HF 875

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; imposing a cigarette cost
mitigation fee; repealing the health care provider
tax; amending Minnesota Statutes 2004, sections
13.4963, subdivision 2; 62J.041, subdivision 1;
62Q.095, subdivision 6; 214.16, subdivisions 2, 3;
270B.14, subdivision 1; 325D.32, subdivision 9;
proposing coding for new law in Minnesota Statutes,
chapter 62J; repealing Minnesota Statutes 2004,
sections 13.4967, subdivision 3; 295.50; 295.51;
295.52; 295.53; 295.54; 295.55; 295.56; 295.57;
295.58; 295.581; 295.582; 295.59.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 13.4963,
subdivision 2, is amended to read:

Subd. 2.

Generally.

Classification and disclosure of tax
data created, collected, or maintained by the Department of
Revenue under chapter 115B, 289A (except for taxes imposed under
sections 298.01, 298.015, and 298.24), 290, 290A, 291, deleted text begin 295,
deleted text end 297A, or 297H, or any similar Indian tribal tax administered by
the commissioner according to a tax agreement between the state
and an Indian tribal government are governed by chapter 270B.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 2.

Minnesota Statutes 2004, section 62J.041,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this
section, the following definitions apply.

(b) "Health plan company" has the definition provided in
section 62Q.01.

(c) "Total expenditures" means incurred claims or
expenditures on health care services, administrative expenses,
charitable contributions, and all other payments made by health
plan companies out of premium revenues.

(d) "Net expenditures" means total expenditures minus
exempted taxes and assessments and payments or allocations made
to establish or maintain reserves.

(e) "Exempted taxes and assessments" means direct payments
for taxes to government agencies, contributions to the Minnesota
Comprehensive Health Association, the medical assistance
provider's surcharge under section 256.9657, the MinnesotaCare
provider tax under new text begin Minnesota Statutes 2004, new text end section 295.52,
assessments by the Health Coverage Reinsurance Association,
assessments by the Minnesota Life and Health Insurance Guaranty
Association, assessments by the Minnesota Risk Adjustment
Association, and any new assessments imposed by federal or state
law.

(f) "Consumer cost-sharing or subscriber liability" means
enrollee coinsurance, co-payment, deductible payments, and
amounts in excess of benefit plan maximums.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 3.

new text begin [62J.27] CIGARETTE COST MITIGATION FEE.
new text end

new text begin Subdivision 1. new text end

new text begin Imposition of fee. new text end

new text begin A cigarette cost
mitigation fee is imposed on and collected from cigarette
distributors to recover for the state health costs related to or
caused by smoking and to reduce smoking, particularly by youths.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin The definitions under section
297F.01 apply to this section.
new text end

new text begin Subd. 3. new text end

new text begin Computation of fee. new text end

new text begin (a) The legislature shall
biennially set the amount of the fee by law based on an estimate
of the health costs to the state of cigarette smoking. The fee
for fiscal year 2006 and for each succeeding fiscal year is
$....... until modified by law.
new text end

new text begin (b) For each fiscal year, the commissioner shall determine
each cigarette distributor's fee and notify the distributor by
the first day of May preceding the beginning of the fiscal
year. A distributor's fee is determined by multiplying the
total fee under paragraph (a) by a fraction, the numerator of
which is the number of tax stamps purchased by the distributor
under chapter 297F in the calendar year ending during the
previous fiscal year and the denominator of which is the total
number of tax stamps purchased under chapter 297F in that period
by all distributors.
new text end

new text begin Subd. 4. new text end

new text begin Successors in interest; new entrants. new text end

new text begin (a) A
"distributor" includes any individual or entity that is the
successor in interest to a distributor, including any entity
that has substantially acquired the business assets of a
distributor. The successor in interest is liable for the fee
under this section. The commissioner shall calculate and impose
the fee on a successor in interest on a basis that includes the
purchases of tax stamps by its predecessor, as well as any
purchases made by the successor entity or person itself, during
the relevant period.
new text end

new text begin (b) If a distributor did not purchase tax stamps for at
least 500,000 cigarettes in each month of the calendar year
ending during the previous fiscal year, the fee under this
section must be applied at the rate under subdivision 6 for the
fiscal year. The commissioner shall notify the distributor that
its fee will be calculated and imposed under this paragraph by
the first day of May preceding the fiscal year and the
distributor shall pay the fee with each of its monthly tax
returns filed under section 297F.09 for the fiscal year.
new text end

new text begin Subd. 5. new text end

new text begin Payment. new text end

new text begin A distributor must pay the fee in
equal monthly installments in the same time and manner as
provided for payment of tax under chapter 297F. The
commissioner shall bill distributors for the fee. This may be
done at the time the commissioner notifies the distributor of
its annual liability for the fee or at another time or in a
manner the commissioner determines to be adequate and
appropriate.
new text end

new text begin Subd. 6. new text end

new text begin Fee on use of unstamped cigarettes. new text end

new text begin (a) The
commissioner shall estimate the average rate of the fee under
this section on a per cigarette basis for each fiscal year to
which the fee applies. The commissioner shall publish this rate
in the State Register by June 15 preceding the beginning of the
fiscal year.
new text end

new text begin (b) Any person, other than a distributor, that purchases or
possesses cigarettes that have not been stamped or taxed under
chapter 297F is liable for the fee under this section on the
possession or use of those cigarettes at the rate published in
the State Register for the fiscal year.
new text end

new text begin Subd. 7. new text end

new text begin Administration. new text end

new text begin The audit, assessment,
interest, appeal, refund, and collection provisions applicable
to the taxes imposed under chapter 297F apply to the fee imposed
under this section.
new text end

new text begin Subd. 8. new text end

new text begin License revocation. new text end

new text begin (a) The commissioner may
revoke or suspend the license of a distributor for failure to
pay the fee or otherwise comply with the requirements under this
section. The provisions and procedures under section 297F.04
apply to a suspension or revocation under this subdivision.
new text end

new text begin (b) The commissioner may revoke a retailer's sales or use
tax permit under section 297F.185 if:
new text end

new text begin (1) the retailer, directly or indirectly, purchases for
resale 20,000 cigarettes or more from a distributor that has not
paid the fee under this section; and
new text end

new text begin (2) the commissioner has notified the person that the
distributor has not paid the fee before the purchase was made or
the commissioner has posted notice that the distributor is in
violation of the fee law on the department's Web site at least
15 days before the sale was made.
new text end

new text begin Subd. 9. new text end

new text begin Deposit of revenues. new text end

new text begin The commissioner shall
deposit the revenues from the fee under this section in the
health care access fund.
new text end

new text begin Subd. 10. new text end

new text begin Exemption; administrative procedure act. new text end

new text begin The
commissioner's calculations of the fee amounts under this
section are not subject to the provisions of the Administrative
Procedure Act, chapter 14.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
The fee for fiscal year 2006 applies at five-sixths the amount
under section 62J.27, subdivision 3, and payments are due in ten
equal monthly installments beginning in September 2005. The
commissioner of revenue shall notify distributors of their
liability for the fee and monthly payment schedule by no later
than August 15, 2005.
new text end

Sec. 4.

Minnesota Statutes 2004, section 62Q.095,
subdivision 6, is amended to read:

Subd. 6.

Exemption.

A health plan company, to the extent
that it operates as a staff model health plan company deleted text begin as defined
in section 295.50, subdivision 12b, deleted text end by employing allied
independent health care providers to deliver health care
services to enrollees, is exempt from this section. new text begin For
purposes of this section, "staff model health plan company"
means a health plan company as defined in section 62Q.01,
subdivision 4, that employs one or more types of health care
provider to deliver health care services to the health plan
company's enrollees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 5.

Minnesota Statutes 2004, section 214.16,
subdivision 2, is amended to read:

Subd. 2.

Board cooperation required.

The board shall
assist the commissioner of health in data collection activities
required under Laws 1992, chapter 549, article 7 deleted text begin , and shall
assist the commissioner of revenue in activities related to
collection of the health care provider tax required under Laws
1992, chapter 549, article 9 deleted text end . Upon the request of the
commissioner deleted text begin or the commissioner of revenue deleted text end , the board shall
make available names and addresses of current licensees and
provide other information or assistance as needed.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 6.

Minnesota Statutes 2004, section 214.16,
subdivision 3, is amended to read:

Subd. 3.

Grounds for disciplinary action.

The board
shall take disciplinary action, which may include license
revocation, against a regulated person for:

(1) intentional failure to provide the commissioner of
health with the data required under chapter 62J; new text begin and
new text end

(2) deleted text begin intentional failure to provide the commissioner of
revenue with data on gross revenue and other information
required for the commissioner to implement sections 295.50 to
295.58;
deleted text end

deleted text begin (3) intentional failure to pay the health care provider tax
required under section 295.52; and
deleted text end

deleted text begin (4) deleted text end entering into a contract or arrangement that is
prohibited under sections 62J.70 to 62J.73.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 7.

Minnesota Statutes 2004, section 270B.14,
subdivision 1, is amended to read:

Subdivision 1.

Disclosure to commissioner of human
services.

(a) On the request of the commissioner of human
services, the commissioner shall disclose return information
regarding taxes imposed by chapter 290, and claims for refunds
under chapter 290A, to the extent provided in paragraph (b) and
for the purposes set forth in paragraph (c).

(b) Data that may be disclosed are limited to data relating
to the identity, whereabouts, employment, income, and property
of a person owing or alleged to be owing an obligation of child
support.

(c) The commissioner of human services may request data
only for the purposes of carrying out the child support
enforcement program and to assist in the location of parents who
have, or appear to have, deserted their children. Data received
may be used only as set forth in section 256.978.

(d) The commissioner shall provide the records and
information necessary to administer the supplemental housing
allowance to the commissioner of human services.

(e) At the request of the commissioner of human services,
the commissioner of revenue shall electronically match the
Social Security numbers and names of participants in the
telephone assistance plan operated under sections 237.69 to
237.711, with those of property tax refund filers, and determine
whether each participant's household income is within the
eligibility standards for the telephone assistance plan.

(f) The commissioner may provide records and information
collected under new text begin Minnesota Statutes 2004, new text end sections 295.50 to
295.59 new text begin , new text end to the commissioner of human services for purposes of
the Medicaid Voluntary Contribution and Provider-Specific Tax
Amendments of 1991, Public Law 102-234. Upon the written
agreement by the United States Department of Health and Human
Services to maintain the confidentiality of the data, the
commissioner may provide records and information collected under
sections 295.50 to 295.59 to the Centers for Medicare and
Medicaid Services section of the United States Department of
Health and Human Services for purposes of meeting federal
reporting requirements.

(g) The commissioner may provide records and information to
the commissioner of human services as necessary to administer
the early refund of refundable tax credits.

(h) The commissioner may disclose information to the
commissioner of human services necessary to verify income for
eligibility and premium payment under the MinnesotaCare program,
under section 256L.05, subdivision 2.

(i) The commissioner may disclose information to the
commissioner of human services necessary to verify whether
applicants or recipients for the Minnesota family investment
program, general assistance, food support, and Minnesota
supplemental aid program have claimed refundable tax credits
under chapter 290 and the property tax refund under chapter
290A, and the amounts of the credits.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 8.

Minnesota Statutes 2004, section 325D.32,
subdivision 9, is amended to read:

Subd. 9.

Basic cost of cigarettes.

"Basic cost of
cigarettes" means the gross invoice cost of cigarettes to the
wholesaler or retailer plus new text begin (1) new text end the full face value of any
stamps which may be required by any cigarette tax act of this
state, unless included by the manufacturer in the list price new text begin and
(2) the greater of the amount of the published fee under section
62J.27, subdivision 6, or the actual per cigarette fee paid by
the wholesaler for the fiscal year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective September 1,
2005.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 13.4967, subdivision 3;
295.50; 295.51; 295.52; 295.53; 295.54; 295.55; 295.56; 295.57;
295.58; 295.581; 295.582; and 295.59, are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for gross
revenues received after December 31, 2005.
new text end