View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0046......................................................by STATE AFFAIRS MASTER SETTLEMENT AGREEMENT - Amends existing law to provide that for an unstamped "roll-your-own" tobacco container, each nine one-hundredths ounce of "roll-your-own" tobacco shall equal one unit sold for purposes of the Idaho Tobacco Master Settlement Agreement. 01/25 House intro - 1st rdg - to printing 01/26 Rpt prt - to St Aff 02/03 Rpt out - rec d/p - to 2nd rdg 02/04 2nd rdg - to 3rd rdg 02/07 3rd rdg - PASSED - 64-2-4 AYES -- Anderson, Andrus, Barraclough, Bastian, Bayer, Bell, Bilbao, Black, Block, Boe, Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Henderson, Jaquet, Jones, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin, Miller, Mitchell, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Wood, Mr. Speaker NAYS -- Barrett, McKague Absent and excused -- Bedke, Bolz, Bradford, Moyle Floor Sponsor - Ring Title apvd - to Senate 02/08 Senate intro - 1st rdg - to St Aff 02/23 Rpt out - rec d/p - to 2nd rdg 02/24 2nd rdg - to 3rd rdg 03/01 3rd rdg - PASSED - 31-0-4 AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett, Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Noble, Schroeder, Stegner, Werk, Williams NAYS -- None Absent and excused -- Pearce, Richardson, Stennett, Sweet Floor Sponsor - Darrington Title apvd - to House 03/02 To enrol 03/03 Rpt enrol - Sp signed 03/04 Pres signed 03/07 To Governor 03/11 Governor signed Session Law Chapter 39 Effective: 07/01/05
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 46 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO THE IDAHO TOBACCO MASTER SETTLEMENT AGREEMENT ACT; AMENDING SEC- 3 TION 39-7802, IDAHO CODE, TO FURTHER DEFINE THE TERM "UNITS SOLD" AND TO 4 MAKE A TECHNICAL CORRECTION. 5 Be It Enacted by the Legislature of the State of Idaho: 6 SECTION 1. That Section 39-7802, Idaho Code, be, and the same is hereby 7 amended to read as follows: 8 39-7802. DEFINITIONS. (a) "Adjusted for inflation" means increased in 9 accordance with the formula for inflation adjustment set forth in Exhibit C to 10 the Master Settlement Agreement. 11 (b) "Affiliate" means a person who directly or indirectly owns or con- 12 trols, is owned or controlled by, or is under common ownership or control 13 with, another person. Solely for purposes of this definition, the terms 14 "owns," "is owned" and "ownership" mean ownership of an equity interest, or 15 the equivalent thereof, of ten percent (10%) or more, and the term "person" 16 means an individual, partnership, committee, association, corporation or any 17 other organization or group of persons. 18 (c) "Allocable share" means allocable share as that term is defined in 19 the Master Settlement Agreement. 20 (d) "Cigarette" means any product that contains nicotine, is intended to 21 be burned or heated under ordinary conditions of use, and consists of or con- 22 tains: (1) any roll of tobacco wrapped in paper or in any substance not con- 23 taining tobacco; or (2) tobacco, in any form, that is functional in the prod- 24 uct, which, because of its appearance, the type of tobacco used in the filler, 25 or its packaging and labeling, is likely to be offered to, or purchased by, 26 consumers as a cigarette; or (3) any roll of tobacco wrapped in any substance 27 containing tobacco which, because of its appearance, the type of tobacco used 28 in the filler, or its packaging and labeling, is likely to be offered to, or 29 purchased by, consumers as a cigarette described in clause (1) of this defini- 30 tion. The term "cigarette" includes "roll-your-own" (i.e., any tobacco which, 31 because of its appearance, type, packaging, or labeling is suitable for use 32 and likely to be offered to, or purchased by, consumers as tobacco for making 33 cigarettes). For purposes of this definition of "cigarette," nine one-hun- 34 dredths (0.09) ounces of "roll-your-own" tobacco shall constitute one (1) 35 individual "cigarette." 36 (e) "Master Settlement Agreement" means the settlement agreement (and 37 related documents) entered into on November 23, 1998, by the state and leading 38 United States tobacco product manufacturers. 39 (f) "Qualified escrow fund" means an escrow arrangement with a federally 40 or state-chartered financial institution having no affiliation with any 41 tobacco product manufacturer and having assets of at least one billion dollars 42 ($1,000,000,000) where such arrangement requires that such financial institu- 43 tion hold the escrowed funds' principal for the benefit of releasing parties 2 1 and prohibits the tobacco product manufacturer placing the funds into escrow 2 from using, accessing or directing the use of the funds' principal except as 3 consistent with section 39-7803, Idaho Code. 4 (g) "Released claims" means released claims as that term is defined in 5 the Master Settlement Agreement. 6 (h) "Releasing parties" means releasing parties as that term is defined 7 in the Master Settlement Agreement. 8 (i) "Tobacco product manufacturer" means an entity that after the date of 9 enactment of this act directly (and not exclusively through any affiliate): 10 (1) Manufactures cigarettes anywhere that such manufacturer intends to be 11 sold in the United States, including cigarettes intended to be sold in the 12 United States through an importer (except where such importer is an origi- 13 nal participating manufacturer (as that term is defined in the Master Set- 14 tlement Agreement) that will be responsible for the payments under the 15 Master Settlement Agreement with respect to such cigarettes as a result of 16 the provisions of subsections II(mm) of the Master Settlement Agreement 17 and that pays the taxes specified in subsection II(z) of the Master Set- 18 tlement Agreement, and provided that the manufacturer of such cigarettes 19 does not market or advertise such cigarettes in the United States); 20 (2) Is the first purchaser anywhere for resale in the United States of 21 cigarettes manufactured anywhere that the manufacturer does not intend to 22 be sold in the United States; or 23 (3) Becomes a successor of an entity described in paragraph (1) or (2) of 24 this subsection. 25 The term "tobacco product manufacturer" shall not include an affiliate of a 26 tobacco product manufacturer unless such affiliate itself falls within any of 27 paragraphs (1) through (3) of this subsection. 28 (j) "Units sold" means the number of individual cigarettes sold in the 29 state by the applicable tobacco product manufacturer (whether directly or 30 through a distributor, retailer or similar intermediary or intermediaries) 31 during the year in question, as measured by excise taxes collected by the 32 state on packs (or "roll-your-own" tobacco containers) bearing the excise tax 33 stamp of the state or on unstamped "roll-your-own" tobacco containers, with 34 each nine one-hundredths (0.09) ounces of "roll-your-own" tobacco equaling one 35 (1) unit sold. The state tax commission shall promulgate such rules as are 36 necessary to ascertain the amount of state excise tax paid on the cigarettes 37 of such tobacco product manufacturer for each year.
STATEMENT OF PURPOSE RS 14537 This proposed legislation clarifies that .09 ounces of "roll-your- own" tobacco ("RYO") is a "unit sold" under Idaho's Tobacco Master Settlement Agreement Act ("the Act"). The Act requires tobacco product manufacturers that have not joined what is called the Master Settlement Agreement ("MSA") to establish an escrow account and make deposits into escrow based upon their "units sold" in Idaho. (The MSA being referred to is the settlement that was entered into on November 23, 1998 between the State and leading United States tobacco product manufacturers). The Act defines "units sold," in part, as the number of cigarettes sold in Idaho "as measured by excise taxes collected by the state on packs (or 'roll-your-own' tobacco containers) bearing the excise tax stamp of the state." Idaho Code 39-7802(j) (emphasis added). A number of tobacco product manufacturers that have not joined the MSA argue that no escrow needs to be deposited for RYO sold in Idaho because it is not a "unit sold." They contend that because Idaho taxes RYO differently from cigarettes and does not require an excise tax stamp to be affixed to RYO containers, it is not a "unit sold." The result is that some manufacturers that have not joined the MSA are not depositing into escrow based upon sales of RYO in Idaho. This directly undercuts the purposes for which the Act was passed in 1999 and puts tobacco product manufacturers that have joined the MSA at an unfair disadvantage, because they are paying the State based upon sales of RYO sold in Idaho. FISCAL NOTE There is no fiscal impact to the general fund. Contact Name: Brett DeLange, Office of the Attorney General Phone: 208-334-4114 Name: William von Tagen, Office of the Attorney General Phone: 208-334-4140 STATEMENT OF PURPOSE/FISCAL NOTE H 46