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SPONSOR: |
Beam |
DATE TYPED: |
01/30/03 |
HB |
143 |
||
SHORT TITLE: |
Cigarette Delivery Sales Act |
SB |
|
||||
|
ANALYST: |
Smith |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
NFI |
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates SB58
Responses
Received From
Department of Finance and Administration
SUMMARY
Synopsis
of Bill
House Bill 143 makes a
variety of technical improvements to the cigarette tax statutes. It acts the
“Cigarette Delivery Sales Act”. The purpose of the act is to enforce
compliance. The salient features are listed below.
·
Restricts sales of cigarettes to consumers whose age address is
verified.
·
Delivery of cigarettes must include a copy of the act.
·
Delivery may not take place unless all taxes are paid on the
purchase.
·
All distributors/sellers must register with TRD and must provide a
record of sale including the consumer's name and address and the brand &
quantity of cigarettes sold.
·
Places monetary and criminal penalties on those who violate the
act and provides for forfeiture of fixtures, equipment, materials, and personal
property for those who knowingly attempt to defraud or fail to satisfy
requirements.
·
Requires distributors to obtain and apply cigarette stamps to
their product within 72-hours of receipt of cigarette packages and are
forbidden to sell or distribute the stamps to another person or
distributor.
·
Distributors are further restricted to buy cigarettes from a
licensed cigarette manufacturer or importer.
·
Tax-exempt stamps are provided to licensed distributors that are
in fully compliance with the reporting requirements of the Cigarette Tax
Act.
Significant
Issues
Under the
Master Settlement Agreement (MSA), states are required to strictly enforce the
model statute that “protects the public health gains associated with the
MSA". The Model Statute adopted in
New Mexico during the 1999 legislative session (NMSA 6-14-13) requires any tobacco
manufacturer selling cigarettes for consumption in New Mexico (whether
directly, or through distributor, retailer or similar intermediary or
intermediaries) to place $0.0167539 (from 2003 through 2006) for each cigarette
sold in an escrow fund. In essence, the
model statute ensures the market share of the original participating
manufacturers (OPMs) by equalizing the cigarette price of the small
manufacturers (non-participating manufacturers) and the OPMs-- assuming the tax
is passed directly on to the consumer.
FISCAL IMPLICATIONS
If the model
statute is not strictly enforced and the MSA is deemed to be a contributing
factor in the loss of market share experienced by the OPMs, the non-participating
manufacturer’s adjustment will apply to payments received by the states. This adjustment equals three times the market
shares loss experienced by the OPMs.
SS/sb