South Carolina General Assembly
117th Session, 2007-2008

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H. 5225

STATUS INFORMATION

General Bill
Sponsors: Reps. Herbkersman and Erickson
Document Path: l:\council\bills\ggs\22134mm08.doc

Introduced in the House on May 28, 2008
Currently residing in the House Committee on Ways and Means

Summary: Cigarette tax

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
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   5/28/2008  House   Introduced and read first time HJ-73
   5/28/2008  House   Referred to Committee on Ways and Means HJ-74

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

5/28/2008

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-21-625 SO AS TO IMPOSE A SURTAX ON EACH CIGARETTE IN AN AMOUNT OF TWO AND EIGHT-TENTHS CENTS, PROVIDE FOR THE CREDITING OF THE REVENUE FROM THE SURTAX TO THE SMOKING PREVENTION AND CESSATION TRUST FUND, THE CANCER SCREENING TRUST FUND, THE HEALTH CARE ENHANCEMENT TRUST FUND, AND THE SENIOR CARE AND NURSING TRAINING TRUST FUND, PROVIDE FOR REPORTING, PAYMENT, COLLECTION, AND ENFORCEMENT OF THE SURTAX, AND DEFINE "CIGARETTE"; TO AMEND SECTION 12-21-620, RELATING TO THE ORIGINAL CIGARETTE TAX, SO AS TO CONFORM DEFINITIONS; BY ADDING SECTION 11-11-230 SO AS TO CREATE AND ESTABLISH IN THE STATE TREASURY THE SMOKING PREVENTION AND CESSATION TRUST FUND, THE CANCER SCREENING TRUST FUND, THE HEALTH CARE ENHANCEMENT TRUST FUND, AND THE SENIOR CARE AND NURSING TRAINING TRUST FUND, ALL SO AS TO RECEIVE DEPOSITS OF THE REVENUES FROM THE CIGARETTE SURTAX AS SPECIFIED; TO PROHIBIT THE EXCESSIVE PURCHASE OF CIGARETTES FOR RESALE IN ANTICIPATION OF THE APPLICATION OF THE SURTAX; AND TO CREATE A STUDY COMMITTEE ON HEALTH CARE ACCESS AND AFFORDABILITY, PROVIDE FOR ITS MEMBERSHIP, AND REQUIRE A REPORT ON ITS FINDINGS AND RECOMMENDATIONS BY JANUARY 1, 2010.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Article 5, Chapter 21, Title 12 of the 1976 Code is amended by adding:

"Section 12-21-625.    (A)    Effective July 1, 2008, there is imposed a surtax on cigarettes subject to the tax imposed pursuant to Section 12-21-620(1) in an amount equal to two and eight-tenths cents on each cigarette.

(B)    Notwithstanding another provision of law providing for the crediting of the revenues of license or other taxes, the revenue of the surtax imposed pursuant to this section must be credited as follows:

(1)    each year, five million dollars to the Smoking Prevention and Cessation Trust Fund created pursuant to Section 11-11-230(A); and

(2)    of the remaining annual revenue, one-third to the Cancer Screening Trust Fund created pursuant to Section 11-11-230(B), one-third to the Health Care Enhancement Trust Fund created pursuant to Section 11-11-230(C), and one-third to the Senior Care and Nursing Training Trust Fund created pursuant to 11-11-230(D).

(C)    For all purposes of reporting, payment, collection, and enforcement, the surtax imposed by this section is deemed to be imposed pursuant to Section 12-21-620.

(D)    For purposes of this section, 'cigarette' means:

(1)    any roll for smoking containing tobacco wrapped in paper or in any substance other than a tobacco leaf; or

(2)    any roll for smoking containing tobacco, wrapped in any substance, weighing three pounds per thousand or less, however labeled or named, which because of its appearance, size, 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 described in item (1)."

SECTION    2.    Section 12-21-620 of the 1976 Code is amended to read:

"Section 12-21-620.    (A)    There shall be levied, assessed, collected, and paid in respect to the articles containing tobacco enumerated in this section the following amounts:

(1)    upon all cigarettes made of tobacco or any substitute for tobacco, three and one-half mills on each cigarette;

(2)    upon all tobacco products, as defined in Section 12-21-800, five percent of the manufacturer's price.

Manufacturer's price as used in this section is the established price at which a manufacturer sells to a wholesaler.

(B)    As used in this section, 'cigarette' means:

(1)    any roll for smoking containing tobacco wrapped in paper or in any substance other than a tobacco leaf; or

(2)    any roll for smoking containing tobacco, wrapped in any substance, weighing three pounds per thousand or less, however labeled or named, which because of its appearance, size, 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 described in item (1) of this subsection."

SECTION    3.    Article 1, Chapter 11, Title 11 of the 1976 Code is amended by adding:

"Section 11-11-230.    (A)    There is created in the State Treasury the Smoking Prevention and Cessation Trust Fund. This fund is separate and distinct from the general fund of the State and all other funds. Earnings and interest on this fund must be credited to it and any balance in this fund at the end of a fiscal year carries forward in the fund in the succeeding fiscal year. The trust fund must transfer five million dollars annually to the Department of Health and Environmental Control to administer a statewide smoking prevention and cessation program.

(B)    There is created in the State Treasury the Cancer Screening Trust Fund. This fund is separate and distinct from the general fund of the State and all other funds. Earnings and interest on this fund must be credited to it and any balance in this fund at the end of a fiscal year carries forward in the fund in the succeeding fiscal year. The State Treasurer shall transfer the funds to the Department of Health and Human Services quarterly to provide cancer screening services.

(C)    There is created in the State Treasury the Health Care Enhancement Trust Fund. This fund is separate and distinct from the general fund of the State and all other funds. Earnings and interest on this fund must be credited to it and any balance in this fund at the end of a fiscal year carries forward in the fund in the succeeding fiscal year. The trust fund must transfer the appropriate amount of money annually to the Department of Health and Human Services to administer the Health Care Enhancement program.

(D)    There is created in the State Treasury the Senior Care and Nursing Training Trust Fund. This fund is separate and distinct from the general fund of the State and all other funds. Earnings on this fund must be credited to it and any balance in this fund at the end of a fiscal year carries forward in the fund in the succeeding fiscal year. The State Treasurer shall make a transfer from the Senior Care and Nursing Training Trust Fund to the Department of Health and Environmental Control to administer the programs."

SECTION    4.    In April, May, and June of 2008, neither a wholesaler, distributor, or a retailer of cigarettes may purchase more cigarettes in any one month in an amount that exceeds one hundred ten percent of the average monthly amount of cigarettes purchased in the same three months of the previous calendar year. In examining aggregate business license tax revenue data, if the Department of Revenue determines that the revenue collected in April, May, and June of 2008 exceeds one hundred ten percent of the amount collected during the same three months of the previous calendar year, the business license tax audit division of the department shall conduct an audit of random wholesalers, distributors, and retailers to ensure compliance with the requirements of this section. Any violation of this section shall result in a civil fine equal to five times the amount of tax owed on the purchased cigarettes that caused the wholesaler, distributor, or retailer to exceed one hundred ten percent of the amount purchased in the same three months of the previous calendar year.

SECTION    5.    (A)    There is created the Study Committee on Health Care Access and Affordability. The committee shall review and make recommendations regarding the state's overall health status, the price of health care, the use of Medicare and Medicaid, the promotion of public and private health care partnerships, preventative care, the establishment of a high risk health care pool, the necessity of a reinsurance program, how to maximize coverage while controlling costs and providing quality care, and how to improve the state's overall health and health care affordability.

(B)    The study committee shall be composed of nine members. The President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Governor shall each appoint three members. The Governor must appoint one member based upon the recommendation of the Health Sciences South Carolina collaborative. Each member must have a background of substantial duration or expertise in at least one of the following:

(1)    health care issues;

(2)    business issues;

(3)    economic issues;

(4)    consumer issues;

(5)    insurance issues;

(6)    academic issues; or

(7)    governmental issues.

(C)    The study committee shall make a report of its findings and recommendations to the General Assembly no later than January 1, 2010, at which time the study committee must be dissolved.

SECTION    6.    Except where otherwise provided, this act takes effect upon approval by the Governor.

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