HF 284

as introduced - 88th Legislature (2013 - 2014) Posted on 02/04/2013 02:27pm

A bill for an act
relating to taxation; tobacco; modifying the definition of cigarette; proposing a
study; requiring a report; appropriating money; amending Minnesota Statutes
2012, sections 297F.01, subdivision 3; 325D.32, subdivision 2.

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

Section 1. new text begin CITATION.
new text end

new text begin This act may be cited as the "Tobacco Uniformity Act of 2013."
new text end

Sec. 2.

Minnesota Statutes 2012, section 297F.01, subdivision 3, is amended to read:

Subd. 3.

Cigarette.

"Cigarette" means any roll for smoking made wholly or in part
of tobacco deleted text begin , deleted text end new text begin that weighs 4.5 pounds or less per thousand:
new text end

new text begin (1) new text end the wrapper or cover of which is made of paper or another substance or material
except tobacco new text begin ; or
new text end

new text begin (2) wrapped in any substance containing tobacco, however labeled or named, which,
because of its appearance, size, the type of tobacco used in the filler, or its packaging,
pricing, marketing, or labeling, is likely to be offered to or purchased by consumers as
a cigarette, as defined in clause (1), unless it is wrapped in whole tobacco leaf and does
not have a cellulose acetate or other cigarette-like filter new text end .

Sec. 3.

Minnesota Statutes 2012, section 325D.32, subdivision 2, is amended to read:

Subd. 2.

Cigarettes.

"Cigarettes" means and includes any roll for smoking, made
wholly or in part of tobacco, irrespective of size and shape and whether or not such
tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover
of which is made of paper or any other substance or material except new text begin whole new text end tobacco new text begin leaf,
and includes any cigarette as defined in section 297F.01, subdivision 3 new text end .

Sec. 4. new text begin TOBACCO TAX COLLECTION REPORT.
new text end

new text begin Subdivision 1. new text end

new text begin Report to legislature. new text end

new text begin (a) The commissioner of revenue shall report
to the 2014 legislature on the tobacco tax collection system, including recommendations
to improve compliance under the excise tax for cigarettes and other tobacco products.
The purpose of the report is to provide information and guidance to the legislature on
improvements to the tobacco tax collection system to:
new text end

new text begin (1) provide a unified system of collecting the cigarette tax and other tobacco
products taxes, regardless of category, size, or shape, that ensures the highest reasonable
rates of tax collection;
new text end

new text begin (2) discourage tax evasion; and
new text end

new text begin (3) help to prevent illegal sale of tobacco products, which may make these products
more accessible to youth.
new text end

new text begin (b) In the report, the commissioner shall:
new text end

new text begin (1) provide a detailed review of the present excise tax collection and compliance
system as it applies to cigarettes and other tobacco products. This must include an
assessment of the levels of compliance for each category of products and the effect of
the stamping requirement on compliance rates for cigarettes relative to other tobacco
products. It also must identify any weaknesses in the system;
new text end

new text begin (2) survey the methods of collection and enforcement used by other states or nations,
including identifying and discussing emerging best practices that ensure tracking of
cigarettes and other tobacco products and result in the highest rates of tax collection and
compliance. These best practices must consider high-technology alternatives, such as use
of bar codes, radio-frequency identification tags, or similar mechanisms for tracking
compliance;
new text end

new text begin (3) evaluate the adequacy and effectiveness of the existing penalties and other
sanctions for noncompliance;
new text end

new text begin (4) evaluate the adequacy of the resources allocated by the state to enforce the
tobacco tax and prevention laws; and
new text end

new text begin (5) make recommendations on implementation of a comprehensive tobacco tax
collection system for Minnesota that can be implemented by January 1, 2014, including:
new text end

new text begin (i) recommendations on the specific steps needed to institute and implement the new
system, including estimates of the state's costs of doing so and any additional personnel
requirements;
new text end

new text begin (ii) recommendations on methods to recover the cost of implementing the system
from the industry;
new text end

new text begin (iii) evaluation of the extent to which the proposed system is sufficiently flexible
and adaptable to adjust to modifications in the construction, packaging, formatting, and
marketing of tobacco products by the industry; and
new text end

new text begin (iv) recommendations to modify existing penalties or to impose new penalties or
other sanctions to ensure compliance with the system.
new text end

new text begin Subd. 2. new text end

new text begin Due date. new text end

new text begin The report required by subdivision 1 is due January 15, 2014.
new text end

new text begin Subd. 3. new text end

new text begin Procedure. new text end

new text begin The report required under this section must be made in the
manner provided under Minnesota Statutes, section 3.195. In addition, copies must be
provided to the chairs and ranking minority members of the legislative committees and
divisions with jurisdiction over taxation.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin (a) $....... is appropriated from the general fund to the
commissioner of revenue for fiscal year 2014 for the cost of preparing the report under
subdivision 1.
new text end

new text begin (b) The appropriation under this subdivision is a onetime appropriation and is not
included in the base budget.
new text end

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective for sales and purchases made after June 30, 2013.
Section 4 is effective the day following final enactment.
new text end