04/26/2004 09:01 AM Senate FIN

                                                                                                                                
     SENATE BILL NO. 368                                                                                                        
     "An Act relating  to taxes on cigarettes and  tobacco products;                                                            
     relating  to tax stamps on cigarettes;  relating to  forfeiture                                                            
     of  cigarettes  and  of  property   used  in the  manufacture,                                                             
     transportation,  or sale of unstamped  cigarettes; relating  to                                                            
     licenses  and  licensees  under  the  Cigarette  Tax  Act;  and                                                            
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This  was the third  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  this bill,  sponsored by  the Senate  Rules                                                            
Committee at the  request of the Governor, "increases  the cigarette                                                            
tax from a  dollar a pack of 20 cigarettes  to two dollars  per pack                                                            
and tobacco  tax from  75 percent  to 100 percent  of the  wholesale                                                            
cost. In addition, SB 368  allows the Department of Public Safety to                                                            
seize and  dispose of  assets used  in cigarette  smuggling and  tax                                                            
evasion activities."                                                                                                            
                                                                                                                                
Co-Chair  Wilken noted CS  SB 378 23-GS2116\I  incorporates  the six                                                            
amendments  adopted  at the  previous  hearing  and makes  no  other                                                            
changes.                                                                                                                        
                                                                                                                                
Senator Hoffman commented this is a "bad, bad bill."                                                                            
                                                                                                                                
Co-Chair Green expressed  concern about the forfeiture provisions of                                                            
this legislation.  She stressed the important to decide  whether the                                                            
intent of this legislation  is to generate revenue for the State, or                                                            
for advocacy  groups, or  to change behavior.  She stated she  would                                                            
oppose this bill.                                                                                                               
                                                                                                                                
Senator Bunde  offered a motion to  report SB 368, as amended,  from                                                            
Committee with  individual recommendations  and accompanying  fiscal                                                            
notes.                                                                                                                          
                                                                                                                                
Without  objection SB  368 (FIN)  MOVED from  Committee with  fiscal                                                            
note #1 for $828,100 from  the Department of Revenue and fiscal note                                                            
#2 for $206,400 from the Department of Public Safety.