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First Substitute H.B. 312
This document includes Senate 2nd Reading Floor Amendments incorporated into the bill
on Tue, Mar 2, 2004 at 3:44 PM by rday. -->
This document includes Senate 2nd Reading Floor Amendments incorporated into the bill
on Tue, Mar 2, 2004 at 3:45 PM by rday. -->
This document includes Senate 2nd Reading Floor Amendments incorporated into the bill
on Tue, Mar 2, 2004 at 3:53 PM by rday. -->
Representative David Ure proposes the following substitute bill:
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NONPARTICIPATING TOBACCO
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MANUFACTURER'S FEE
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2004 GENERAL SESSION
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STATE OF UTAH
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Sponsor: David Ure
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LONG TITLE
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General Description:
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This bill modifies the Cigarette and Tobacco Tax and Licensing Act by imposing an
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equity assessment on nonparticipating manufacturer cigarettes.
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Highlighted Provisions:
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This bill:
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. defines terms;
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. levies an equity assessment of 1.75 cents per cigarette on nonparticipating tobacco
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product manufacturers; and
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. designates cigarettes in violation of this section as contraband goods.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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None
]
THIS BILL TAKES EFFECT ON JULY 1, 2004.
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Utah Code Sections Affected:
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AMENDS:
21b
59-14-213, AS LAST AMENDED BY CHAPTERS 52 AND 175, LAWS OF UTAH 2002
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ENACTS:
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S [
59-14-213, as last amended by Chapters 52 and 175, Laws of Utah 2002
] s
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59-14-214, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
59-14-213
is amended to read:
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59-14-213. Contraband goods.
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(1) Any cigarettes in violation of any state or federal law, including Sections
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59-14-203
,
59-14-205
,
59-14-211
[
or]
, Subsection
59-14-212
(1)
, or Section
59-14-214
are
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contraband goods and may be seized without a warrant by the commission, its employees, or
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any peace officer of the state or its political subdivisions.
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(2) Any goods seized pursuant to Subsection (1) shall be delivered to the commission
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and destroyed.
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(3) Any cigarettes, as defined in Subsection
59-22-202
(4), in violation of Subsection
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59-14-408
(2) are contraband goods and may be seized in accordance with Subsections (1) and
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(2).
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Section 2.
Section
59-14-214
is enacted to read:
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59-14-214. Nonparticipating manufacturer equity assessment.
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(1) As used in this section, "nonparticipating manufacturer" means a tobacco product
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manufacturer, as defined in Subsection
59-22-202
(9), that is not a participating manufacturer
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within the meaning of Subsection II(jj) of the Master Settlement Agreement, as defined in
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Subsection
59-22-202
(5).
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(2) (a) There is levied an equity assessment, at the rate of 1.75 cents on each cigarette,
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for all cigarette packages of nonparticipating manufacturers to which a stamp is affixed as
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required under Section
59-14-205
.
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(b) The equity assessment imposed by this section is in addition to all other
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assessments, fees, and taxes levied under existing law.
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(c) The equity assessment imposed by this section shall be paid by affixing a stamp in
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the manner and at the time described in Section
59-14-205
.
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(d) Except as otherwise provided in this section, the equity assessment shall be
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collected, paid, administered, and enforced in the same manner as the tax on cigarettes levied
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by Section
59-14-204
.
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(3) The purposes of this equity assessment are:
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(a) to recover health care costs to the state imposed by nonparticipating manufacturers;
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(b) to prevent nonparticipating manufacturers from undermining the state's policy of
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reducing underage smoking by offering cigarettes for sale substantially below the prices of
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cigarettes of other manufacturers;
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(c) to protect funding, which is reduced as a result of the growth of nonparticipating
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manufacturer cigarette sales, for programs funded in whole or in part by payments to the state
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under the Master Settlement Agreement, as defined in Subsection
59-22-202
(5);
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(d) to recoup settlement-payment revenue lost to the state as a result of
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nonparticipating manufacturer cigarette sales; and
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(e) to fund enforcement and administration of:
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(i) Section
59-14-408
;
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(ii) Sections
59-22-201
through
59-22-203
, related to nonparticipating manufacturers;
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and
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(iii) the equity assessment imposed by this section.
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(4) (a) Each manufacturer, distributor, wholesaler, or retail dealer who under Section
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59-14-205
affixes a stamp to a package of cigarettes, shall report monthly to the commission
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for each place of business, the number and denominations of stamps affixed to individual
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packages of nonparticipating manufacturer cigarettes sold by the manufacturer, distributor,
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wholesaler, or retail dealer in the preceding month, including the manufacturer and brand
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family.
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(b) A person required to file a report under this section is subject to the penalties under
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Section
59-1-401
for failing to file a report in a timely manner, or for supplying false or
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fraudulent information.
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SECTION 3. EFFECTIVE DATE.
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THIS BILL TAKES EFFECT JULY 1, 2004.
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Legislative Review Note
as of 2-13-04 4:49 PM
This bill requires all nonparticipating tobacco manufacturers to pay an equity assessment fee on
cigarettes sold in this state. This assessment is in addition to the state's escrow requirements for
nonparticipating manufacturers. The application of the assessment to nonparticipating
manufacturers only may violate the Equal Protection Clause and Due Process Clause of the
14th Amendment to the U.S. Constitution. The statute may withstand an equal protection and
due process challenge if the court determines that the Legislature's treatment of
nonparticipating manufacturers is rationally related to a legitimate governmental interest.