbursement of health care costs allegedly associated with the use of or
499
exposure to Tobacco Products.
500
(2) Exhibit D is a list of the titles and docket numbers of the lawsuits brought by states
501
against tobacco manufacturers and the courts in which those lawsuits were filed as of the date that
502
the Master Settlement Agreement was entered into.
503
Section 13.
Section
59-14-705
, which is renumbered from Section 26-44-305 is
504
renumbered and amended to read:
505
[26-44-305]. 59-14-705. Releasing parties.
506
"Releasing Parties," which is referenced in Subsection [
26-44-202
]
59-14-602
(8), is
507
defined in the Master Settlement Agreement as follows:
508
(1) "Releasing Parties" means each Settling State and any of its past, present and future
509
agents, officials acting in their official capacities, legal representatives, agencies, departments,
510
commissions and divisions; and also means, to the full extent of the power of the signatories hereto
511
to release past, present and future claims, the following: (1) any Settling State's subdivisions,
512
political or otherwise, including, but not limited to, municipalities, counties, parishes, villages,
513
unincorporated districts and hospital districts, public entities, public instrumentalities and public
514
educational institutions; and (2) persons or entities acting in a parens patriae, sovereign,
515
quasi-sovereign, private attorney general, qui tam, taxpayer, or any other capacity, whether or not
516
any of them participate in this settlement, (A) to the extent that any such person or entity is seeking
517
relief on behalf of or generally applicable to the general public in such Settling State or the people
518
of the State, as opposed solely to private or individual relief for separate and distinct injuries, or
519
(B) to the extent that any such entity, as opposed to an individual, is seeking recovery of
520
health-care expenses, other than premium or capitation payments for the benefit of present or
521
retired state employees, paid or reimbursed, directly or indirectly, by a Settling State.
522
Section 14.
Section
59-14-706
, which is renumbered from Section 26-44-306 is
523
renumbered and amended to read:
524
[26-44-306]. 59-14-706. Original participating manufacturer and related
525
terms.
526
(1) "Original Participating Manufacturer," which is referenced in Subsection [
26-44-202
]
527
59-14-602
(9)(a)(i), is defined in the Master Settlement Agreement as follows:
528
"Original Participating Manufacturer" means Brown & Williamson Tobacco Corporation,
529
Lorillard Tobacco Company, Phillip Morris Incorporated and R.J. Reynolds Tobacco Company,
530
and the respective successors of each of the foregoing. Except as expressly providing in this
531
Agreement, once an entity becomes an Original Participating Manufacturer, such entity shall
532
permanently retain the status of Original Participating Manufacturer.
533
(2) Subsection II(mm) of the Master Settlement Agreement, which is referenced in
534
Subsection [
26-44-202
]
59-14-602
(9)(a)(i), is the following definition of "relative market share":
535
"Relative market share" means an original participating manufacturer's respective share,
536
expressed as a percentage, of the total number of individual cigarettes shipped in or to the 50
537
United States, the District of Columbia and Puerto Rico by all the original participating
538
manufacturers during the calendar year immediately preceding the year in which the payment at
539
issue is due, regardless of when such payment is made, as measured by the original participating
540
manufacturers' reports of shipments of cigarettes to Management Science Associates, Inc., or a
541
successor entity acceptable to both the original participating manufacturers and a majority of those
542
attorneys general who are both the attorney general of a settling state and a member of the NAAG
543
executive committee at the time in question. A cigarette shipped by more than one participating
544
manufacturer shall be deemed to have been shipped solely by the first participating manufacturer
545
to do so. For purposes of the definition and determination of "relative market share," 0.09 ounces
546
of "roll your own" tobacco shall constitute one individual cigarette.
547
(3) Subsection II(z) of the Master Settlement Agreement, which is referenced in
548
Subsection [
26-44-202
]
59-14-602
(9)(a)(i), is the following definition of "market share":
549
"Market share" means a tobacco product manufacturer's respective share, expressed as a
550
percentage, of the total number of individual cigarettes sold in the 50 United States, the District
551
of Columbia and Puerto Rico during the applicable calendar year, as measured by excise taxes
552
collected by the federal government and, in the case of sales in Puerto Rico, arbitrios de cigarillos
553
collected by the Puerto Rico taxing authority. For purposes of the definition and determination
554
of "market share" with respect to calculations under subsection IX(i), 0.09 ounces of "roll your
555
own" tobacco shall constitute one individual cigarette; for purposes of the definition and
556
determination of "market share" with respect to all other calculations, 0.0325 ounces of "roll your
557
own" tobacco shall constitute one individual cigarette.
558
Section 15.
Section
59-14-707
, which is renumbered from Section 26-44-307 is
559
renumbered and amended to read:
560
[26-44-307]. 59-14-707. Participating manufacturer.
561
(1) "Participating Manufacturer," which is referenced in Subsection [
26-44-203
]
562
59-14-603
(1), is defined in the Master Settlement Agreement as follows:
563
"Participating Manufacturer" means a Tobacco Product Manufacturer that is or becomes
564
a signatory to this Agreement, provided that (1) in the case of a Tobacco Product Manufacturer that
565
is not an Original Participating Manufacturer, such Tobacco Product Manufacturer is bound by this
566
Agreement and the Consent Decree, or, in any Settling State that does not permit amendment of
567
the Consent Decree, a Consent Decree containing terms identical to those set forth in the Consent
568
Decree, in all Settling States in which this Agreement and the Consent Decree binds Original
569
Participating Manufacturers, provided, however, that such Tobacco Product Manufacturer need
570
only become bound by the Consent Decree in those Settling State in which the Settling State has
571
filed a Released Claim against it, and (2) in the case of a Tobacco Product Manufacturer that signs
572
this Agreement after the MSA Execution Date, such Tobacco Product Manufacturer, within a
573
reasonable period of time after signing this Agreement, makes any payments, including interest
574
thereon at the Prime Rate, that it would have been obligated to make in the intervening period had
575
it been a signatory as of the MSA Execution Date. "Participating Manufacturer" shall also include
576
the successor of a Participating Manufacturer. Except as expressly provided in this Agreement,
577
once an entity becomes a Participating Manufacturer such entity shall permanently retain the status
578
of Participating Manufacturer. Each Participating Manufacturer shall regularly report its shipments
579
of Cigarettes in or to the 50 United States, the District of Columbia and Puerto Rico to
580
Management Science Associates, Inc., or a successor entity as set forth in subsection (mm). Solely
581
for purposes of calculations pursuant to subsection IX(d), a Tobacco Product Manufacturer that
582
is not a signatory to this Agreement shall be deemed to be a "Participating Manufacturer" if the
583
Original Participating Manufacturers unanimously consent in writing.
584
(2) Subsection IX(d) relates to Nonparticipating Manufacturer Adjustments.
585
Section 16.
Section
59-14-708
, which is renumbered from Section 26-44-308 is
586
renumbered and amended to read:
587
[26-44-308]. 59-14-708. Payments by subsequent participating
588
manufacturers.
589
Section XI(i)(2) and IX(i)(3) of the Master Settlement Agreement, which are referenced
590
in Subsection [
26-44-203
]
59-14-603
(2)(b), involve payments by subsequent participating
591
manufacturers and providers as follows:
592
(1) A Subsequent Participating Manufacturer shall have payment obligations under this
593
Agreement only in the event that its Market Share in any calendar year exceeds the greater of (1)
594
its 1998 Market Share or (2) 125% of its 1997 Market Share, subject to the provisions of
595
subsection (i)(4). In the year following any such calendar year, such Subsequent Participating
596
Manufacturer shall make payments corresponding to those due in that same following year from
597
the Original Participating Manufacturers pursuant to subsections VI(c), except for the payment due
598
on March 31, 1999, IX(c)(1), IX(c)(2) and IX(e). The amounts of such corresponding payments
599
by a Subsequent Participating Manufacturer are in addition to the corresponding payments that are
600
due from the Original Participating Manufacturers and shall be determined as described in
601
subsection (2) and (3) below. Such payments by a Subsequent Participating Manufacturer shall
602
(A) be due on the same dates as the corresponding payments are due from Original Participating
603
manufacturers; (B) be for the same purpose as such corresponding payments; and (C) be paid,
604
allocated and distributed in the same manner as such corresponding payments.
605
(2) The base amount due from a Subsequent Participating Manufacturer on any given date
606
shall be determined by multiplying (A) the corresponding base amount due on the same date from
607
all of the Original Participating Manufacturers, as such base amount is specified in the
608
corresponding subsection of this agreement and is adjusted by the Volume Adjustment, except for
609
the provisions of subsection (B)(ii) of Exhibit E, but before such base amount is modified by any
610
other adjustments, reductions or offsets, by (B) the quotient produced by dividing (i) the result of
611
(x) such Subsequent Participating Manufacturer's Applicable Market Share, the applicable Market
612
Share being that for the calendar year immediately preceding the year in which the payment in
613
question is due, minus (y) the greater of (1) its 1998 Market Share or (2) 125% of its 1997 Market
614
Share, by (ii) the aggregate Market Shares of the Original Participating Manufacturers, the
615
applicable Market Shares being those for the calendar year immediately preceding the year in
616
which the payment in question is due.
617
(3) Any payment due from a Subsequent Participating Manufacturer under subsections (1)
618
and (2) above shall be subject, up to the full amount of such payment, to the Inflation Adjustment,
619
the Nonsettling States Reduction, the NPM Adjustment, the offset for miscalculated or disputed
620
payments described in subsection XI(i), the Federal Tobacco Legislation Offset, the Litigating
621
Releasing Parties Offset and the offsets for claims over described in subsections XII(a)(4)(B) and
622
XII(a)(8), to the extent that such adjustments, reductions or offsets would apply to the
623
corresponding payment due from the Original Participating Manufacturers. Provided, however,
624
that all adjustments and offsets to which a Subsequent Participating Manufacturer is entitled may
625
only be applied against payments by such Subsequent Participating Manufacturer, if any, that are
626
due within 12 months after the date on which the Subsequent Participating Manufacturer becomes
627
entitled to such adjustment or makes the payment that entitles it to such offset, and shall not be
628
carried forward beyond that time even if not fully used.
629
(4) For purposes of this Subsection (i), the 1997, or 1998, as applicable, Market Share, and
630
125% thereof, of those Subsequent Participating Manufacturers that either (A) became a signatory
631
to the Agreement more than 60 days after the MSA Execution Date or (B) had no Market Share
632
in 1997, or 1998, as applicable, shall equal zero.
633
Section 17.
Section
59-14-801
is enacted to read:
634
Part 8. Other Tobacco Settlement Provisions
635
59-14-801. Availability of master settlement agreement.
636
The commission shall provide a copy of the Master Settlement Agreement for review or
637
purchase to any person upon request and may charge a fee for doing so in accordance with
638
Subsection
59-1-210
(26).
639
Section 18.
Section
63-2-206
is amended to read:
640
63-2-206. Sharing records.
641
(1) A governmental entity may provide a record that is private, controlled, or protected to
642
another governmental entity, a government-managed corporation, a political subdivision, the
643
federal government, or another state if the requesting entity:
644
(a) serves as a repository or archives for purposes of historical preservation, administrative
645
maintenance, or destruction;
646
(b) enforces, litigates, or investigates civil, criminal, or administrative law, and the record
647
is necessary to a proceeding or investigation;
648
(c) is authorized by state statute to conduct an audit and the record is needed for that
649
purpose; or
650
(d) is one that collects information for presentence, probationary, or parole purposes.
651
(2) A governmental entity may provide a private or controlled record or record series to
652
another governmental entity, a political subdivision, a government-managed corporation, the
653
federal government, or another state if the requesting entity provides written assurance:
654
(a) that the record or record series is necessary to the performance of the governmental
655
entity's duties and functions;
656
(b) that the record or record series will be used for a purpose similar to the purpose for
657
which the information in the record or record series was collected or obtained; and
658
(c) that the use of the record or record series produces a public benefit that outweighs the
659
individual privacy right that protects the record or record series.
660
(3) A governmental entity may provide a record or record series that is protected under
661
Subsection
63-2-304
(1) or (2) to another governmental entity, a political subdivision, a
662
government-managed corporation, the federal government, or another state if:
663
(a) the record is necessary to the performance of the requesting entity's duties and
664
functions; or
665
(b) the record will be used for a purpose similar to the purpose for which the information
666
in the record or record series was collected or obtained.
667
(4) (a) A governmental entity shall provide a private, controlled, or protected record to
668
another governmental entity, a political subdivision, a government-managed corporation, the
669
federal government, or another state if the requesting entity:
670
(i) is entitled by law to inspect the record;
671
(ii) is required to inspect the record as a condition of participating in a state or federal
672
program or for receiving state or federal funds; or
673
(iii) is an entity described in Subsection
63-2-206
(1)(a), (b), (c), or (d).
674
(b) Subsection (4)(a)(iii) applies only if the record is a record described in Subsection
675
63-2-304
(4).
676
(5) Before disclosing a record or record series under this section to another governmental
677
entity, another state, the United States, or a foreign government, the originating governmental
678
entity shall:
679
(a) inform the recipient of the record's classification and the accompanying restrictions on
680
access; and
681
(b) if the recipient is not a governmental entity to which this chapter applies, obtain the
682
recipient's written agreement which may be by mechanical or electronic transmission that it will
683
abide by those restrictions on access unless a statute, federal regulation, or interstate agreement
684
otherwise governs the sharing of the record or record series.
685
(6) A governmental entity may disclose a record to another state, the United States, or a
686
foreign government for the reasons listed in Subsections (1), (2), and (3) without complying with
687
the procedures of Subsection (2) or (5) if disclosure is authorized by executive agreement, treaty,
688
federal statute, compact, federal regulation, or state statute.
689
(7) A governmental entity receiving a record under this section is subject to the same
690
restrictions on disclosure of the material as the originating entity.
691
(8) Notwithstanding any other provision of this section, if a more specific court rule or
692
order, state statute, federal statute, or federal regulation prohibits or requires sharing information,
693
that rule, order, statute, or federal regulation controls.
694
(9) The following records may not be shared under this section:
695
[(a) except as provided under Section
59-1-403
, records held by the State Tax Commission
696
that pertain to any person and that are gathered under authority of Title 59, Revenue and Taxation;]
697
[(b)] (a) records held by the Division of Oil, Gas and Mining that pertain to any person and
698
that are gathered under authority of Title 40, Chapter 6, Board and Division of Oil, Gas and
699
Mining; and
700
[(c)] (b) records of publicly funded libraries as described in Subsection
63-2-302
(1)(c).
701
(10) Records that may evidence or relate to a violation of law may be disclosed to a
702
government prosecutor, peace officer, or auditor.
Legislative Review Note
as of 1-25-00 3:31 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.