Florida Senate - 2014 SB 614
By Senator Altman
16-00220-14 2014614__
1 A bill to be entitled
2 An act relating to cigarette products of nonsettling
3 manufacturers; creating s. 210.23, F.S.; providing a
4 purpose; providing definitions; imposing a fee on the
5 sale, receipt, purchase, possession, consumption,
6 handling, distribution, and use of nonsettling
7 manufacturer cigarettes that are required to have a
8 stamp affixed or stamp insignia applied to the package
9 of cigarettes on which tax is otherwise required to be
10 paid; providing that the fee imposed is in addition to
11 any other privilege, license, fee, or tax required or
12 imposed by state law; prescribing methods to affix a
13 stamp or stamp insignia to the tobacco products;
14 requiring a settling manufacturer to certify the names
15 of certain brand families to the Attorney General;
16 requiring the Division of Alcoholic Beverages and
17 Tobacco of the Department of Business and Professional
18 Regulation to post a directory listing of certain
19 settling manufacturers on its website; requiring that
20 cigarettes of a brand family that are not on the
21 directory list be presumed to be nonsettling
22 manufacturer cigarettes; requiring each dealer, agent,
23 and distributing agent, and distributor to report
24 additional information; requiring the report to
25 include certain information; providing penalties for a
26 nonsettling manufacturer that fails to pay the
27 mandated fee; providing for application; providing
28 conditions for imposing the fee on certain subsequent
29 participating manufacturers; authorizing the division
30 to adopt rules; providing an effective date.
31
32 Be It Enacted by the Legislature of the State of Florida:
33
34 Section 1. Section 210.23, Florida Statutes, is created to
35 read:
36 210.23 Nonsettling manufacturer cigarettes.—
37 (1) PURPOSE.—The purpose of this section is to:
38 (a) Prevent nonsettling manufacturers from undermining the
39 state policy of discouraging underage smoking by offering
40 cigarettes and cigarette tobacco products at prices that are
41 substantially lower than the prices of cigarettes of other
42 manufacturers.
43 (b) Protect the tobacco settlement agreement and its
44 funding, which has been reduced because of the growth in sales
45 of nonsettling manufacturer cigarettes, by recouping state
46 revenue that is lost because of sales of nonsettling
47 manufacturers cigarettes.
48 (c) Provide funding to enforce and administer legislation
49 relating to nonsettling manufacturers.
50 (2) DEFINITIONS.—As used in this section, the term:
51 (a) “Brand family” means each style of cigarettes sold
52 under a common brand name, trademark, logo, symbol, motto,
53 selling message, recognizable pattern of colors, or other
54 indication of product identification.
55 (b) “Credit amendment” means an amendment to the Master
56 Settlement Agreement which offers a credit to subsequent
57 participating manufacturers for amounts paid under that
58 agreement with respect to their products in a form agreed upon
59 by:
60 1. The settling states, as defined in the Master Settlement
61 Agreement, having aggregate allocable shares, as defined in the
62 Master Settlement Agreement, equal to at least 99.937049
63 percent;
64 2. The original participating manufacturers, as defined in
65 the Master Settlement Agreement; and
66 3. The subsequent participating manufacturers that would
67 otherwise be required to pay the fee under subsection (3) whose
68 aggregate market share, expressed as a percentage of the total
69 number of individual cigarettes sold in the 50 states, the
70 District of Columbia, and Puerto Rico, during the calendar year
71 at issue, as measured by excise taxes collected by the Federal
72 Government and, in the case of cigarettes sold in Puerto Rico,
73 by “arbitrios de cigarillos” collected by the Puerto Rico taxing
74 authority, is greater than 3.75 percent. For purposes of
75 calculating subsequent participating manufacturer share under
76 this section, 0.09 ounces of roll-your-own tobacco constitutes
77 one individual cigarette.
78 (c) “Manufacturer” means a person that manufactures,
79 fabricates, or assembles cigarettes or cigarette tobacco
80 products for sale or distribution, including a person that is
81 the first importer into the United States of cigarettes
82 manufactured outside the United States.
83 (d) “Master Settlement Agreement” means the settlement
84 agreement entered into on November 23, 1998, by the settling
85 states and the participating manufacturers, as defined in that
86 agreement, as amended to date.
87 (e) “Nonsettling manufacturer” means a manufacturer of
88 cigarettes which is not a settling manufacturer.
89 (f) “Nonsettling manufacturer cigarettes” means cigarettes
90 that are not manufactured by a settling manufacturer.
91 (g) “Settling manufacturer” means a manufacturer of
92 cigarettes which:
93 1. Signed one of the tobacco settlement agreements before
94 July 1, 2008; or
95 2. Has voluntarily entered into an agreement with this
96 state, approved by the division, agreeing to terms similar to
97 those contained in the tobacco settlement agreement described in
98 subparagraph (i)1., including making annual payments to the
99 state with respect to the sale, receipt, purchase, possession,
100 consumption, handling, distribution, and use in this state of
101 its cigarettes which equal at least the amount of the fee that
102 would have been due on such cigarettes under subsection (3) for
103 the relevant year if the manufacturer were a nonsettling
104 manufacturer.
105 (h) “Settling manufacturer cigarettes” means:
106 1. Cigarettes of a brand family that a settling
107 manufacturer certifies under subsection (4) is to be deemed its
108 brand family for purposes of calculating such settling
109 manufacturer’s payments under the tobacco settlement agreement
110 described in subparagraph (i)1. or other agreement described in
111 subparagraph (g)2. for the relevant year; or
112 2. Any other cigarettes that are included in calculating
113 payments due by a settling manufacturer under the tobacco
114 settlement agreement described in subparagraph (i)1. or other
115 agreement described in subparagraph (g)2.
116 (i) “Tobacco settlement agreement” means:
117 1. The settlement agreement entered into on August 25,
118 1997, in settlement of State of Florida v. American Tobacco Co.,
119 No. 95-1466AH (Fla. 15th Cir. Ct. 1996), and under which the
120 settling manufacturer undertook payment obligations to the
121 state; or
122 2. The settlement agreement entered into on March 15, 1996,
123 in settlement of State of Florida v. American Tobacco Co., No.
124 95-1466AH (Fla. 15th Cir. Ct. 1996).
125 (3) FEE IMPOSED.—
126 (a) A fee of 2.6 cents is imposed on the sale, receipt,
127 purchase, possession, consumption, handling, distribution, and
128 use in this state of each nonsettling manufacturer cigarette
129 that is required to have a stamp affixed or stamp insignia
130 applied to a package of such cigarettes under this chapter or on
131 which tax is otherwise required to be paid under this chapter.
132 Such fee is in addition to any other privilege, license, fee, or
133 tax required or imposed by state law.
134 (b) The fee imposed by this section shall be collected from
135 distributors, dealers, agents, and distributing agents of
136 nonsettling manufacturer cigarettes or from other persons from
137 which the tax imposed by this chapter on such nonsettling
138 manufacturer cigarettes may be collected under this chapter and
139 in the manner provided in this chapter.
140 (c) With respect to nonsettling manufacturer cigarettes,
141 the division shall prescribe, prepare, and furnish stamps of
142 such denominations and quantities as are necessary for the
143 payment of the fee imposed by this subsection, and the division
144 may also authorize the fee to be paid through the use of a stamp
145 insignia to be applied by metering machines. Such stamps or
146 stamp insignia are required and shall be sold, affixed, and
147 administered in the same manner as the stamps and stamp insignia
148 that are prescribed, prepared, and furnished for the taxes
149 imposed by other provisions of this chapter. The division may
150 prescribe that payment of the fee imposed by this subsection and
151 the tax imposed by s. 210.30 be by way of a single stamp or
152 stamp insignia the value of which must be the combined value of
153 such fee and tax and that the stamp or stamp insignia be
154 identifiable with such markings or colorings as are necessary to
155 distinguish the stamp or stamp insignia from the stamp or stamp
156 insignia used on cigarette packages not subject to the fee
157 imposed by this subsection.
158 (d) The fee imposed by this subsection does not apply to a
159 cigarette made by a settling manufacturer.
160 (4) SETTLING MANUFACTURER CERTIFICATION AND LIST.—
161 (a) By July 1, 2014, and by April 30 of each year
162 thereafter, each settling manufacturer shall certify to the
163 Attorney General, on a form prescribed by the Attorney General,
164 the names of the brand families which are to be deemed its
165 cigarettes for purposes of its tobacco settlement agreement or
166 other agreement described in subparagraph (g)1. for the relevant
167 year, including for purposes of calculating any payment
168 obligation of that settling manufacturer under that agreement in
169 the volume and shares determined under the agreement. A settling
170 manufacturer may not include a brand family in such
171 certification if it does not deem sales of cigarettes of that
172 brand family in this state to be its cigarettes for purposes of
173 the Master Settlement Agreement between 52 states and
174 territories and participating cigarette manufacturers. Each
175 settling manufacturer shall update such certification in the
176 event of any change within 30 calendar days after the date of
177 the change.
178 (b) By July 15, 2014, the division shall develop, maintain,
179 and publish on its website a directory listing of all settling
180 manufacturers that have provided certifications under paragraph
181 (a). The directory must also list the brand families provided in
182 the certifications of such settling manufacturers. The division
183 shall update the directory as necessary to add or remove a
184 manufacturer or brand family and to keep the directory in
185 conformity with the requirements of this section.
186 (c) The division shall provide the list to each dealer,
187 agent, and distributing agent authorized to affix stamps under
188 this chapter and to each distributor, as defined in s. 210.25.
189 The division shall provide the list to any other person upon
190 request.
191 (d) Cigarettes of a brand family that is not on the
192 directory list are presumed to be nonsettling manufacturer
193 cigarettes, which are subject to the fee imposed by subsection
194 (3).
195 (5) REPORTS.—
196 (a) Each dealer, agent, and distributing agent required to
197 file a report under s. 210.09 and each distributor required to
198 file a return under s. 210.55 shall, in addition to the
199 information required by those sections, include each month in
200 that required report or return, as appropriate:
201 1. The number of individual nonsettling manufacturer
202 cigarettes in packages on which the dealer, agent, distributing
203 agent, or distributor affixed or was required to affix a stamp
204 or stamp insignia by the use of a metering machine during the
205 preceding month;
206 2. The amount of the fee imposed by subsection (3) paid on
207 cigarettes described in subparagraph 1.; and
208 3. Other information that the division considers necessary
209 or appropriate to determine the amount of the fee imposed by
210 subsection (3), to enforce this section, or to provide the
211 reports showing fees paid for nonsettling manufacturer
212 cigarettes as required under subsection (3).
213 (b) The information required under paragraph (a) must be
214 itemized for each place of business and by manufacturer and
215 brand family.
216 (c) The division shall enforce the requirement to report
217 information under this section in the same manner as the
218 requirement to deliver to or file with the division a report or
219 return under this chapter.
220 (6) PENALTIES FOR NONCOMPLIANCE.—Nonsettling manufacturer
221 cigarettes subject to the fee imposed by subsection (3) but upon
222 which the fee has not been paid shall be treated as cigarettes
223 for which the tax assessed by this chapter has not been paid,
224 and all persons selling, receiving, purchasing, possessing,
225 consuming, handling, distributing, or using such cigarettes are
226 subject to the penalties imposed for violating this chapter.
227 (7) APPLICATION.—
228 (a) This section applies without regard to s. 210.06(5) or
229 any other law that might be read to create an exemption for
230 interstate sales.
231 (b) Except for ss. 210.011, 210.085, 210.095, 210.151,
232 210.1605, 210.1801, 210.185, 210.201, 210.276, 210.405, 210.45,
233 and 210.51, the remaining provisions of this chapter apply to
234 this section to the extent they do not conflict.
235 (c) The fee imposed by subsection (3) does not apply to
236 cigarettes of any subsequent participating manufacturer, as
237 defined in the Master Settlement Agreement, which would
238 otherwise be required to pay such fee until the effective date
239 of a credit amendment to the Master Settlement Agreement, and
240 such cigarettes shall be treated as settling manufacturer
241 cigarettes until such time.
242 (8) RULE AUTHORITY.—The Division of Alcoholic Beverages and
243 Tobacco may adopt rules to administer this section, including
244 rules that address reporting requirements and imposition,
245 collection, and enforcement of fees.
246 Section 2. This act shall take effect July 1, 2014.