Florida Senate - 2013 SB 252 By Senator Altman 16-00204-13 2013252__ 1 A bill to be entitled 2 An act relating to cigarette products of nonsettling 3 manufacturers; creating s. 210.23, F.S.; providing the 4 purpose of the act; creating s. 210.232, F.S.; 5 defining terms; creating s. 210.234, F.S.; imposing a 6 fee on the sale, receipt, purchase, possession, 7 consumption, handling, distribution, and use of 8 nonsettling manufacturer cigarettes that are required 9 to have a stamp affixed or stamp insignia applied to 10 the package of cigarettes on which tax is otherwise 11 required to be paid; providing that the fee imposed is 12 in addition to any other privilege, license, fee, or 13 tax required or imposed by state law; prescribing 14 methods to affix a stamp or insignia to the tobacco 15 products; creating s. 210.236, F.S.; providing the fee 16 rate for nonsettling manufacturers; creating s. 17 210.238, F.S.; requiring the Division of Alcoholic 18 Beverages and Tobacco of the Department of Business 19 and Professional Regulation to post a directory 20 listing of all settling manufacturers that have 21 provided accurate certifications of their products in 22 order to calculate their payments under the tobacco 23 settlement agreement for the relevant year on the 24 Internet website of the division; providing that any 25 cigarette of a brand family not on the directory list 26 be presumptively considered a nonsettling manufacturer 27 product; creating s. 210.240, F.S.; requiring each 28 dealer, agent, and distributing agent to file a 29 report; requiring the report to include certain 30 specified information; creating s. 210.245, F.S.; 31 providing penalties for a nonsettling manufacturer 32 that fails to pay the mandated fees; creating s. 33 210.246, F.S.; providing for application of the act; 34 creating s. 210.248, F.S.; authorizing the division to 35 adopt rules; creating s. 210.249, F.S.; providing 36 conditions for imposing the fee on subsequent 37 participating manufacturers who already make payments 38 on Florida sales of cigarettes pursuant to the master 39 settlement agreement; defining terms; providing an 40 effective date. 41 42 Be It Enacted by the Legislature of the State of Florida: 43 44 Section 1. Section 210.23, Florida Statutes, is created to 45 read: 46 210.23 Purpose.—The purpose of ss. 210.23-210.249 is to: 47 (1) Prevent nonsettling manufacturers from undermining this 48 state’s policy of discouraging underage smoking by offering 49 cigarettes and cigarette tobacco products at prices that are 50 substantially below the prices of cigarettes of other 51 manufacturers. 52 (2) Protect the tobacco settlement agreement and its 53 funding, which has been reduced because of the growth of sales 54 of nonsettling manufacturer cigarettes, by recouping for this 55 state revenue that is lost because of sales of cigarettes by 56 nonsettling manufacturers of cigarettes. 57 (3) Provide funding to enforce and administer any 58 legislation relating to nonsettling manufacturers. 59 (4) Provide funding for any other purpose the Legislature 60 determines. 61 Section 2. Section 210.232, Florida Statutes, is created to 62 read: 63 210.232 Definitions.—As used in ss. 210.23-210.249, the 64 term: 65 (1) “Agent” has the same meaning as in s. 210.01. 66 (2) “Brand family” means each style of cigarettes sold 67 under a common brand name, trademark, logo, symbol, motto, 68 selling message, recognizable pattern of colors, or other 69 indication of production identification. 70 (3) “Cigarette” has the same meaning as in s. 210.01. 71 (4) “Dealer” has the same meaning as in s. 210.01(5) and 72 (6). 73 (5) “Distributing agent” has the same meaning as in s. 74 210.01. 75 (6) “Distributor” has the same meaning as in s. 210.25. 76 (7) “Division” has the same meaning as in s. 210.01. 77 (8) “Manufacturer” means a person who manufactures, 78 fabricates, or assembles cigarettes or cigarette tobacco 79 products for sale or distribution. For purposes of ss. 210.23 80 210.249, the term includes a person who is the first importer 81 into the United States of cigarettes manufactured outside the 82 United States. 83 (9) “Nonsettling manufacturer” means a manufacturer of 84 cigarettes which is not a settling manufacturer. 85 (10) “Nonsettling manufacturer cigarettes” means cigarettes 86 that are not manufactured by a settling manufacturer. 87 (11) “Settling manufacturer” means a manufacturer of 88 cigarettes which: 89 (a) Signed one of the tobacco settlement agreements before 90 July 1, 2008; or 91 (b) Has voluntarily entered into an agreement with this 92 state, approved by the division, agreeing to terms similar to 93 those contained in the tobacco settlement agreement described in 94 paragraph (13)(a), including making annual payments to the state 95 with respect to the sale, receipt, purchase, possession, 96 consumption, handling, distribution, and use in this state of 97 its cigarettes equal to at least the amount of the fee that 98 would have been due on such cigarettes under ss. 210.23-210.249 99 for the relevant year if the manufacturer were a nonsettling 100 manufacturer. 101 (12) “Settling manufacturer cigarettes” means cigarettes of 102 a brand family that a settling manufacturer certifies under s. 103 210.238 is to be deemed its brand family for purposes of 104 calculating that settling manufacturer’s payments under the 105 tobacco settlement agreement or other agreement described in 106 paragraph (11)(b) for the relevant year, including for purposes 107 of calculating any payment obligations of that settling 108 manufacturer under that agreement, or any other cigarettes that 109 are included in calculating payments due to be made by a 110 settling manufacturer under the tobacco settlement agreement 111 described in paragraph (13)(a) or other agreement described in 112 paragraph (11)(b). 113 (13) “Tobacco settlement agreement” means: 114 (a) The settlement agreement entered into on August 25, 115 1997, in settlement of State of Florida v. American Tobacco Co., 116 No. 95-1466AH (Fla. 15th Cir. Ct. 1996), and under which the 117 settling manufacturer undertook payment obligations to the 118 state; or 119 (b) The settlement agreement entered into on March 15, 120 1996, in settlement of State of Florida v. American Tobacco Co., 121 No. 95-1466AH (Fla. 15th Cir. Ct. 1996). 122 Section 3. Section 210.234, Florida Statutes, is created to 123 read: 124 210.234 Fee imposed.— 125 (1) A fee is imposed on the sale, receipt, purchase, 126 possession, consumption, handling, distribution, and use in this 127 state of nonsettling manufacturer cigarettes that are required 128 to have a stamp affixed or stamp insignia applied to a package 129 of those cigarettes under this chapter or on which tax is 130 otherwise required to be paid under this chapter. 131 (2) The fee imposed by this section does not apply to 132 cigarettes made by a settling manufacturer. 133 (3) The fee imposed by this section is in addition to any 134 other privilege, license, fee, or tax required or imposed by 135 state law. 136 (4) The fee imposed by ss. 210.23-210.249 shall be 137 collected from distributors, dealers, agents, and distributing 138 agents of nonsettling manufacturer cigarettes or from other 139 persons or entities from whom the tax imposed by this chapter on 140 such nonsettling manufacturer cigarettes may be collected under 141 this chapter and in the manner provided by this chapter. The 142 provisions of ss. 210.01, 210.02, 210.021, 210.03, 210.04, 143 210.05, 210.06, 210.07, 210.08, 210.09, 210.10, 210.11, 210.12, 144 210.13, 210.14, 210.15, 210.16, 210.161, 210.18, 210.181, 145 210.19, 210.20, 210.22, 210.25, 210.30, 210.31, 210.35, 210.40, 146 210.50, 210.55, 210.60, 210.65, 210.67, 210.70, and 210.75, so 147 far as lawful or practicable, apply to the fee imposed by ss. 148 210.23-210.249 and to the collection thereof as if fully set out 149 in ss. 210.23-210.249. However, any one or more sections may not 150 apply to the extent the section conflicts with ss. 210.23 151 210.249. 152 (5) With respect to nonsettling manufacturer cigarettes, 153 the division shall prescribe, prepare, and furnish stamps of 154 such denominations and quantities as may be necessary for the 155 payment of the fee imposed by ss. 210.23-210.249, and may also 156 permit the fee to be paid through the use of a stamp insignia to 157 be applied by metering machines. Such stamps or stamp insignia 158 are required and shall be sold, affixed, and administered in the 159 same manner as the stamps and stamp insignia that are 160 prescribed, prepared, and furnished for the taxes imposed 161 pursuant to other provisions of this chapter. The division may 162 prescribe that payment of the fee imposed by ss. 210.23-210.249 163 and the tax imposed by s. 210.30 shall be by way of a single 164 stamp or stamp insignia whose value shall be the combined value 165 of such fee and tax, and which shall be identifiable with such 166 markings or colorings as may be necessary to distinguish the 167 stamp or stamp insignia from the stamp or insignia used on 168 cigarette packages not subject to the fee imposed by ss. 210.23 169 210.249. 170 Section 4. Section 210.236, Florida Statutes, is created to 171 read: 172 210.236 Rate of fee.—A fee is imposed at the rate of 2.6 173 cents for each nonsettling manufacturer cigarette. 174 Section 5. Section 210.238, Florida Statutes, is created to 175 read: 176 210.238 Settling manufacturer certification and list.— 177 (1) By July 1, 2013, and annually thereafter not later than 178 the 30th day of April in each year, each settling manufacturer 179 shall certify to the Attorney General, on a form prescribed by 180 the Attorney General, the names of the brand families that are 181 to be deemed its cigarettes for purposes of its tobacco 182 settlement agreement or other agreement described in s. 183 210.232(11)(b) for the relevant year, including for purposes of 184 calculating any payment obligations of that settling 185 manufacturer under that agreement in the volume and shares 186 determined under the agreement. A settling manufacturer may not 187 include a brand family in such certification if it does not deem 188 sales of cigarettes of that brand family in this state to be its 189 cigarettes for purposes of the master settlement agreement 190 between 52 states and territories and participating cigarette 191 manufacturers. Each settling manufacturer shall update such 192 information in the event of any change within 30 calendar days 193 after the date of the change. 194 (2) By July 15, 2013, the division shall develop, maintain, 195 and publish on its Internet website a directory listing of all 196 settling manufacturers that have provided accurate 197 certifications under subsection (1). The directory shall list 198 the brand families of such settling manufacturers included in 199 such certifications. The division shall update the directory as 200 necessary in order to add or remove a manufacturer or brand 201 family and keep the directory in conformity with the 202 requirements of ss. 210.23-210.249. 203 (3) The division shall provide the list to each dealer, 204 agent, or distributing agent authorized to affix stamps under 205 this chapter, to each distributor, and to any other person upon 206 request. 207 (4) Cigarettes of a brand family that is not on the 208 directory list shall be presumptively considered nonsettling 209 manufacturer cigarettes to which the fee imposed by ss. 210.23 210 210.249 applies. 211 Section 6. Section 210.240, Florida Statutes, is created to 212 read: 213 210.240 Reports.— 214 (1) Each dealer, agent, and distributing agent required to 215 file a report under s. 210.05 or s. 210.09, and each distributor 216 required to file a return under s. 210.55 or s. 210.60, shall, 217 in addition to the information required by those sections, 218 include in that required report or return each month, as 219 appropriate: 220 (a) The number of individual nonsettling manufacturer 221 cigarettes in packages on which the dealer, agent, distributing 222 agent, or distributor affixed or was required to affix a stamp 223 or stamp insignia by the use of a metering machine during the 224 preceding month; 225 (b) The amount of the fee imposed by ss. 210.23-210.249 226 paid on cigarettes described in paragraph (a); and 227 (c) Any other information that the division considers 228 necessary or appropriate to determine the amount of the fee 229 imposed by ss. 210.23-210.249, to enforce ss. 210.23-210.249, or 230 to provide the reports showing fees paid for nonsettling 231 manufacturer cigarettes as required by s. 210.234. 232 (2) The information required under subsection (1) must be 233 itemized for each place of business and by manufacturer and 234 brand family. 235 (3) The requirement to report information under this 236 section shall be enforced in the same manner as the requirement 237 to deliver to or file with the division a report or return 238 required under this chapter. 239 Section 7. Section 210.245, Florida Statutes, is created to 240 read: 241 210.245 Penalties for noncompliance.—Nonsettling 242 manufacturer cigarettes subject to any fee imposed by ss. 243 210.23-210.249, but upon which the fee has not been paid, shall 244 be treated as cigarettes for which the tax assessed by this 245 chapter has not been paid, and all persons selling, receiving, 246 purchasing, possessing, consuming, handling, distributing, or 247 using such cigarettes are subject to all penalties imposed by 248 this chapter for violations of this chapter. 249 Section 8. Section 210.246, Florida Statutes, is created to 250 read: 251 210.246 Application.—Sections 210.23-210.249 apply without 252 regard to s. 210.06(5) or any other law that might be read to 253 create an exemption for interstate sales. 254 Section 9. Section 210.248, Florida Statutes, is created to 255 read: 256 210.248 General powers of the Division of Alcoholic 257 Beverages and Tobacco.—The Division of Alcoholic Beverages and 258 Tobacco may adopt rules to administer ss. 210.23-210.249, 259 including rules that address the imposition, collection, and 260 enforcement of the fees and required reporting. 261 Section 10. Section 210.249, Florida Statutes, is created 262 to read: 263 210.249 Exemption for subsequent participating 264 manufacturers.—The fee imposed by ss. 210.23-210.249 does not 265 apply to cigarettes of any subsequent participating 266 manufacturer, as defined in the Master Settlement Agreement, 267 which would otherwise be required to pay the fee under ss. 268 210.23-210.249 until the effective date of a credit amendment to 269 the Master Settlement Agreement, and such cigarettes shall be 270 treated as settling manufacturer cigarettes until such time. For 271 purposes of ss. 210.23-210.249, the term “Master Settlement 272 Agreement” means the settlement agreement entered into on 273 November 23, 1998, by the settling states and the participating 274 manufacturers, as defined in that agreement, as amended to date. 275 For purposes of ss. 210.23-210.249, the term “credit amendment” 276 means an amendment to the Master Settlement Agreement which 277 offers a credit to subsequent participating manufacturers for 278 amounts paid under that agreement with respect to their products 279 in a form agreed upon by: 280 (1) The settling states, as defined in the Master 281 Settlement Agreement, with aggregate allocable shares, as 282 defined in the Master Settlement Agreement, equal to at least 283 99.937049 percent; 284 (2) The original participating manufacturers, as defined in 285 the Master Settlement Agreement; and 286 (3) The subsequent participating manufacturers who would 287 otherwise be required to pay the fee under ss. 210.23-210.249 288 whose aggregate market share, expressed as a percentage of the 289 total number of individual cigarettes sold in the 50 states, the 290 District of Columbia, and Puerto Rico, during the calendar year 291 at issue, as measured by excise taxes collected by the Federal 292 Government and, in the case of cigarettes sold in Puerto Rico, 293 by “arbitrios de cigarillos” collected by the Puerto Rico taxing 294 authority, is greater than 3.75 percent. For purposes of 295 calculating subsequent participating manufacturer share under 296 ss. 210.23-210.249, 0.09 ounces of “roll your own” tobacco 297 constitutes one individual cigarette. 298 Section 11. This act shall take effect July 1, 2013.