HB 1207

1
A bill to be entitled
2An act relating to cigarette products of nonsettling
3manufacturers; creating s. 210.23, F.S.; providing the
4purpose of the act; creating s. 210.232, F.S.; defining
5terms; creating s. 210.234, F.S.; imposing a fee on the
6sale, receipt, purchase, possession, consumption,
7handling, distribution, and use of nonsettling
8manufacturer cigarettes that are required to have a stamp
9affixed or stamp insignia applied to the package of
10cigarettes on which tax is otherwise required to be paid;
11providing that the fee imposed is in addition to any other
12privilege, license, fee, or tax required or imposed by
13state law; prescribing methods to affix a stamp or
14insignia to the tobacco products; creating s. 210.236,
15F.S.; providing the fee rate for nonsettling
16manufacturers; creating s. 210.238, F.S.; requiring
17settling manufacturers to certify specified information to
18the Attorney General relating to the brand families of
19their cigarettes; requiring the Division of Alcoholic
20Beverages and Tobacco of the Department of Business and
21Professional Regulation to post a directory listing all
22settling manufacturers that have provided accurate
23certifications of their products to calculate payments
24under the tobacco settlement agreement for the relevant
25year on the Internet website of the division; providing
26that any cigarette of a brand family not on the directory
27list be presumptively considered a nonsettling
28manufacturer product; creating s. 210.240, F.S.; requiring
29each dealer, agent, and distributing agent to file a
30report; requiring the report to include certain specified
31information; creating s. 210.245, F.S.; providing
32penalties for a nonsettling manufacturer that fails to pay
33the mandated fees; creating s. 210.246, F.S.; providing
34for application of the act; creating s. 210.248, F.S.;
35authorizing the division to adopt rules; creating s.
36210.249, F.S.; providing conditions for imposing the fee
37on subsequent participating manufacturers who already make
38payments on Florida sales of cigarettes pursuant to the
39master settlement agreement; providing an effective date.
40
41Be It Enacted by the Legislature of the State of Florida:
42
43     Section 1.  Section 210.23, Florida Statutes, is created to
44read:
45     210.23  Purpose.-The purpose of ss. 210.23-210.248 is to:
46     (1)  Prevent nonsettling manufacturers from undermining
47this state's policy of discouraging underage smoking by offering
48cigarettes and cigarette tobacco products at prices that are
49substantially below the prices of cigarettes of other
50manufacturers.
51     (2)  Protect the tobacco settlement agreement and its
52funding, which has been reduced because of the growth of sales
53of nonsettling manufacturer cigarettes, by recouping for this
54state revenue that is lost because of sales of cigarettes by
55nonsettling manufacturers of cigarettes.
56     (3)  Provide funding to enforce and administer any
57legislation relating to nonsettling manufacturers.
58     (4)  Provide funding for any other purpose the Legislature
59determines.
60     Section 2.  Section 210.232, Florida Statutes, is created
61to read:
62     210.232  Definitions.-As used in ss. 210.23-210.248, the
63term:
64     (1)  "Agent" has the same meaning as in s. 210.01.
65     (2)  "Brand family" means each style of cigarettes sold
66under a common brand name, trademark, logo, symbol, motto,
67selling message, recognizable pattern of colors, or other
68indication of production identification.
69     (3)  "Cigarette" has the same meaning as in s. 210.01.
70     (4)  "Dealer" has the same meaning as in s. 210.01(5) and
71(6).
72     (5)  "Division" has the same meaning as in s. 210.01.
73     (6)  "Distributing agent" has the same meaning as in s.
74210.01.
75     (7)  "Distributor" has the same meaning as in s. 210.25.
76     (8)  "Manufacturer" means a person who manufactures,
77fabricates, or assembles cigarettes or cigarette tobacco
78products for sale or distribution. For purposes of ss. 210.23-
79210.248, the term includes a person who is the first importer
80into the United States of cigarettes manufactured outside the
81United States.
82     (9)  "Nonsettling manufacturer" means a manufacturer of
83cigarettes which is not a settling manufacturer.
84     (10)  "Nonsettling manufacturer cigarettes" means
85cigarettes that are not manufactured by a settling manufacturer.
86     (11)  "Settling manufacturer" means a manufacturer of
87cigarettes that:
88     (a)  Signed one of the tobacco settlement agreements before
89July 1, 2008; or
90     (b)  Has voluntarily entered into an agreement with this
91state, approved by the division, agreeing to terms similar to
92those contained in the tobacco settlement agreement described in
93paragraph (13)(a), including making annual payments to the state
94with respect to the sale, receipt, purchase, possession,
95consumption, handling, distribution, and use of its cigarettes
96in this state equal to at least the amount of the fee that would
97have been due on such cigarettes under ss. 210.23-210.248 for
98the relevant year if the manufacturer were a nonsettling
99manufacturer.
100     (12)  "Settling manufacturer cigarettes" means cigarettes
101of a brand family that a settling manufacturer certifies under
102s. 210.238 is to be deemed its brand family for purposes of
103calculating that settling manufacturer's payments under the
104tobacco settlement agreement or other agreement described in
105paragraph (11)(b) for the relevant year, including for purposes
106of calculating any payment obligations of that settling
107manufacturer under that agreement, or any other cigarettes that
108are included in calculating payments due to be made by a
109settling manufacturer under the tobacco settlement agreement
110described in paragraph (13)(a) or other agreement described in
111paragraph (11)(b).
112     (13)  "Tobacco settlement agreement" means:
113     (a)  The settlement agreement entered into on August 25,
1141997, in settlement of State of Florida v. American Tobacco Co.,
115No. 95-1466AH (Fla. 15th Cir. Ct. 1996), and under which the
116settling manufacturer undertook payment obligations to the
117state; or
118     (b)  The settlement agreement entered into on March 15,
1191996, in settlement of State of Florida v. American Tobacco Co.,
120No. 95-1466AH (Fla. 15th Cir. Ct. 1996).
121     Section 3.  Section 210.234, Florida Statutes, is created
122to read:
123     210.234  Fee imposed.-
124     (1)  A fee is imposed on the sale, receipt, purchase,
125possession, consumption, handling, distribution, and use in this
126state of nonsettling manufacturer cigarettes that are required
127to have a stamp affixed or stamp insignia applied to a package
128of those cigarettes under this chapter or on which tax is
129otherwise required to be paid under this chapter.
130     (2)  The fee imposed by this section does not apply to
131cigarettes made by a settling manufacturer.
132     (3)  The fee imposed by this section is in addition to any
133other privilege, license, fee, or tax required or imposed by
134state law.
135     (4)  The fee imposed by this section shall be collected
136from distributors, dealers, agents, and distributing agents of
137nonsettling manufacturer cigarettes or from other persons or
138entities from whom the tax imposed by this chapter on such
139nonsettling manufacturer cigarettes may be collected under this
140chapter and in the manner provided by this chapter. The
141provisions of ss. 210.01, 210.02, 210.021, 210.03, 210.04,
142210.05, 210.06, 210.07, 210.08, 210.09, 210.10, 210.11, 210.12,
143210.13, 210.14, 210.15, 210.16, 210.161, 210.18, 210.181,
144210.19, 210.20, 210.22, 210.25, 210.30, 210.31, 210.35, 210.40,
145210.50, 210.55, 210.60, 210.65, 210.67, 210.70, and 210.75, so
146far as lawful or practicable, apply to the fee imposed by this
147section and to the collection thereof as if fully set out in ss.
148210.23-210.248. However, any one or more sections may not apply
149to the extent that the section conflicts with ss. 210.23-
150210.248.
151     (5)  With respect to nonsettling manufacturer cigarettes,
152the division shall prescribe, prepare, and furnish stamps of
153such denominations and quantities as may be necessary for the
154payment of the fee imposed by this section, and may also permit
155the fee to be paid through the use of a stamp insignia to be
156applied by metering machines. Such stamps or stamp insignia are
157required and shall be sold, affixed, and administered in the
158same manner as the stamps and stamp insignia that are
159prescribed, prepared, and furnished for the taxes imposed
160pursuant to other provisions of this chapter. The division may
161prescribe that payment of the fee imposed by this section and
162the tax imposed by s. 210.30 shall be by way of a single stamp
163or stamp insignia whose value shall be the combined value of
164such fee and tax, and which shall be identifiable with such
165markings or colorings as may be necessary to distinguish the
166stamp or stamp insignia from the stamp or stamp insignia used on
167cigarette packages not subject to the fee imposed by this
168section.
169     Section 4.  Section 210.236, Florida Statutes, is created
170to read:
171     210.236  Rate of fee.-The fee imposed pursuant to s.
172210.234 shall be at the rate of 2.6 cents for each nonsettling
173manufacturer cigarette.
174     Section 5.  Section 210.238, Florida Statutes, is created
175to read:
176     210.238  Settling manufacturer certification and list.-
177     (1)  By July 1, 2011, and annually thereafter, not later
178than the 30th day of April in each year, each settling
179manufacturer shall certify to the Attorney General, on a form
180prescribed by the Attorney General, the names of the brand
181families that are to be deemed its cigarettes for purposes of
182its tobacco settlement agreement or other agreement described in
183s. 210.232(11)(b) for the relevant year, including for purposes
184of calculating any payment obligations of that settling
185manufacturer under that agreement in the volume and shares
186determined under the agreement. A settling manufacturer may not
187include a brand family in such certification if it does not deem
188sales of cigarettes of that brand family in this state to be its
189cigarettes for purposes of the master settlement agreement as
190defined in s. 210.249. Each settling manufacturer shall update
191such information in the event of any change within 30 calendar
192days after the date of the change.
193     (2)  By July 15, 2011, the division shall develop,
194maintain, and publish on its Internet website a directory
195listing of all settling manufacturers that have provided
196accurate certifications under subsection (1). The directory
197shall list the brand families of such settling manufacturers
198included in such certifications. The division shall update the
199directory as necessary in order to add or remove a manufacturer
200or brand family and keep the directory in conformity with the
201requirements of ss. 210.23-210.248.
202     (3)  The division shall provide the list to each dealer,
203agent, or distributing agent authorized to affix stamps under
204this chapter, to each distributor, and to any other person upon
205request.
206     (4)  Cigarettes of a brand family that is not on the
207directory list shall be presumptively considered nonsettling
208manufacturer cigarettes to which the fee imposed by s. 210.234
209applies.
210     Section 6.  Section 210.240, Florida Statutes, is created
211to read:
212     210.240  Reports.-
213     (1)  Each dealer, agent, and distributing agent required to
214file a report under s. 210.05 or s. 210.09, and each distributor
215required to file a return under s. 210.55 or s. 210.60, shall,
216in addition to the information required by those sections,
217include in that required report or return each month, as
218appropriate:
219     (a)  The number of individual nonsettling manufacturer
220cigarettes in packages on which the dealer, agent, distributing
221agent, or distributor affixed or was required to affix a stamp
222or stamp insignia by the use of a metering machine during the
223preceding month;
224     (b)  The amount of the fee imposed by s. 210.234 paid on
225cigarettes described in paragraph (a); and
226     (c)  Any other information that the division considers
227necessary or appropriate to determine the amount of the fee
228imposed by s. 210.234, to enforce ss. 210.23-210.248, or to
229provide the reports showing fees paid for nonsettling
230manufacturer cigarettes.
231     (2)  The information required under subsection (1) must be
232itemized for each place of business and by manufacturer and
233brand family.
234     (3)  The requirement to report information under this
235section shall be enforced in the same manner as the requirement
236to deliver to or file with the division a report or return
237required under this chapter.
238     Section 7.  Section 210.245, Florida Statutes, is created
239to read:
240     210.245  Penalties for noncompliance.-Nonsettling
241manufacturer cigarettes subject to any fee imposed by ss.
242210.23-210.248, but upon which the fee has not been paid, shall
243be treated as cigarettes for which the tax assessed by this
244chapter has not been paid, and all persons selling, receiving,
245purchasing, possessing, consuming, handling, distributing, or
246using such cigarettes are subject to all penalties imposed by
247this chapter for violations of this chapter.
248     Section 8.  Section 210.246, Florida Statutes, is created
249to read:
250     210.246  Application.-Sections 210.23-210.248 apply without
251regard to s. 210.06(5), or any other law that might be read to
252create an exemption for interstate sales.
253     Section 9.  Section 210.248, Florida Statutes, is created
254to read:
255     210.248  General powers of the Division of Alcoholic
256Beverages and Tobacco.-The Division of Alcoholic Beverages and
257Tobacco may adopt rules to administer ss. 210.23-210.248,
258including rules that address the imposition, collection, and
259enforcement of the fees and required reporting.
260     Section 10.  Section 210.249, Florida Statutes, is created
261to read:
262     210.249  Exemption for subsequent participating
263manufacturers.-
264     (1)  The fee imposed under s. 210.234 does not apply to
265cigarettes of any subsequent participating manufacturer, as
266defined in the master settlement agreement, that would otherwise
267be required to pay the fee under s. 210.234 until the effective
268date of a credit amendment to the master settlement agreement,
269and such cigarettes shall be treated as settling manufacturer
270cigarettes until such time.
271     (2)  For purposes of this section, the term:
272     (a)  "Credit amendment" means an amendment to the master
273settlement agreement that offers a credit to subsequent
274participating manufacturers for amounts paid under that
275agreement with respect to their products in a form agreed upon
276by:
277     1.  The settling states, as defined in the master
278settlement agreement, with aggregate allocable shares, as
279defined in the master settlement agreement, equal to at least
28099.937049 percent;
281     2.  The original participating manufacturers, as defined in
282the master settlement agreement; and
283     3.  The subsequent participating manufacturers that would
284otherwise be required to pay the fee under s. 210.234 whose
285aggregate market share, expressed as a percentage of the total
286number of individual cigarettes sold in the 50 United States,
287the District of Columbia, and Puerto Rico during the calendar
288year at issue, as measured by excise taxes collected by the
289Federal Government, and in the case of cigarettes sold in Puerto
290Rico, by arbitrios de cigarillos collected by the Puerto Rico
291taxing authority, is greater than 3.75 percent. For purposes of
292calculation of subsequent participating manufacturer share under
293s. 210.234, 0.09 ounces of "roll your own" tobacco shall
294constitute one individual cigarette.
295     (b)  "Master settlement agreement" means the settlement
296agreement entered into on November 23, 1998, by the settling
297states and the participating manufacturers, as defined in that
298agreement, as amended to date.
299     Section 11.  This act shall take effect July 1, 2011.


CODING: Words stricken are deletions; words underlined are additions.