HCS SB 1001(FIN) am H: "An Act relating to restrictions on shipping or transporting cigarettes; 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 accounting for and use of part of the proceeds of the additional cigarette tax, and to licenses and licensees under the Cigarette Tax Act; relating to unfair cigarette sales; relating to supersedeas bonds in certain tobacco-related litigation; relating to the tobacco product Master Settlement Agreement; amending Rules 204 and 205, Alaska Rules of Appellate Procedure; and providing for an effective date."
00 HOUSE CS FOR SENATE BILL NO. 1001(FIN) am H 01 "An Act relating to restrictions on shipping or transporting cigarettes; relating to taxes 02 on cigarettes and tobacco products, to tax stamps on cigarettes, to forfeiture of cigarettes 03 and of property used in the manufacture, transportation, facilitation of transportation, 04 possession, offering for sale, or sale of unstamped cigarettes, to accounting for and use of 05 part of the proceeds of the additional cigarette tax, and to licenses and licensees under 06 the Cigarette Tax Act; relating to unfair cigarette sales; relating to supersedeas bonds in 07 certain tobacco-related litigation; relating to the tobacco product Master Settlement 08 Agreement; amending Rules 204 and 205, Alaska Rules of Appellate Procedure; and 09 providing for an effective date." 10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 12 to read:
01 INTENT. It is the intent of the legislature to provide aggregate funding to meet the 02 minimum amount of tobacco control programs recommended by the United States 03 Department of Health and Human Services, Centers for Disease Control and Prevention, from 04 tobacco taxes and other revenue sources accounted for in the tobacco use education and 05 cessation fund established in AS 37.05.580. 06 * Sec. 2. AS 43.50.030(a) is amended to read: 07 (a) For each license issued to a manufacturer, and for each renewal, the fee is 08 $50 [$5]. 09 * Sec. 3. AS 43.50.030(c) is amended to read: 10 (c) For each license issued to a vending machine operator, and for each 11 renewal, the fee is $50 [$25]. 12 * Sec. 4. AS 43.50.030(d) is amended to read: 13 (d) For each license issued to a direct-buying retailer, and for each renewal, 14 the fee is $50 [$25]. 15 * Sec. 5. AS 43.50.035 is repealed and reenacted to read: 16 Sec. 43.50.035. Wholesaler-distributor license. (a) A person outside of this 17 state who sells or distributes cigarettes into this state and is not required to be licensed 18 under AS 43.50.010 may apply for a wholesaler-distributor license. 19 (b) A person outside of this state who sells or distributes cigarettes into this 20 state, who is not required to be licensed under AS 43.50.010, and who wishes to 21 purchase stamps under this chapter is required to be licensed as a wholesaler- 22 distributor. 23 (c) The department shall adopt reasonable regulations necessary for the 24 collection of cigarette taxes on cigarette sales or distributions made by a wholesaler- 25 distributor licensee into this state and standards for 26 (1) application and issuance of the license; and 27 (2) refusal to issue the license. 28 * Sec. 6. AS 43.50.090(a) is amended to read: 29 (a) There is levied an excise tax of 38 mills on each cigarette imported or 30 acquired in the state. The tax shall be paid through the use of stamps as provided in 31 AS 43.50.500 - 43.50.700. A person who imports or acquires cigarettes in the
01 state upon which a stamp required by this chapter has not been affixed in 02 accordance with AS 43.50.500 - 43.50.700, who fails to apply to purchase stamps 03 as required by AS 43.50.540(a), and who fails to pay the tax through the use of 04 stamps is not relieved [THE FAILURE TO PAY THE TAX THROUGH THE USE 05 OF STAMPS DOES NOT RELIEVE A PERSON] of the obligation to pay taxes due 06 under this chapter. The person shall still pay the tax, and the tax is due on or before 07 the end of the month following the month in which cigarettes were manufactured, 08 imported, acquired, or sold in this state. Cigarettes upon which the excise is imposed 09 are not again subject to the excise when acquired by another person. 10 * Sec. 7. AS 43.50.090(d) is amended to read: 11 (d) The tax imposed under (a) of this section does not apply to the first 400 12 cigarettes personally transported into the state by an individual for that 13 individual's personal consumption [100 CIGARETTES IMPORTED BY AN 14 INDIVIDUAL FOR PERSONAL CONSUMPTION] during the calendar month. 15 * Sec. 8. AS 43.50.105(b) is amended to read: 16 (b) A person who is licensed under this chapter may not ship or cause to be 17 shipped cigarettes to a person in this state unless the person receiving the cigarettes 18 (1) is licensed under this chapter; 19 (2) holds a tobacco endorsement under AS 43.70.075; 20 (3) is an operator of a customs bonded warehouse under 19 U.S.C. 21 1311 or 19 U.S.C. 1555; [OR] 22 (4) is an instrumentality of the federal government or an Indian tribal 23 organization authorized by law to possess cigarettes not taxed under this chapter; or 24 (5) is an individual 19 years of age or older receiving the cigarettes 25 for personal consumption and the tax imposed on the cigarettes under this 26 chapter has been paid. 27 * Sec. 9. AS 43.50.105(c) is amended to read: 28 (c) A common or contract carrier may not knowingly transport cigarettes to a 29 person in this state unless the person 30 (1) shipping the cigarettes is licensed under this chapter and, before 31 shipment, provides the common or contract carrier with a copy of the person's current
01 license issued by the department and an affidavit from the intended recipient 02 certifying that the person receiving the cigarettes is a person described under (b)(1) - 03 (5) [(b)(1) - (4)] of this section; or 04 (2) receiving the cigarettes is a person described under (a)(2) or (3) of 05 this section or is licensed under this chapter and, before receipt, provides the common 06 or contract carrier with a copy of the person's current license issued by the department. 07 * Sec. 10. AS 43.50.105(d) is amended to read: 08 (d) If the cigarettes are transported by a common or contract carrier to a home 09 or residence, it is rebuttably presumed that the common or contract carrier knew that 10 the person receiving the cigarettes was not a person described under (b)(1) - (5) [(b)(1) 11 - (4)] of this section, unless the person shipping the cigarettes has satisfied the 12 requirements in (c)(1) of this section. 13 * Sec. 11. AS 43.50.105(e) is amended to read: 14 (e) A person, other than a common or contract carrier, may not knowingly 15 transport cigarettes to a person in this state, unless the person receiving the cigarettes 16 is a person described under (b)(1) - (5) [(b)(1) - (4)] of this section. 17 * Sec. 12. AS 43.50.105(g) is amended to read: 18 (g) A person who violates the provisions of this section is guilty of a 19 (1) class A misdemeanor if the person unlawfully ships, causes to be 20 shipped, or transports at least one but fewer than 5,000 [1,000] cigarettes; 21 (2) class C felony if the person unlawfully ships, causes to be shipped, 22 or transports 5,000 [1,000] or more cigarettes. 23 * Sec. 13. AS 43.50.105 is amended by adding a new subsection to read: 24 (i) A person who violates the provisions of this section is jointly and severally 25 liable for the taxes imposed by AS 43.50.090 and 43.50.190. To the fullest extent 26 permitted by the Constitution of the United States, a person who violates the 27 provisions of this section is required to collect the taxes and pay them to the 28 department. 29 * Sec. 14. AS 43.50.170(1) is amended to read: 30 (1) "buyer" means a person who imports or acquires cigarettes for the 31 person's own consumption from any source other than a manufacturer, distributor,
01 direct-buying retailer, [OR] retailer, or wholesaler-distributor; 02 * Sec. 15. AS 43.50.170(3) is amended to read: 03 (3) "direct-buying retailer" means a person who is engaged in the sale 04 of cigarettes at retail in this state [,] and who brings cigarettes or causes cigarettes to 05 be brought [CIGARETTES] into the state that are not purchased from a 06 wholesaler-distributor; 07 * Sec. 16. AS 43.50.170(4) is amended to read: 08 (4) "distributor" means a person who brings cigarettes that are not 09 purchased from a wholesaler-distributor, or has cigarettes that are not purchased 10 from a wholesaler-distributor brought, into the state, and who sells or distributes at 11 least 75 percent [PER CENT] of the cigarettes to others for resale in the state; 12 * Sec. 17. AS 43.50.170(12) is amended to read: 13 (12) "wholesaler-distributor" means a person outside this state who 14 sells or distributes cigarettes into this state, [AND] who is not required to be licensed 15 under AS 43.50.010, and who is licensed under AS 43.50.035. 16 * Sec. 18. AS 43.50.190(a) is repealed and reenacted to read: 17 (a) There is levied an excise tax on each cigarette imported or acquired in this 18 state, 19 (1) after December 31, 2004, but before July 1, 2006, 42 mills; 20 (2) after June 30, 2006, but before July 1, 2007, 52 mills; 21 (3) after June 30, 2007, 62 mills. 22 * Sec. 19. AS 43.50.190(c) is amended to read: 23 (c) The tax imposed under (a) of this section does not apply to the first 400 24 cigarettes personally transported into the state by an individual for that 25 individual's personal consumption [100 CIGARETTES IMPORTED BY AN 26 INDIVIDUAL FOR PERSONAL CONSUMPTION] during the calendar month. 27 * Sec. 20. AS 43.50.190 is amended by adding a new subsection to read: 28 (d) A portion of the annual proceeds of the tax levied under (a) of this section 29 equal to 8.9 percent of the total proceeds of the tax shall be deposited into the tobacco 30 use education and cessation fund established in AS 37.05.580. This deposit shall be in 31 addition to any sums deposited into the fund under AS 37.05.580(a).
01 * Sec. 21. AS 43.50 is amended by adding a new section to read: 02 Sec. 43.50.200. Nonparticipating manufacturer equity excise tax. (a) 03 There is levied an excise tax of 12.5 mills on each cigarette imported or acquired in 04 this state from a nonparticipating manufacturer. 05 (b) The tax levied by this section is in addition to the taxes levied by 06 AS 43.50.010 - 43.50.190. The tax shall be administered and collected in the same 07 manner as the taxes levied by AS 43.50.010 - 43.50.180, except that receipts from the 08 tax shall be deposited in the general fund. The penalties provided in AS 43.05 and this 09 chapter apply to the tax levied in this section. 10 (c) In this section, "nonparticipating manufacturer" means a tobacco product 11 manufacturer as defined in AS 45.53.100 that is not a participating manufacturer as 12 that term is defined in sec. II(jj) of the Master Settlement Agreement. 13 * Sec. 22. AS 43.50.500 is amended to read: 14 Sec. 43.50.500. Tax payment by use of stamps. A licensee shall pay the tax 15 imposed under AS 43.50.090(a), [AND] 43.50.190(a), and 43.50.200 through the use 16 of stamps issued under AS 43.50.500 - 43.50.700. 17 * Sec. 23. AS 43.50.530 is amended by adding a new subsection to read: 18 (c) The department may limit the number of stamps sold to a licensee during 19 the three months immediately preceding the effective date of a tax increase under 20 AS 43.50.090, 43.50.190, or 43.50.200 to minimize the amount of cigarette 21 stockpiling by a licensee. The department may not set the limit of stamps that a 22 licensee may purchase during that three-month period below an amount equal to three 23 times the average monthly stamp purchases made by the licensee during the 12-month 24 period immediately preceding that three-month period. 25 * Sec. 24. AS 43.50.540(f) is amended to read: 26 (f) Title to the stamps passes immediately to the licensee at the time the 27 stamps are obtained in person or, if the stamps are shipped or transported, at the time 28 the stamps are placed in the United States mail or received by the common or private 29 carrier. The licensee bears all costs associated with shipping or transporting the 30 stamps. The department may replace stamps lost or damaged in transit if the 31 licensee provides proof acceptable to the department verifying that the loss or
01 damage occurred while the stamps were in the possession of the shipping 02 company and the shipping company substantiates the loss or damage. Damaged 03 stamps must be returned to the department before the department may replace 04 them [AND ALL RISKS OF POSSIBLE LOSS OR DAMAGE WHILE IN 05 TRANSIT]. 06 * Sec. 25. AS 43.50.550(b) is amended to read: 07 (b) A licensee who submits an application for the purchase of stamps on a 08 deferred-payment basis shall, as a condition of approval of the application, post a 09 bond acceptable to the department in an amount equal to 10 (1) 200 percent of the maximum dollar amount of allowed monthly 11 purchases under this section ; or 12 (2) 100 percent of the maximum dollar amount of allowed monthly 13 purchases under this section if the licensee 14 (A) holds a license issued under AS 43.50.010 for a physical 15 location in this state; and 16 (B) has been in full compliance with the provisions of this 17 title and regulations adopted under this title during the preceding 60 18 months [AS A CONDITION OF APPROVAL OF THE APPLICATION]. 19 * Sec. 26. AS 43.50.580(b) is amended to read: 20 (b) A licensee may possess unstamped cigarettes in this state if 21 (1) the licensee posts a surety bond in an amount satisfactory to the 22 department to ensure performance of its duties under this chapter; and 23 (2) unstamped cigarettes are necessary for the conduct of the licensee's 24 business in making sales or distributions to 25 (A) an instrumentality of the federal government or an Indian 26 tribal organization authorized by law to possess cigarettes not taxed under this 27 chapter; or 28 (B) customers outside the state and the licensee provides 29 proof acceptable to the department that the licensee is properly licensed in 30 the jurisdictions outside the state where the sales or distributions are 31 made.
01 * Sec. 27. AS 43.50.590(a) is amended to read: 02 (a) The department shall adopt procedures for a refund or credit to a licensee 03 in the amount of the denominated value, less the discount given under AS 43.50.540, 04 for 05 (1) unused or damaged stamps; [OR] 06 (2) stamps affixed to cigarette packages that have become unfit for use 07 or sale, are destroyed, or are returned to the manufacturer for credit or replacement if 08 the licensee provides proof acceptable to the department that the cigarettes have not 09 been and will not be consumed in this state; or 10 (3) stamps affixed to cigarette packages that are sold or 11 distributed outside the state if the licensee provides proof acceptable to the 12 department that the cigarettes have not been and will not be consumed in this 13 state and the licensee is properly licensed in the jurisdictions outside the state 14 where the sales or distributions are made. 15 * Sec. 28. AS 43.50 is amended by adding a new section to read: 16 Sec. 43.50.625. Forfeiture of other property. (a) Upon a showing of 17 probable cause that a person has committed the crime of misconduct involving 18 unstamped cigarettes or stamps in the first degree under AS 43.50.640, the following 19 are subject to forfeiture: 20 (1) material and equipment used in the manufacture, sale, offering for 21 sale, or possession for sale of cigarettes in this state in violation of AS 43.50.500 - 22 43.50.640 or 43.50.660 - 43.50.700; 23 (2) aircraft, vehicles, or vessels used to transport or facilitate the 24 transportation of cigarettes manufactured, sold, offered for sale, or possessed for sale 25 in this state in violation of AS 43.50.500 - 43.50.640 or 43.50.660 - 43.50.700; 26 (3) money, securities, negotiable instruments, or other things of value 27 used in financial transactions derived from activity prohibited under AS 43.50.500 - 28 43.50.640 or 43.50.660 - 43.50.700. 29 (b) Property subject to forfeiture under this section may be actually or 30 constructively seized under an order issued by the superior court upon a showing of 31 probable cause that the property is subject to forfeiture under this section.
01 Constructive seizure is effected upon posting a signed notice of seizure on the item to 02 be forfeited, stating the violation and the date and place of seizure. Seizure without a 03 court order may be made if 04 (1) the seizure is incident to a valid arrest or search; 05 (2) the property subject to seizure is the subject of a prior judgment in 06 favor of the state; or 07 (3) there is probable cause to believe that the property is subject to 08 forfeiture under (a) of this section; property seized under this paragraph may be held 09 for not more than 48 hours unless an order of forfeiture is issued by the court before 10 the end of that time period. 11 (c) Within 30 days after a seizure under this section, the Department of Public 12 Safety shall make reasonable efforts to ascertain the identity and whereabouts of any 13 person holding an interest, or an assignee of a person holding an interest, in the 14 property seized, including a right to possession, or a lien, mortgage, or conditional 15 sales contract. The Department of Public Safety shall notify the person ascertained to 16 have an interest in the seized property of the impending forfeiture, and, before 17 forfeiture, the Department of Public Safety shall publish, once a week for four 18 consecutive calendar weeks, a notice of the impending forfeiture in a newspaper of 19 general circulation in the judicial district in which the seizure was made, or if a 20 newspaper is not published in that judicial district, in a newspaper published in the 21 state and distributed in that judicial district. 22 (d) Property subject to forfeiture under (a) of this section may be forfeited 23 (1) upon conviction of a person for a violation of AS 43.50.640; or 24 (2) upon judgment by the superior court in a proceeding in rem that the 25 property was used in a manner subjecting it to forfeiture under (a) of this section. 26 (e) The owner of property subject to forfeiture under (a) of this section is 27 entitled to relief from the forfeiture in the nature of remission of the forfeiture if, in an 28 action under (d) of this section, the owner shows that the owner 29 (1) was not a party to the violation; 30 (2) did not have actual knowledge or reasonable cause to believe that 31 the property was used or was to be used in violation of the law; and
01 (3) did not have actual knowledge or reasonable cause to believe that 02 the person committing the violation had, within the last 10 years, 03 (A) a criminal record for violating this chapter; or 04 (B) committed other violations of this chapter. 05 (f) The court may allow the owner of property that is subject to forfeiture 06 under (a) of this section to redeem the property by paying an amount determined by 07 the court to be the fair market value of the property. 08 (g) A person other than the owner holding, or the assignee of, a lien, 09 mortgage, or conditional sales contract on, or the right to possession, of property 10 subject to forfeiture under (a) of this section is entitled to relief from the forfeiture in 11 the nature of remission of the forfeiture if, in an action under (d) of this section, the 12 person shows that the person 13 (1) was not a party to the violation subjecting the property to 14 forfeiture; 15 (2) did not have actual knowledge or reasonable cause to believe that 16 the property was used or was to be used in violation of the law; and 17 (3) did not have actual knowledge or reasonable cause to believe that 18 the person committing the violation had, within the last 10 years, 19 (A) a criminal record for violating this chapter; or 20 (B) committed other violations of this chapter. 21 (h) It is not a defense in an in rem forfeiture proceeding brought under (d)(2) 22 of this section that a criminal proceeding is pending or has resulted in conviction or 23 acquittal of a person charged with violating AS 43.50.640. 24 (i) Property forfeited under this section shall be placed in the custody of the 25 commissioner of public safety for disposition according to an order entered by the 26 court. The court shall order destroyed any property forfeited under this section that is 27 harmful to the public and may order any property forfeited under this section that was 28 seized in a municipality to be transferred to the municipality in which the property was 29 seized or to another municipality affected by the crime for which the property was 30 forfeited. The state shall notify all municipalities affected by the crime of the 31 forfeiture proceeding. Other property shall be ordered sold and the proceeds used for
01 payment of expenses of the proceedings for forfeiture and sale, including expenses of 02 seizure, custody, and court costs. The remainder of the proceeds shall be deposited in 03 the general fund. 04 (j) The title to a vehicle or vessel forfeited to the state under this section may 05 be transferred by the state to a municipality or the local governing body of a village 06 for official use by the municipality or village, on condition that the vehicle or vessel 07 not be available for use by the defendant. 08 * Sec. 29. AS 43.50.640(a) is amended to read: 09 (a) A person commits the crime of misconduct involving unstamped cigarettes 10 or stamps in the first degree if the person 11 (1) with reckless disregard that the cigarettes are unstamped 12 (A) sells or distributes 5,000 [1,000] or more unstamped 13 cigarettes in a single transaction; 14 (B) owns or possesses 5,000 [1,000] or more unstamped 15 cigarettes with the intent to sell; or 16 (C) acquires, holds, transports, imports, or possesses 10,000 or 17 more unstamped cigarettes; or 18 (2) with reckless disregard that the stamp was previously affixed to 19 another cigarette package [;] 20 (A) affixes a previously used stamp to a cigarette package; or 21 (B) possesses, sells, or distributes a previously used stamp. 22 * Sec. 30. AS 43.50.650(a) is amended to read: 23 (a) A person commits the crime of misconduct involving unstamped cigarettes 24 or stamps in the second degree if the person 25 (1) with reckless disregard that the cigarettes are unstamped 26 (A) sells or distributes at least one but fewer than 5,000 [1,000] 27 unstamped cigarettes in a single transaction; 28 (B) owns or possesses at least one but fewer than 5,000 [1,000] 29 unstamped cigarettes, with intent to sell; [OR] 30 (C) acquires, holds, transports, imports, or possesses at least 31 601 [ONE] but fewer than 10,000 unstamped cigarettes; or
01 (D) acquires, holds, transports, imports, or possesses at 02 least one but fewer than 601 unstamped cigarettes that are not for 03 personal consumption; or 04 (2) is not licensed under this chapter or otherwise authorized by the 05 department to possess stamps and possesses a stamp that is not affixed to a cigarette 06 package. 07 * Sec. 31. AS 43.50.700(9) is amended to read: 08 (9) "unstamped cigarettes" means a package containing cigarettes that 09 is not affixed with the stamp required by AS 43.50.500 - 43.50.700 or is affixed with 10 a stamp in a denomination less than the tax levied under this chapter. 11 * Sec. 32. AS 43.50.710 is amended by adding a new subsection to read: 12 (e) Nothing in this section prohibits a manufacturer from offering promotions 13 to a wholesaler or a retailer if the wholesale promotion is the same for all participating 14 wholesalers and the retail promotion is the same for all participating retailers. 15 * Sec. 33. AS 43.50.720 is amended to read: 16 Sec. 43.50.720. Sale at less than cost; with gift or concession. In all 17 advertisements, offers for sale, or sales involving two or more items when at least one 18 of the items is cigarettes at a combined price, and in all advertisements, offers for sale, 19 or sales involving the giving of any gift, concession, or coupon of any kind in 20 conjunction with the sale of cigarettes, the wholesaler's or retailer's combined selling 21 price may not be below the actual cost to the wholesaler or the actual cost to the 22 retailer, respectively, of the total of all articles, products, commodities, gifts, and 23 concessions included in the transactions, except that, if any articles, products, 24 commodities, gifts, or concessions are not cigarettes, the actual [BASIC] cost shall be 25 determined as provided under AS 43.50.800. 26 * Sec. 34. AS 43.50.760(b) is amended to read: 27 (b) The presumptive actual [WHOLESALE AND PRESUMPTIVE RETAIL] 28 cost of cigarettes as determined by the department under AS 43.50.800 [FROM THE 29 MANUFACTURER'S PRICE LIST] is considered competent evidence in a court 30 action or proceeding as tending to prove actual cost to the wholesaler or retailer 31 complained against. A party against whom the presumptive actual [WHOLESALE
01 OR PRESUMPTIVE RETAIL] cost as determined by the department is introduced in 02 evidence has the right to offer evidence tending to prove any inaccuracy of the 03 presumptive actual [WHOLESALE OR PRESUMPTIVE RETAIL] cost or any 04 statement of facts that would impair its probative value. 05 * Sec. 35. AS 43.50.770 is amended to read: 06 Sec. 43.50.770. Determination of cost of cigarettes purchased outside of 07 ordinary channels of trade. In establishing the actual [BASIC] cost of cigarettes to 08 a wholesaler or retailer, the invoice cost [OR THE ACTUAL COST] of cigarettes 09 purchased at a forced, bankrupt, or closeout sale, or other sale outside the ordinary 10 channels of trade may not be used. 11 * Sec. 36. AS 43.50.790(a) is amended to read: 12 (a) The department 13 (1) shall administer AS 43.50.710 - 43.50.849; 14 (2) may adopt regulations relating to the administration and 15 enforcement of AS 43.50.710 - 43.50.849; 16 (3) may determine the actual [BASIC] cost of cigarettes to a 17 wholesaler or retailer as provided in AS 43.50.800 [FROM INFORMATION 18 OBTAINED FROM A MANUFACTURER]; 19 (4) may, after reasonable notice and hearing, revoke or suspend a 20 license issued under AS 43.50.010 or 43.50.035 to a person who refuses or neglects to 21 comply with a provision of AS 43.50.710 - 43.50.849. 22 * Sec. 37. AS 43.50.800 is repealed and reenacted to read: 23 Sec. 43.50.800. Presumptions applicable to determination of cost. (a) The 24 presumptive actual cost of cigarettes to a wholesaler is, for purposes of AS 43.50.710 - 25 43.50.849, the presumptive wholesale cost as calculated by the department plus an 26 amount equal to four and one-half percent of the presumptive wholesale cost to 27 account for business costs. For purposes of this section, the presumptive wholesale 28 cost is the manufacturer's list price, less trade discounts, plus the full face value of all 29 cigarette taxes. 30 (b) The presumptive actual cost of cigarettes to a retailer is, for purposes of 31 AS 43.50.710 - 43.50.849, the presumptive actual cost of cigarettes to the wholesaler
01 as calculated by the department under (a) of this section, plus an amount equal to six 02 percent of the presumptive actual cost of cigarettes to the wholesaler to account for 03 business costs. 04 (c) A wholesaler or retailer that wishes to advertise, offer to sell, or sell 05 cigarettes at less than the presumptive actual cost to the wholesaler or retailer as 06 calculated under (a) or (b) of this section must first obtain approval from the 07 department. The department may grant approval only if the wholesaler or retailer 08 provides proof satisfactory to the department that the wholesaler or retailer's actual 09 cost is lower than presumed. Approval for cigarette sales at less than the presumptive 10 actual cost as determined under (a) or (b) of this section may not be granted for a 11 period longer than one year. In reviewing proof of actual wholesale or retail cost, the 12 department may consider the costs reflected on the actual invoice, but may not 13 consider cash discounts. In reviewing proof of actual costs, the department may 14 consider the standards and methods of accounting regularly employed, and must 15 include labor costs, rent, depreciation, selling costs, maintenance of equipment, 16 delivery costs, all types of licenses, taxes, insurance, advertising, preopening 17 expenses, provision for impaired assets and closing costs, interest expenses, and 18 provision for merger and restructuring expenses. The department shall adopt 19 regulations to determine the actual costs for the wholesaler and retailer for the 20 purposes of AS 43.50.710 - 43.50.849. 21 * Sec. 38. AS 45.53.020(b) is amended to read: 22 (b) A tobacco product manufacturer that places money into escrow under 23 (a)(2) of this section is entitled to receive the interest or other appreciation on such 24 money as earned. Such money itself shall be released from escrow only under the 25 following circumstances: 26 (1) to pay a judgment or settlement on a released claim brought against 27 such tobacco product manufacturer by this state or a releasing party located or residing 28 in this state; the funds shall be released from escrow under this paragraph in the order 29 in which they were placed into escrow and only to the extent and at the time necessary 30 to make payments required under the judgment or settlement; 31 (2) to the extent that the tobacco product manufacturer establishes that
01 the amount that it was required to place into escrow on account of units sold in the 02 state in a particular year was greater than the Master Settlement Agreement 03 payments, as determined under sec. IX(i) of the Master Settlement Agreement, 04 including, after final determination of all adjustments, payments that the 05 manufacturer would have been required to make on account of those units had it 06 been a participating manufacturer [STATE'S ALLOCABLE SHARE OF THE 07 TOTAL PAYMENTS THAT THE MANUFACTURER WOULD HAVE BEEN 08 REQUIRED TO MAKE IN THAT YEAR UNDER THE MASTER SETTLEMENT 09 AGREEMENT HAD IT BEEN A PARTICIPATING MANUFACTURER, AS SUCH 10 PAYMENTS ARE DETERMINED UNDER SEC. IX(i)(2) OF THE MASTER 11 SETTLEMENT AGREEMENT AND BEFORE ANY OF THE ADJUSTMENTS OR 12 OFFSETS DESCRIBED IN SEC. IX(i)(3) OF THAT AGREEMENT OTHER THAN 13 THE INFLATION ADJUSTMENT], the excess shall be released from escrow and 14 revert back to that tobacco product manufacturer; or 15 (3) to the extent not released from escrow under (1) or (2) of this 16 subsection [SUBSECTIONS], funds placed into escrow shall be released from escrow 17 and revert back to the tobacco product manufacturer 25 years after the date on which 18 they were placed into escrow. 19 * Sec. 39. AS 45.53.020(b) is repealed and reenacted to read: 20 (b) A tobacco product manufacturer that places money into escrow under 21 (a)(2) of this section is entitled to receive the interest or other appreciation on such 22 money as earned. Such money itself shall be released from escrow only under the 23 following circumstances: 24 (1) to pay a judgment or settlement on a released claim brought against 25 such tobacco product manufacturer by this state or a releasing party located or residing 26 in this state; the funds shall be released from escrow under this paragraph in the order 27 in which they were placed into escrow and only to the extent and at the time necessary 28 to make payments required under the judgment or settlement; 29 (2) to the extent not released from escrow under (1) of this subsection, 30 funds placed into escrow shall be released from escrow and revert back to the tobacco 31 product manufacturer 25 years after the date on which they were placed into escrow.
01 * Sec. 40. AS 45.53.020(b) is repealed and reenacted to read: 02 (b) A tobacco product manufacturer that places money into escrow under 03 (a)(2) of this section is entitled to receive the interest or other appreciation on such 04 money as earned. Such money itself shall be released from escrow only under the 05 following circumstances: 06 (1) to pay a judgment or settlement on a released claim brought against 07 such tobacco product manufacturer by this state or a releasing party located or residing 08 in this state; the funds shall be released from escrow under this paragraph in the order 09 in which they were placed into escrow and only to the extent and at the time necessary 10 to make payments required under the judgment or settlement; 11 (2) to the extent that the tobacco product manufacturer establishes that 12 the amount that it was required to place into escrow in a particular year was greater 13 than the state's allocable share of the total payments that the manufacturer would have 14 been required to make in that year under the master settlement agreement had it been a 15 participating manufacturer, as such payments are determined under sec. IX(i)(2) of the 16 master settlement agreement and before any of the adjustments or offsets described in 17 sec. IX(i)(3) of that agreement other than the inflation adjustment, the excess shall be 18 released from escrow and revert back to that tobacco product manufacturer; or 19 (3) to the extent not released from escrow under (1) or (2) of this 20 subsection, funds placed into escrow shall be released from escrow and revert back to 21 the tobacco product manufacturer 25 years after the date on which they were placed 22 into escrow. 23 * Sec. 41. AS 45.53 is amended by adding a new section to read: 24 Sec. 45.53.050. Stays pending appeal in civil cases. (a) Except as provided 25 in (b) of this section, in order to secure and protect the money to be received as a result 26 of the Master Settlement Agreement, in civil tobacco-related litigation under any legal 27 theory involving a signatory, a successor of a signatory, or an affiliate of a signatory to 28 the Master Settlement Agreement, the supersedeas bond to be furnished in order to 29 stay the execution of the judgment during the entire course of appellate review shall be 30 set in accordance with applicable laws or court rules, except that the total bond that is 31 required of all appellants collectively may not exceed $100,000,000, regardless of the
01 value of the judgment. 02 (b) If an appellee proves by a preponderance of the evidence that an appellant 03 is dissipating assets to avoid the payment of a judgment, a court may require the 04 appellant to post a bond in an amount up to the full amount of the judgment. 05 * Sec. 42. The uncodified law of the State of Alaska enacted in sec. 4, ch. 48, SLA 1997, is 06 repealed and reenacted to read: 07 Sec. 4. AS 43.50.190(a) is repealed and reenacted to read: 08 (a) There is levied an excise tax on each cigarette imported or acquired in this 09 state, 10 (1) after December 31, 2004, but before July 1, 2006, 77.5 mills; 11 (2) after June 30, 2006, but before July 1, 2007, 87.5 mills; 12 (3) after June 30, 2007, 97.5 mills. 13 * Sec. 43. AS 43.50.740(b), 43.50.849(1), 43.50.849(6), and 43.50.849(7) are repealed. 14 * Sec. 44. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 INDIRECT COURT RULE AMENDMENT. AS 45.53.050, added by sec. 41 of this 17 Act, has the effect of changing Rules 204 and 205, Alaska Rules of Appellate Procedure, by 18 limiting the court's discretion to determine the amount of a supersedeas bond in certain cases. 19 * Sec. 45. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 APPLICABILITY. Section 41 of this Act applies to all cases pending on or filed on 22 or after the effective date of this Act. 23 * Sec. 46. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 SEVERABILITY. Under AS 01.10.030, if any provision of this Act or the application 26 of it to any person or circumstance is held invalid, the remainder of this Act and the 27 application to other persons or circumstances are not affected. 28 * Sec. 47. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 REVISOR'S INSTRUCTIONS. The revisor of statutes is instructed to change the 31 heading of Article 2 in AS 43.50 from "Additional Cigarette Tax" to "Additional Cigarette 32 Taxes."
01 * Sec. 48. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 CONDITIONAL EFFECT. (a) Section 39 of this Act takes effect only if 04 AS 45.53.020(b)(2), as amended in sec. 38 of this Act, is held by a court of competent 05 jurisdiction to be unconstitutional. 06 (b) Section 40 of this Act takes effect only if AS 45.53.020(b)(2), as amended in sec. 07 38 and in sec. 39 of this Act, are held by a court of competent jurisdiction to be 08 unconstitutional. 09 * Sec. 49. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 CONDITIONAL EFFECT. AS 45.53.050, added by sec. 41 of this Act, takes effect 12 only if sec. 44 of this Act receives the two-thirds majority vote of each house required by art. 13 IV, sec. 15, Constitution of the State of Alaska. 14 * Sec. 50. Section 1 this Act takes effect July 1, 2004. 15 * Sec. 51. If sec. 39 of this Act takes effect under sec. 48(a) of this Act, it takes effect on 16 the day after the date of a final order or decision by a court of competent jurisdiction holding 17 AS 45.53.020(b)(2), as amended in sec. 38 of this Act, to be unconstitutional. 18 * Sec. 52. If sec. 40 of this Act takes effect under sec. 48(b) of this Act, it takes effect on 19 the day after the date of a final order or decision by a court of competent jurisdiction holding 20 AS 45.53.020(b)(2), as amended in sec. 39 of this Act, to be unconstitutional. 21 * Sec. 53. Sections 8 - 11 of this Act take effect immediately under AS 01.10.070(c). 22 * Sec. 54. Except as provided in sec. 53 of this Act, this Act takes effect January 1, 2005.