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S1297......................................................by STATE AFFAIRS
CIGARETTES - MASTER SETTLEMENT AGREEMENT - Adds to existing law to require
cigarette distributors and stamping agents to only stamp and distribute
cigarettes of those tobacco product manufacturers that are in compliance
with Idaho's Master Settlement Agreement Act; to provide procedures; to
provide duties of the Attorney General; and to provide for agreements for
exchange of information.
01/17 Senate intro - 1st rdg - to printing
01/18 Rpt prt - to St Aff
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1297
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO TOBACCO MASTER SETTLEMENT AGREEMENT ACT; PROVIDING LEG-
3 ISLATIVE INTENT; AND AMENDING CHAPTER 78, TITLE 39, IDAHO CODE, BY THE
4 ADDITION OF A NEW SECTION 39-7804, IDAHO CODE, TO REQUIRE CIGARETTE DIS-
5 TRIBUTORS AND STAMPING AGENTS TO ONLY STAMP AND DISTRIBUTE CIGARETTES OF
6 THOSE TOBACCO PRODUCT MANUFACTURERS THAT ARE IN COMPLIANCE WITH IDAHO'S
7 MASTER SETTLEMENT AGREEMENT ACT, TO PROVIDE PROCEDURES, TO PROVIDE DUTIES
8 OF THE ATTORNEY GENERAL, TO DEFINE A TERM AND TO PROVIDE FOR AGREEMENTS
9 FOR EXCHANGE OF INFORMATION.
10 Be It Enacted by the Legislature of the State of Idaho:
11 SECTION 1. LEGISLATIVE INTENT. The Legislature finds that a number of
12 tobacco product manufacturers are not complying with the provisions of Idaho's
13 Master Settlement Agreement Act. Compliance with that Act is in the interest
14 of the state. Requiring cigarette distributors and stamping agents to only
15 stamp and distribute cigarettes of tobacco product manufacturers that are in
16 compliance with Idaho's Master Settlement Agreement Act will significantly
17 improve compliance under the Act.
18 SECTION 2. That Chapter 78, Title 39, Idaho Code, be, and the same is
19 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
20 ignated as Section 39-7804, Idaho Code, and to read as follows:
21 39-7804. CIGARETTE DISTRIBUTOR AND STAMPING AGENT DUTIES. (a) A cigarette
22 distributor or any other stamping agent may not affix, or cause to be affixed,
23 stamps to individual packages of cigarettes sold or distributed by the ciga-
24 rette distributor or stamping agent in this state if the tobacco product manu-
25 facturer of those cigarettes has:
26 (1) Failed to become a participating manufacturer pursuant to section
27 39-7803(a), Idaho Code; and
28 (2) Failed to create and timely fund a qualified escrow fund pursuant to
29 section 39-7803(b), Idaho Code.
30 (b) The attorney general shall maintain a list, available for public
31 inspection, for tobacco product manufacturers that have become a participating
32 manufacturer or have created and timely funded a qualified escrow fund. A cig-
33 arette distributor or stamping agent may rely upon the attorney general's list
34 in affixing or causing to be affixed stamps to individual packages of ciga-
35 rettes of tobacco product manufacturers. A cigarette distributor or stamping
36 agent who only affixes, or causes to be affixed, stamps to cigarettes of those
37 tobacco product manufacturers listed on the attorney general's list, as of the
38 date the stamps were affixed, shall not be found liable under this section
39 even if it is later established that the tobacco product manufacturer failed
40 either to become a participating manufacturer or to create and timely fund a
41 qualified escrow fund, as required by section 39-7803(a) and (b), Idaho Code.
42 (c) The attorney general may bring a civil action on behalf of the state
2
1 against any cigarette distributor or stamping agent who violates this section.
2 Any cigarette distributor or stamping agent who violates this section shall be
3 subject to the same liability provisions that a tobacco products manufacturer
4 faces for violating this chapter pursuant to section 39-7803(b)(3), Idaho
5 Code. In addition, in any action brought under this section, the court shall
6 award the attorney general, if he is the prevailing party, reasonable costs,
7 expenses and attorney's fees in bringing his action.
8 (d) For purposes of this section, "cigarette distributor" shall mean
9 every person who is a wholesaler, as that term is defined in section
10 63-2502(a), Idaho Code, and has obtained a permit from the state tax commis-
11 sion, pursuant to section 63-2503, Idaho Code. "Stamping agent" shall mean
12 every person who affixes or causes to be affixed stamps to individual packages
13 of cigarettes.
14 (e) The state tax commission and the attorney general may enter into a
15 written agreement authorizing the exchange of information reasonably necessary
16 to the enforcement and administration of this chapter.
STATEMENT OF PURPOSE
RS 11507C2
This proposed legislation amends Idaho’s Tobacco Master
Settlement Agreement Act (“the Act”) . Under the Idaho’s
Master Settlement Agreement with the tobacco industry, Idaho
must diligently enforce the Act. A number of tobacco product
manufacturers are not complying with the provisions of the
Act. All of the non-compliant manufacturers are located in
foreign countries. Effecting compliance is in some cases
quite difficult because of their location. Requiring
cigarette distributors to only stamp and distribute cigarettes
of tobacco product manufacturers that are in compliance with
the Act will significantly improve compliance under the Act
and assist Idaho with its duty of diligent enforcement of the
Act.
FISCAL IMPACT
There is no fiscal impact to the general fund. In fact,
enactment of this bill should save the State money in its
enforcement duties under the Act.
CONTACTS
Name: Steve Tobiason, Phone:334-4151
Name: Brett Delange, Phone: 334-2424
Agency: Office of The Attorney General
Statement of Purpose/Fiscal Impact S 1297