HB 503 am S: "An Act relating to taxes on cigarettes and tobacco products, to tax stamps on cigarettes, to forfeiture of cigarettes and of property used in the manufacture, transportation, facilitation of transportation, possession, offering for sale, or sale of unstamped cigarettes, to unfair cigarette sales, and to licenses and licensees under the Cigarette Tax Act; the tobacco product Master Settlement Agreement; and providing for an effective date."
00 HOUSE BILL NO. 503 am S 01 "An Act relating to taxes on cigarettes and tobacco products, to tax stamps on 02 cigarettes, to forfeiture of cigarettes and of property used in the manufacture, 03 transportation, facilitation of transportation, possession, offering for sale, or sale of 04 unstamped cigarettes, to unfair cigarette sales, and to licenses and licensees under the 05 Cigarette Tax Act; the tobacco product Master Settlement Agreement; and providing 06 for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 43.50.030(d) is amended to read: 09 (d) For each license issued to a direct-buying retailer, and for each renewal, 10 the fee is $50 [$25]. 11 * Sec. 2. AS 43.50.035 is repealed and reenacted to read: 12 Sec. 43.50.035. Wholesaler-distributor license. (a) A person outside of this 13 state who sells or distributes cigarettes into this state and is not required to be licensed
01 under AS 43.50.010 may apply for a wholesaler-distributor license. 02 (b) A person outside of this state who sells or distributes cigarettes into this 03 state, who is not required to be licensed under AS 43.50.010, and who wishes to 04 purchase stamps under this chapter shall be licensed as a wholesaler-distributor. 05 (c) The department shall adopt reasonable regulations necessary for the 06 collection of cigarette taxes on cigarette sales or distributions made by a wholesaler- 07 distributor licensee into this state and standards for 08 (1) application and issuance of the license; and 09 (2) refusal to issue the license. 10 * Sec. 3. AS 43.50.090(a) is amended to read: 11 (a) There is levied an excise tax of 38 mills on each cigarette imported or 12 acquired in the state. The tax shall be paid through the use of stamps as provided in 13 AS 43.50.500 - 43.50.700. A person who imports or acquires cigarettes in the 14 state upon which a stamp required by this chapter has not been affixed in 15 accordance with AS 43.50.500 - 43.50.700, who fails to apply to purchase stamps 16 as required by AS 43.50.540(a), and who fails to pay the tax through the use of 17 stamps is not relieved [THE FAILURE TO PAY THE TAX THROUGH THE USE 18 OF STAMPS DOES NOT RELIEVE A PERSON] of the obligation to pay taxes due 19 under this chapter. The person shall still pay the tax, and the tax is due on or before 20 the end of the month following the month in which cigarettes were manufactured, 21 imported, acquired, or sold in this state. Cigarettes upon which the excise is imposed 22 are not again subject to the excise when acquired by another person. 23 * Sec. 4. AS 43.50.170(1) is amended to read: 24 (1) "buyer" means a person who imports or acquires cigarettes for the 25 person's own consumption from any source other than a manufacturer, distributor, 26 direct-buying retailer, [OR] retailer, or wholesaler-distributor; 27 * Sec. 5. AS 43.50.170(3) is amended to read: 28 (3) "direct-buying retailer" means a person who is engaged in the sale 29 of cigarettes at retail in this state, and who brings cigarettes or causes cigarettes to be 30 brought [CIGARETTES] into the state that are not purchased from a wholesaler- 31 distributor;
01 * Sec. 6. AS 43.50.170(4) is amended to read: 02 (4) "distributor" means a person who brings cigarettes that are not 03 purchased from a wholesaler-distributor, or has cigarettes that are not purchased 04 from a wholesaler-distributor brought into the state, and who sells or distributes at 05 least 75 percent [PER CENT] of the cigarettes to others for resale in the state; 06 * Sec. 7. AS 43.50.170(12) is amended to read: 07 (12) "wholesaler-distributor" means a person outside this state who 08 sells or distributes cigarettes into this state, [AND] who is not required to be licensed 09 under AS 43.50.010, and who is licensed under AS 43.50.035. 10 * Sec. 8. AS 43.50.190(a) is amended to read: 11 (a) There is levied an excise tax of 62 [12] mills on each cigarette imported or 12 acquired in this state. 13 * Sec. 9. AS 43.50.300 is amended to read: 14 Sec. 43.50.300. Excise tax levied. An excise tax is levied on tobacco 15 products in the state at the rate of 100 [75] percent of the wholesale price of the 16 tobacco products. The tax is levied when a person 17 (1) brings, or causes to be brought, a tobacco product into the state 18 from outside the state for sale; 19 (2) makes, manufactures, or fabricates a tobacco product in the state 20 for sale in the state; [OR] 21 (3) ships or transports a tobacco product to a retailer in the state for 22 sale by the retailer or to an individual for personal consumption; or 23 (4) brings, or causes to be brought, a tobacco product into the state 24 from outside the state for personal consumption. 25 * Sec. 10. AS 43.50.320(a) is repealed and reenacted to read: 26 (a) Except as provided in (g) of this section, a person engaging in an activity 27 described in AS 43.50.300(1) - (3) must be licensed by the department as a distributor, 28 and a person engaging in an activity described in AS 43.50.300(4) must be licensed as 29 a buyer. 30 * Sec. 11. AS 43.50.320(b) is amended to read: 31 (b) The department, upon application and payment of a fee of $50, shall issue
01 a license for one year to a person who applies for a distributor license [UNDER (a) 02 OF THIS SECTION]. The department, upon application and payment of a fee of 03 $25, shall issue a license for one year to a person who applies for a buyer license. 04 * Sec. 12. AS 43.50.320(d) is amended to read: 05 (d) A distributor license issued under this section must include the name and 06 address of the licensee, the type of business to be conducted, and the year for which 07 the license is issued. 08 * Sec. 13. AS 43.50.320(e) is amended to read: 09 (e) The department may renew a distributor license issued under this section 10 for a fee of $50. The department may renew a buyer license issued under this 11 section for a fee of $25. 12 * Sec. 14. AS 43.50.330(a) is amended to read: 13 (a) On or before the last day of each calendar month, a licensee shall file a 14 return with the department. The return must state the number or amount of tobacco 15 products sold or imported for personal consumption by the licensee during the 16 preceding calendar month, the selling price or purchase price of the tobacco 17 products, and the amount of tax imposed on the tobacco products. 18 * Sec. 15. AS 43.50.390(2) is amended to read: 19 (2) "licensee" means a distributor or buyer who is 20 (A) licensed under AS 43.50.320; or 21 (B) exempted by AS 43.50.320(g) from licensing under 22 AS 43.50.320; 23 * Sec. 16. AS 43.50.390 is amended by adding a new paragraph to read: 24 (6) "buyer" means a person who imports tobacco products for the 25 person's own consumption from any source other than a licensee. 26 * Sec. 17. AS 43.50.540(f) is amended to read: 27 (f) Title to the stamps passes immediately to the licensee at the time the 28 stamps are obtained in person or, if the stamps are shipped or transported, at the time 29 the stamps are placed in the United States mail or received by the common or private 30 carrier. The licensee bears all costs associated with shipping or transporting the 31 stamps. The department may replace stamps lost or damaged in transit if the
01 licensee provides proof acceptable to the department verifying that the loss or 02 damage occurred while the stamps were in the possession of the shipping 03 company and the shipping company substantiates the loss or damage. Damaged 04 stamps must be returned to the department before the department may replace 05 them [AND ALL RISKS OF POSSIBLE LOSS OR DAMAGE WHILE IN 06 TRANSIT]. 07 * Sec. 18. AS 43.50.550(b) is amended to read: 08 (b) A licensee who submits an application for the purchase of stamps on a 09 deferred-payment basis shall, as a condition of approval of the application, post a 10 bond acceptable to the department in an amount equal to 11 (1) 200 percent of the maximum dollar amount of allowed monthly 12 purchases under this section; or 13 (2) 100 percent of the maximum dollar amount of allowed monthly 14 purchases under this section if the licensee 15 (A) holds a license issued under AS 43.50.010 for a physical 16 location in this state; and 17 (B) has been in full compliance with the provisions of this 18 title and regulations adopted under this title during the preceding 60 19 months [AS A CONDITION OF APPROVAL OF THE APPLICATION]. 20 * Sec. 19. AS 43.50.580(b) is amended to read: 21 (b) A licensee may possess unstamped cigarettes in this state if 22 (1) the licensee posts a surety bond in an amount satisfactory to the 23 department to ensure performance of its duties under this chapter; and 24 (2) unstamped cigarettes are necessary for the conduct of the licensee's 25 business in making sales or distributions 26 (A) to an instrumentality of the federal government or an 27 Indian tribal organization authorized by law to possess cigarettes not taxed 28 under this chapter; or 29 (B) to customers outside the state and the licensee provides 30 proof acceptable to the department that the licensee is properly licensed in 31 the jurisdictions outside the state where the sales or distributions are
01 made. 02 * Sec. 20. AS 43.50.590(a) is amended to read: 03 (a) The department shall adopt procedures for a refund or credit to a licensee 04 in the amount of the denominated value, less the discount given under AS 43.50.540, 05 for 06 (1) unused or damaged stamps; [OR] 07 (2) stamps affixed to cigarette packages that have become unfit for use 08 or sale, are destroyed, or are returned to the manufacturer for credit or replacement if 09 the licensee provides proof acceptable to the department that the cigarettes have not 10 been and will not be consumed in this state; or 11 (3) stamps affixed to cigarette packages that are sold or 12 distributed outside the state if the licensee provides proof acceptable to the 13 department that the cigarettes have not been and will not be consumed in this 14 state and the licensee is properly licensed in the jurisdictions outside the state 15 where the sales or distributions are made. 16 * Sec. 21. AS 43.50 is amended by adding a new section to read: 17 Sec. 43.50.625. Forfeiture of other property. (a) Upon a showing of 18 probable cause that a person has committed the crime of misconduct involving 19 unstamped cigarettes or stamps in the first degree under AS 43.50.640, the following 20 are subject to forfeiture: 21 (1) material and equipment used in the manufacture, sale, offering for 22 sale, or possession for sale of cigarettes in this state in violation of AS 43.50.500 - 23 43.50.640 or 43.50.660 - 43.50.700; 24 (2) aircraft, vehicles, or vessels used to transport or facilitate the 25 transportation of cigarettes manufactured, sold, offered for sale, or possessed for sale 26 in this state in violation of AS 43.50.500 - 43.50.640 or 43.50.660 - 43.50.700; 27 (3) money, securities, negotiable instruments, or other things of value 28 used in financial transactions derived from activity prohibited under AS 43.50.500 - 29 43.50.640 or 43.50.660 - 43.50.700. 30 (b) Property subject to forfeiture under this section may be actually or 31 constructively seized under an order issued by the superior court upon a showing of
01 probable cause that the property is subject to forfeiture under this section. 02 Constructive seizure is effected upon posting a signed notice of seizure on the item to 03 be forfeited, stating the violation and the date and place of seizure. Seizure without a 04 court order may be made if 05 (1) the seizure is incident to a valid arrest or search; 06 (2) the property subject to seizure is the subject of a prior judgment in 07 favor of the state; or 08 (3) there is probable cause to believe that the property is subject to 09 forfeiture under (a) of this section; property seized under this paragraph may be held 10 for not more than 48 hours unless an order of forfeiture is issued by the court before 11 the end of that time period. 12 (c) Within 30 days after a seizure under this section, the Department of Public 13 Safety shall make reasonable efforts to ascertain the identity and whereabouts of any 14 person holding an interest, or an assignee of a person holding an interest, in the 15 property seized, including a right to possession, or a lien, mortgage, or conditional 16 sales contract. The Department of Public Safety shall notify the person ascertained to 17 have an interest in the seized property of the impending forfeiture, and, before 18 forfeiture, the Department of Public Safety shall publish, once a week for four 19 consecutive calendar weeks, a notice of the impending forfeiture in a newspaper of 20 general circulation in the judicial district in which the seizure was made, or if a 21 newspaper is not published in that judicial district, in a newspaper published in the 22 state and distributed in that judicial district. 23 (d) Property subject to forfeiture under (a) of this section may be forfeited 24 (1) upon conviction of a person for a violation of AS 43.50.640; or 25 (2) upon judgment by the superior court in a proceeding in rem that the 26 property was used in a manner subjecting it to forfeiture under (a) of this section. 27 (e) The owner of property subject to forfeiture under (a) of this section is 28 entitled to relief from the forfeiture in the nature of remission of the forfeiture if, in an 29 action under (d) of this section, the owner shows that the owner 30 (1) was not a party to the violation; 31 (2) did not have actual knowledge or reasonable cause to believe that
01 the property was used or was to be used in violation of the law; and 02 (3) did not have actual knowledge or reasonable cause to believe that 03 the person committing the violation had, within the last 10 years, 04 (A) a criminal record for violating this chapter; or 05 (B) committed other violations of this chapter. 06 (f) The court may allow the owner of property that is subject to forfeiture 07 under (a) of this section to redeem the property by paying an amount determined by 08 the court to be the fair market value of the property. 09 (g) A person other than the owner holding, or the assignee of, a lien, 10 mortgage, or conditional sales contract on, or the right to possession of property 11 subject to forfeiture under (a) of this section is entitled to relief from the forfeiture in 12 the nature of remission of the forfeiture if, in an action under (d) of this section, the 13 person shows that the person 14 (1) was not a party to the violation subjecting the property to 15 forfeiture; 16 (2) did not have actual knowledge or reasonable cause to believe that 17 the property was used or was to be used in violation of the law; and 18 (3) did not have actual knowledge or reasonable cause to believe that 19 the person committing the violation had, within the last 10 years, 20 (A) a criminal record for violating this chapter; or 21 (B) committed other violations of this chapter. 22 (h) It is not a defense in an in rem forfeiture proceeding brought under (d)(2) 23 of this section that a criminal proceeding is pending or has resulted in conviction or 24 acquittal of a person charged with violating AS 43.50.640. 25 (i) Property forfeited under this section shall be placed in the custody of the 26 commissioner of public safety for disposition according to an order entered by the 27 court. The court shall order destroyed any property forfeited under this section that is 28 harmful to the public and may order any property forfeited under this section that was 29 seized in a municipality to be transferred to the municipality in which the property was 30 seized or to another municipality affected by the crime for which the property was 31 forfeited. The state shall notify all municipalities affected by the crime of the
01 forfeiture proceeding. Other property shall be ordered sold and the proceeds used for 02 payment of expenses of the proceedings for forfeiture and sale, including expenses of 03 seizure, custody, and court costs. The remainder of the proceeds shall be deposited in 04 the general fund. 05 (j) The title to a vehicle or vessel forfeited to the state under this section may 06 be transferred by the state to a municipality or the local governing body of a village 07 for official use by the municipality or village, on condition that the vehicle or vessel 08 not be available for use by the defendant. 09 * Sec. 22. AS 43.50.640(a) is amended to read: 10 (a) A person commits the crime of misconduct involving unstamped cigarettes 11 or stamps in the first degree if the person 12 (1) with reckless disregard that the cigarettes are unstamped 13 (A) sells or distributes 5,000 [1,000] or more unstamped 14 cigarettes in a single transaction; 15 (B) owns or possesses 5,000 [1,000] or more unstamped 16 cigarettes with the intent to sell; or 17 (C) acquires, holds, transports, imports, or possesses 10,000 or 18 more unstamped cigarettes; or 19 (2) with reckless disregard that the stamp was previously affixed to 20 another cigarette package[;] 21 (A) affixes a previously used stamp to a cigarette package; or 22 (B) possesses, sells, or distributes a previously used stamp. 23 * Sec. 23. AS 43.50.650(a) is amended to read: 24 (a) A person commits the crime of misconduct involving unstamped cigarettes 25 or stamps in the second degree if the person 26 (1) with reckless disregard that the cigarettes are unstamped 27 (A) sells or distributes at least one but fewer than 5,000 [1,000] 28 unstamped cigarettes in a single transaction; 29 (B) owns or possesses at least one but fewer than 5,000 30 [1,000] unstamped cigarettes, with intent to sell; or 31 (C) acquires, holds, transports, imports, or possesses at least
01 one but fewer than 10,000 unstamped cigarettes; or 02 (2) is not licensed under this chapter or otherwise authorized by the 03 department to possess stamps and possesses a stamp that is not affixed to a cigarette 04 package. 05 * Sec. 24. AS 43.50.710 is amended by adding a new subsection to read: 06 (e) Nothing in this section prohibits a manufacturer from offering promotions 07 to a wholesaler or a retailer provided the wholesale promotion is the same for all 08 participating wholesalers and the retail promotion is the same for all participating 09 retailers. 10 * Sec. 25. AS 43.50.720 is amended to read: 11 Sec. 43.50.720. Sale at less than cost; with gift or concession. In all 12 advertisements, offers for sale, or sales involving two or more items when at least one 13 of the items is cigarettes at a combined price, and in all advertisements, offers for sale, 14 or sales involving the giving of any gift, concession, or coupon of any kind in 15 conjunction with the sale of cigarettes, the wholesaler's or retailer's combined selling 16 price may not be below the actual cost to the wholesaler or the actual cost to the 17 retailer, respectively, of the total of all articles, products, commodities, gifts, and 18 concessions included in the transactions, except that, if any articles, products, 19 commodities, gifts, or concessions are not cigarettes, the actual [BASIC] cost shall be 20 determined as provided under AS 43.50.800. 21 * Sec. 26. AS 43.50.760(b) is amended to read: 22 (b) The presumptive actual [WHOLESALE AND PRESUMPTIVE RETAIL] 23 cost of cigarettes as determined by the department under AS 43.50.800 [FROM THE 24 MANUFACTURER'S PRICE LIST] is considered competent evidence in a court 25 action or proceeding as tending to prove actual cost to the wholesaler or retailer 26 complained against. A party against whom the presumptive actual [WHOLESALE 27 OR PRESUMPTIVE RETAIL] cost as determined by the department is introduced in 28 evidence has the right to offer evidence tending to prove any inaccuracy of the 29 presumptive actual [WHOLESALE OR PRESUMPTIVE RETAIL] cost or any 30 statement of facts that would impair its probative value. 31 * Sec. 27. AS 43.50.770 is amended to read:
01 Sec. 43.50.770. Determination of cost of cigarettes purchased outside of 02 ordinary channels of trade. In establishing the actual [BASIC] cost of cigarettes to 03 a wholesaler or retailer, the invoice cost [OR THE ACTUAL COST] of cigarettes 04 purchased at a forced, bankrupt, or closeout sale, or other sale outside the ordinary 05 channels of trade may not be used. 06 * Sec. 28. AS 43.50.790(a) is amended to read: 07 (a) The department 08 (1) shall administer AS 43.50.710 - 43.50.849; 09 (2) may adopt regulations relating to the administration and 10 enforcement of AS 43.50.710 - 43.50.849; 11 (3) may determine the actual [BASIC] cost of cigarettes to a 12 wholesaler or retailer as provided in AS 43.50.800 [FROM INFORMATION 13 OBTAINED FROM A MANUFACTURER]; 14 (4) may, after reasonable notice and hearing, revoke or suspend a 15 license issued under AS 43.50.010 or 43.50.035 to a person who refuses or neglects to 16 comply with a provision of AS 43.50.710 - 43.50.849. 17 * Sec. 29. AS 43.50.800 is repealed and reenacted to read: 18 Sec. 43.50.800. Presumptions applicable to determination of cost. (a) The 19 presumptive actual cost of cigarettes to a wholesaler is, for purposes of AS 43.50.710 - 20 43.50.849, the presumptive wholesale cost as calculated by the department plus an 21 amount equal to four and one-half percent of the presumptive wholesale cost to 22 account for business costs. For purposes of this section, the presumptive wholesale 23 cost is the manufacturer's list price, less trade discounts, plus the full face value of all 24 cigarette taxes. 25 (b) The presumptive actual cost of cigarettes to a retailer is, for purposes of 26 AS 43.50.710 - 43.50.849, the presumptive actual cost of cigarettes to the wholesaler 27 as calculated by the department under (a) of this section, plus an amount equal to six 28 percent of the presumptive actual cost of cigarettes to the wholesaler to account for 29 business costs. 30 (c) A wholesaler or retailer that wishes to advertise, offer to sell, or sell 31 cigarettes at less than the presumptive actual cost to the wholesaler or retailer as
01 calculated under (a) or (b) of this section must first obtain approval from the 02 department. The department may grant approval only if the wholesaler or retailer 03 provides proof satisfactory to the department that the wholesaler or retailer's actual 04 cost is lower than presumed. Approval for cigarette sales at less than the presumptive 05 actual cost as determined under (a) or (b) of this section may not be granted for a 06 period longer than one year. In reviewing proof of actual wholesale or retail cost, the 07 department may consider the costs reflected on the actual invoice, but may not 08 consider cash discounts. In reviewing proof of actual costs, the department may 09 consider the standards and methods of accounting regularly employed, and must 10 include labor costs, rent, depreciation, selling costs, maintenance of equipment, 11 delivery costs, all types of licenses, taxes, insurance, advertising, preopening 12 expenses, provision for impaired assets and closing costs, interest expenses, and 13 provision for merger and restructuring expenses. The department shall adopt 14 regulations under which the wholesaler's and retailer's actual costs are determined for 15 purposes of AS 43.50.710 - 43.50.849. 16 * Sec. 30. AS 45.53.020(b) is amended to read: 17 (b) A tobacco product manufacturer that places money into escrow under 18 (a)(2) of this section is entitled to receive the interest or other appreciation on such 19 money as earned. Such money itself shall be released from escrow only under the 20 following circumstances: 21 (1) to pay a judgment or settlement on a released claim brought against 22 such tobacco product manufacturer by this state or a releasing party located or residing 23 in this state; the funds shall be released from escrow under this paragraph in the order 24 in which they were placed into escrow and only to the extent and at the time necessary 25 to make payments required under the judgment or settlement; 26 (2) to the extent that the tobacco product manufacturer establishes that 27 the amount that it was required to place into escrow on account of units sold in the 28 state in a particular year was greater than the Master Settlement Agreement 29 payments, as determined under sec. IX(i) of the Master Settlement Agreement, 30 including, after final determination of all adjustments, payments that the 31 manufacturer would have been required to make on account of those units had it
01 been a participating manufacturer [STATE'S ALLOCABLE SHARE OF THE 02 TOTAL PAYMENTS THAT THE MANUFACTURER WOULD HAVE BEEN 03 REQUIRED TO MAKE IN THAT YEAR UNDER THE MASTER SETTLEMENT 04 AGREEMENT HAD IT BEEN A PARTICIPATING MANUFACTURER, AS SUCH 05 PAYMENTS ARE DETERMINED UNDER SEC. IX(i)(2) OF THE MASTER 06 SETTLEMENT AGREEMENT AND BEFORE ANY OF THE ADJUSTMENTS OR 07 OFFSETS DESCRIBED IN SEC. IX(i)(3) OF THAT AGREEMENT OTHER THAN 08 THE INFLATION ADJUSTMENT], the excess shall be released from escrow and 09 revert back to that tobacco product manufacturer; or 10 (3) to the extent not released from escrow under (1) or (2) of this 11 subsection [SUBSECTIONS], funds placed into escrow shall be released from escrow 12 and revert back to the tobacco product manufacturer 25 years after the date on which 13 they were placed into escrow. 14 * Sec. 31. AS 45.53.020(b) is repealed and reenacted to read: 15 (b) A tobacco product manufacturer that places money into escrow under 16 (a)(2) of this section is entitled to receive the interest or other appreciation on such 17 money as earned. Such money itself shall be released from escrow only under the 18 following circumstances: 19 (1) to pay a judgment or settlement on a released claim brought against 20 such tobacco product manufacturer by this state or a releasing party located or residing 21 in this state; the funds shall be released from escrow under this paragraph in the order 22 in which they were placed into escrow and only to the extent and at the time necessary 23 to make payments required under the judgment or settlement; 24 (2) to the extent not released from escrow under (1) of this subsection, 25 funds placed into escrow shall be released from escrow and revert back to the tobacco 26 product manufacturer 25 years after the date on which they were placed into escrow. 27 * Sec. 32. AS 45.53.020(b) is repealed and reenacted to read: 28 (b) A tobacco product manufacturer that places money into escrow under 29 (a)(2) of this section is entitled to receive the interest or other appreciation on such 30 money as earned. Such money itself shall be released from escrow only under the 31 following circumstances:
01 (1) to pay a judgment or settlement on a released claim brought against 02 such tobacco product manufacturer by this state or a releasing party located or residing 03 in this state; the funds shall be released from escrow under this paragraph in the order 04 in which they were placed into escrow and only to the extent and at the time necessary 05 to make payments required under the judgment or settlement; 06 (2) to the extent that the tobacco product manufacturer establishes that 07 the amount that it was required to place into escrow in a particular year was greater 08 than the state's allocable share of the total payments that the manufacturer would have 09 been required to make in that year under the master settlement agreement had it been a 10 participating manufacturer, as such payments are determined under sec. IX(i)(2) of the 11 master settlement agreement and before any of the adjustments or offsets described in 12 sec. IX(i)(3) of that agreement other than the inflation adjustment, the excess shall be 13 released from escrow and revert back to that tobacco product manufacturer; or 14 (3) to the extent not released from escrow under (1) or (2) of this 15 subsection, funds placed into escrow shall be released from escrow and revert back to 16 the tobacco product manufacturer 25 years after the date on which they were placed 17 into escrow. 18 * Sec. 33. The uncodified law of the State of Alaska enacted in sec. 4, ch. 48, SLA 1997, is 19 repealed and reenacted to read: 20 Sec. 4. AS 43.50.190(a) is repealed and reenacted to read: 21 (a) There is levied an excise tax of 97.5 mills on each cigarette imported or acquired 22 in this state. 23 * Sec. 34. AS 43.50.740(b), 43.50.849(1), 43.50.849(6), and 43.50.849(7) are repealed. 24 * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 CONDITIONAL EFFECT. (a) Section 31 of this Act takes effect only if 27 AS 45.53.020(b)(2), as amended in sec. 30 of this Act, is held by a court of competent 28 jurisdiction to be unconstitutional. 29 (b) Section 32 of this Act takes effect only if AS 45.53.020(b)(2), as amended in sec. 30 30 and in sec. 31 of this Act, are held by a court of competent jurisdiction to be 31 unconstitutional.
01 * Sec. 36. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 TRANSITION: FLOOR STOCK TAX FOR CERTAIN CIGARETTES IN THE 04 STATE ON THE EFFECTIVE DATE OF THIS SECTION. (a) Notwithstanding any other 05 provision to the contrary, a floor stock tax is imposed at 12:01 a.m. on the effective date of 06 this section upon every person in control or possession of cigarettes for sale or distribution in 07 the state that were taxed at the rate in effect before the effective date of this section. The floor 08 stock tax is the difference between the tax computed on each cigarette as provided in 09 AS 43.50.190, as amended by sec. 8 of this Act, on the effective date of this section and the 10 tax actually paid on each cigarette as required by AS 43.50.190 as it read on the day before 11 the effective date of this section. The person subject to the floor stock tax under this section 12 must provide proof that the tax required by AS 43.50.190, as it read on the day before the 13 effective date of this section, on each cigarette was previously paid or the tax actually paid on 14 each cigarette is considered to be zero. 15 (b) A person subject to the floor stock tax under this section shall file a report on a 16 form prescribed by the Department of Revenue and pay the tax to the Department of Revenue 17 in six sequential monthly installments. The first installment shall be paid not later than the 18 last day of the month in which this section takes effect. The penalty, interest, and taxpayer 19 remedy provisions of AS 43.05 apply to the floor stock tax under this section. 20 * Sec. 37. If sec. 31 of this Act takes effect under sec. 35(a) of this Act, it takes effect on 21 the day after the date of a final order or decision by a court of competent jurisdiction holding 22 AS 45.53.020(b)(2), as amended in sec. 30 of this Act, to be unconstitutional. 23 * Sec. 38. If sec. 32 of this Act takes effect under sec. 35(b) of this Act, it takes effect on 24 the day after the date of a final order or decision by a court of competent jurisdiction holding 25 AS 45.53.020(b)(2), as amended in sec. 31 of this Act, to be unconstitutional. 26 * Sec. 39. Except as provided in secs. 37 and 38 of this Act, this Act takes effect July 1, 27 2004.