Senate Bill sb2140c1

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    Florida Senate - 2002                           CS for SB 2140

    By the Committee on Regulated Industries; and Senator Mitchell





    315-2131-02

  1                      A bill to be entitled

  2         An act relating to the tobacco settlement;

  3         creating part II of ch. 210, F.S., consisting

  4         of ss. 210.81-210.90, F.S.; providing a short

  5         title; providing legislative purpose; defining

  6         terms; prohibiting a permittee or licensee

  7         under ch. 210, F.S., from shipping or

  8         possessing for sale in or out of this state

  9         cigarettes not included on a list approved by

10         the Division of Alcoholic Beverages and Tobacco

11         of the Department of Business and Professional

12         Regulation; requiring the division to annually

13         prepare a list of certified cigarette brands;

14         providing requirements under which a

15         manufacturer's brands may be included on the

16         list; providing requirements for certification;

17         requiring that the division notify a

18         manufacturer and the Attorney General of its

19         determination of certification; requiring

20         reports by a permittee or licensee; authorizing

21         the division to impose penalties against a

22         permittee or licensee who violates the

23         prohibition against the sale or shipment of

24         certain cigarettes or who violates certain

25         reporting requirements; requiring that the

26         Attorney General seek an injunction or bring an

27         action in circuit court to enforce the act;

28         authorizing a manufacturer to bring an action

29         challenging a determination made by the

30         division with respect to enforcing the act;

31         requiring that the division update the list of

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    Florida Senate - 2002                           CS for SB 2140
    315-2131-02




  1         approved cigarettes; providing for sharing

  2         information; providing for confidentiality;

  3         providing an effective date.

  4

  5  Be It Enacted by the Legislature of the State of Florida:

  6

  7         Section 1.  Part III of chapter 210, Florida Statutes,

  8  consisting of sections 210.81, 210.82, 210.83, 210.84, 210.85,

  9  210.86, 210.87, 210.88, 210.89, 210.90, and 210.91, Florida

10  Statutes, is created to read:

11         210.81  Short title.--This part may be cited as "The

12  Tobacco Settlement Protection Act."

13         210.82  Purpose.--The purpose of this part is to

14  protect Florida's payments under its settlements with various

15  cigarette manufacturers.

16         210.83  Definitions.--As used in this part, the term:

17         (1)  "Cigarette" means a cigarette as defined in s.

18  210.01, and includes roll-your-own tobacco. For purposes of

19  this subsection, 0.09 ounces of roll-your-own tobacco

20  constitutes one individual cigarette.

21         (2)  "Division" means the Division of Alcoholic

22  Beverages and Tobacco of the Department of Business and

23  Professional Regulation.

24         (3)  "Licensee" means any person who holds a license as

25  a distributor under part II.

26         (4)  "Master Settlement Agreement" means the settlement

27  agreement and related documents entered into on November 23,

28  1998, by the MSA states and certain tobacco product

29  manufacturers, and includes any amendments thereto.

30         (5)  "MSA state" means a settling state as defined in

31  section II(qq) of the Master Settlement Agreement.

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    Florida Senate - 2002                           CS for SB 2140
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  1         (6)  "MSA Statute" means the statute enacted by an MSA

  2  state to implement Exhibit T to the Master Settlement

  3  Agreement.

  4         (7)  "Participating manufacturer" means a participating

  5  manufacturer as that term is defined in section II(jj) of the

  6  Master Settlement Agreement and any amendments thereto.

  7         (8)  "Permittee" means a person who holds a permit as a

  8  wholesale dealer, distributing agent, or exporter under part

  9  I.

10         (9)  "Tobacco product manufacturer" means a tobacco

11  product manufacturer as that term is defined in section II(uu)

12  of the Master Settlement Agreement.

13         210.84  Prohibition.--It is unlawful for a permittee or

14  licensee to ship, sell, or deliver to any person in this state

15  or another state cigarettes belonging to a brand family not

16  included on the list prepared by the division under s. 210.85,

17  or to possess those cigarettes for shipment, delivery, or

18  sale.

19         210.85  List of approved cigarettes.--The division

20  shall annually prepare, and by June 1 of each year shall

21  transmit to all permittees and licensees and post on the

22  website of the division, a list of all brand families

23  manufactured for sale to consumers within the United States

24  by:

25         (1)  Each tobacco product manufacturer that has

26  provided the division, by May 1 of the year in question or

27  previously, a certification, under penalty of perjury, that it

28  is a participating manufacturer, and the names of all brand

29  families made or sold by the manufacturer; and

30         (2)  Each tobacco product manufacturer that has

31  provided the division, by May 1 of the year in question, the

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    Florida Senate - 2002                           CS for SB 2140
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  1  certification described in s. 210.86 which the division has

  2  approved under that section, and the names of all brand

  3  families made or sold by the manufacturer.

  4         210.86  Certification by certain manufacturers.--

  5         (1)  CERTIFICATION.--A tobacco product manufacturer

  6  that is not a participating manufacturer shall, as a condition

  7  of inclusion in the list prepared under s. 210.85, certify to

  8  the division, by May 1 of the year in question, under penalty

  9  of perjury, that the manufacturer will in good faith make all

10  escrow payments required by the MSA Statute of each MSA state

11  for sales of its cigarettes during the current calendar year,

12  and that the manufacturer has made in good faith all escrow

13  payments required by the MSA Statute of each MSA state for

14  sales of its cigarettes during the preceding calendar year.

15  The manufacturer shall furnish the information that the

16  division requires to determine whether the certification is

17  true and correct. For purposes of the certification described

18  in this subsection, a tobacco product manufacturer is

19  considered to have made in good faith all escrow payments

20  required by the escrow statute of an MSA state if the escrow

21  payments made by the manufacturer accord with:

22         (a)  The MSA state's finding of the number of units of

23  the manufacturer's cigarettes that were sold in the state

24  during the year in question as measured by excise taxes

25  collected by the MSA state with respect to all such

26  cigarettes; 

27         (b)  An agreement between the tobacco product

28  manufacturer and the MSA state with respect to the

29  manufacturer's obligations under the MSA Statute of the MSA

30  state; or

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    Florida Senate - 2002                           CS for SB 2140
    315-2131-02




  1         (c)  An order of a court of competent jurisdiction

  2  regarding the manufacturer's escrow payment obligation under

  3  the MSA Statute of the MSA state.

  4         (2)  APPROVAL.--The division shall approve the

  5  certification of a tobacco product manufacturer under

  6  subsection (1) if each MSA state confirms in writing to the

  7  division the validity of the certification made by the tobacco

  8  product manufacturer.

  9         (3)  NOTICE OF DETERMINATION.--The division shall

10  promptly notify the manufacturer and the Attorney General of

11  any approval or rejection made under subsection (1). Before

12  the filing of any action by either party in court or the

13  modification of the list under s. 210.85 or s. 210.90, the

14  parties shall work in good faith for 15 business days from the

15  date of the manufacturer's receipt of a notice of a rejection

16  of the certification in order to resolve any issues causing

17  the Attorney General to reject the certification.

18         (4)  DEFINITION.--As used in this section, references

19  to cigarettes "sold to consumers within" a state include any

20  cigarettes sold to consumers within the state, whether sold by

21  the manufacturer directly or by a distributor, retailer, or

22  similar intermediary.

23         210.87  Reports.--Each permittee and licensee shall

24  report to the division all shipments, deliveries, and sales of

25  cigarettes to persons in this state and other states during

26  the preceding calendar quarter. The report must state, by

27  manufacturer and brand family, the quantity of cigarettes

28  shipped, delivered, or sold to persons in each state.

29         210.88  Administrative penalties and injunctive

30  relief.--

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    Florida Senate - 2002                           CS for SB 2140
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  1         (1)  PENALTIES.--Upon a finding of a violation of s.

  2  210.84 by a permittee or licensee, the division may impose

  3  upon the permittee or licensee a civil penalty in an amount

  4  not to exceed the greater of 500 percent of the retail value

  5  of the cigarettes shipped in violation of s. 210.84 or $5,000.

  6  Upon a finding of a second or subsequent violation by a

  7  permittee or licensee of s. 210.84, the division may suspend

  8  or revoke the license of the licensee or the permit of the

  9  permittee.

10         (2)  INJUNCTIONS.--The Attorney General, on behalf of

11  the division, may seek an injunction to restrain a permittee

12  or licensee from shipping cigarettes in violation of s. 210.84

13  or to compel a permittee or licensee to submit the information

14  required by s. 210.87.

15         (3)  ACTIONS AGAINST MANUFACTURERS.--Based on credible

16  information provided by authorities in an MSA state or other

17  credible information, the Attorney General shall bring an

18  action in circuit court against a tobacco product manufacturer

19  for filing a false certification under of s. 210.86. Upon a

20  finding that the manufacturer has filed a false certification,

21  the court shall issue a permanent injunction prohibiting the

22  manufacturer from selling cigarettes, directly or through a

23  distributor or other intermediary or intermediaries, to

24  permittees and licensees within the state for a period not to

25  exceed 2 years.

26         210.89  Review of division's determination.--Before the

27  division may exclude or remove from the list described in s.

28  210.85 the brand families of a tobacco product, the division

29  must comply with s. 210.86(3). After the expiration of the

30  15-day period specified in s. 210.86(3), a tobacco product

31  manufacturer may challenge the division's rejection of a

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    Florida Senate - 2002                           CS for SB 2140
    315-2131-02




  1  certification as erroneous and seek relief by bringing an

  2  action in the appellate district where the division maintains

  3  its headquarters or where a party resides or as otherwise

  4  provided by law to challenge the division's determination.

  5  Upon the filing of an action, the division's determination

  6  shall be stayed for 10 days. The court may extend the stay

  7  upon a showing by the manufacturer, after notice to the

  8  division, that it has a substantial probability of success in

  9  the action and would suffer irreparable injury in the absence

10  of a stay.

11         210.90  Additional authority.--

12         (1)  REVISION OF LIST.--The division shall update as

13  necessary, but no less often than monthly, the list described

14  in s. 210.85 in order to correct mistakes; to remove brand

15  families, including brand families of tobacco product

16  manufacturers that have failed to make escrow payments

17  required by the MSA Statute of an MSA state; to restore brand

18  families of tobacco product manufacturers that have corrected

19  such failures; and to add new brand families of tobacco

20  product manufacturers otherwise qualifying for inclusion.

21         (2)  INFORMATION SHARING.--The division and Attorney

22  General may share with each other and with other authorities

23  information they receive under this part, and may combine that

24  information with information received from authorities in

25  other states for purposes of analysis and enforcement.

26         Section 2.  This act shall take effect upon becoming a

27  law.

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    Florida Senate - 2002                           CS for SB 2140
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  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                             SB 2140

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  4  The Committee Substitute deletes provisions on legislative
    intent and purpose, audits, applications for permits, and due
  5  dates of initial reports and certifications.

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