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House Bill 3536 |
House Author: Otto et al. |
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Effective: 9-1-13 |
Senate Sponsor: Hinojosa |
House Bill 3536 amends the Health and Safety Code to impose a fee on the sale, use, consumption, or distribution in Texas of the cigarettes and cigarette tobacco products of a manufacturer that did not sign a tobacco settlement agreement. The bill sets the rate of the fee at 2.75 cents for each non-settling manufacturer cigarette and each 0.09 ounces of non-settling manufacturer cigarette tobacco product sold, used, consumed, or distributed in Texas during the 2013 calendar year and, beginning in January 2014, requires the comptroller of public accounts each January to compute that calendar year's rate by increasing the preceding calendar year's rate by the greater of three percent or the rate of inflation for that preceding calendar year as indicated by the annual percentage change in the Consumer Price Index for All Urban Consumers. The bill also sets a reduced rate of 0.75 cents per cigarette or ounce, rather than 2.75 cents, on the cigarettes and cigarette tobacco products of a subsequent participating manufacturer for calendar months beginning before the effective date of a credit amendment to the master tobacco settlement agreement but makes such a manufacturer's cigarettes and cigarette tobacco products subject to the same rates as apply to a non-settling manufacturer's cigarettes and cigarette tobacco products on and after the amendment's effective date.
House Bill 3536 sets out additional reporting requirements for a distributor required to file a monthly report to the comptroller for purposes of the cigarette tax and cigars and tobacco products tax, which also must include the fee imposed under the bill's provisions. The bill entitles a distributor that remits the monthly fee to a stamping allowance of three percent of the face value of all stamps purchased for providing the service of affixing stamps to cigarette packages. The bill requires the comptroller, for purpose of assisting distributors in calculating the monthly fee, to publish and maintain on the comptroller's Internet website a list of the names and brand families of settling manufacturers; a list of each non-settling manufacturer that is a subsequent participating manufacturer or is not a subsequent participating manufacturer; and the effective date of any credit amendment.
House Bill 3536 requires a non-settling manufacturer whose cigarettes or cigarette tobacco products were not offered for sale or distribution in Texas before September 1, 2013, to provide a report containing specific information to the attorney general before offering that non‑settling manufacturer's cigarettes or products for sale or distribution in Texas and requires the attorney general to make the information provided available to the comptroller.
House Bill 3536 sets out penalties for noncompliance with respect to a non-settling manufacturer's cigarettes and cigarette tobacco products that are sold, used, consumed, or distributed in Texas in violation of the bill's provisions, requires a non-settling manufacturer to appoint and engage a resident agent for service of process, and entitles the comptroller or attorney general to conduct reasonable periodic audits or inspections of the financial records of a non-settling manufacturer and its distributors to ensure compliance with the bill's provisions.
House Bill 3536 requires the comptroller, on request, to report annually to the independent auditor or other applicable entities the itemized volume of cigarettes on which the fee is paid; requires revenue from the fee imposed under the bill's provisions to be deposited to the credit of the general revenue fund; and requires all such fees paid to apply on a dollar‑for‑dollar basis to reduce any judgment or settlement on a released claim brought against the manufacturer that made the payment.