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.
   32  Be It Enacted by the Legislature of the State of Florida:
   34         Section 1. Section 210.23, Florida Statutes, is created to
   35  read:
   36         210.23Nonsettling 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.
  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.