TAXATION OF TOBACCO PRODUCTS
A CONCURRENT RESOLUTION ENACTING AND ORDERING THE SUBMISSION TO THE PEOPLE OF A MEASURE RELATING TO TAXATION OF TOBACCO PRODUCTS.


A CONCURRENT RESOLUTION


ENACTING AND ORDERING THE SUBMISSION TO THE PEOPLE OF A MEASURE RELATING TO TAXATION OF TOBACCO PRODUCTS.



(TEXT OF BILL BEGINS ON NEXT PAGE)



Be it resolved by the House of Representatives of the State of Arizona, the Senate concurring:

1. Under the power of the referendum, as vested in the Legislature, the following measure, relating to the taxation of tobacco products, is enacted to become valid as a law if approved by the voters and on proclamation of the Governor:

AN ACT

CHANGING THE ARTICLE HEADING OF TITLE 36, CHAPTER 6, ARTICLE 8, ARIZONA REVISED STATUTES, TO "TOBACCO TAX FUNDS"; AMENDING TITLE 36, CHAPTER 6, ARTICLE 8, ARIZONA REVISED STATUTES, BY ADDING SECTION 36-770; REPEALING SECTION 36-772, ARIZONA REVISED STATUTES; AMENDING TITLE 36, CHAPTER 6, ARTICLE 8, ARIZONA REVISED STATUTES, BY ADDING A NEW SECTION 36-772 AND SECTIONS 36-776, 36-777 AND 36-778; AMENDING TITLE 42, CHAPTER 3, ARTICLE 6, ARIZONA REVISED STATUTES, BY ADDING SECTION 42-3251.01; AMENDING SECTION 42-3302, ARIZONA REVISED STATUTES; RELATING TO TOBACCO TAXES.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Heading change

The article heading of title 36, chapter 6, article 8, Arizona Revised Statutes, is changed from "TOBACCO TAX AND HEALTH CARE FUND" to "T

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TAXATION OF TOBACCO PRODUCTS
A CONCURRENT RESOLUTION ENACTING AND ORDERING THE SUBMISSION TO THE PEOPLE OF A MEASURE RELATING TO TAXATION OF TOBACCO PRODUCTS.


A CONCURRENT RESOLUTION


ENACTING AND ORDERING THE SUBMISSION TO THE PEOPLE OF A MEASURE RELATING TO TAXATION OF TOBACCO PRODUCTS.



(TEXT OF BILL BEGINS ON NEXT PAGE)



Be it resolved by the House of Representatives of the State of Arizona, the Senate concurring:

1. Under the power of the referendum, as vested in the Legislature, the following measure, relating to the taxation of tobacco products, is enacted to become valid as a law if approved by the voters and on proclamation of the Governor:

AN ACT

CHANGING THE ARTICLE HEADING OF TITLE 36, CHAPTER 6, ARTICLE 8, ARIZONA REVISED STATUTES, TO "TOBACCO TAX FUNDS"; AMENDING TITLE 36, CHAPTER 6, ARTICLE 8, ARIZONA REVISED STATUTES, BY ADDING SECTION 36-770; REPEALING SECTION 36-772, ARIZONA REVISED STATUTES; AMENDING TITLE 36, CHAPTER 6, ARTICLE 8, ARIZONA REVISED STATUTES, BY ADDING A NEW SECTION 36-772 AND SECTIONS 36-776, 36-777 AND 36-778; AMENDING TITLE 42, CHAPTER 3, ARTICLE 6, ARIZONA REVISED STATUTES, BY ADDING SECTION 42-3251.01; AMENDING SECTION 42-3302, ARIZONA REVISED STATUTES; RELATING TO TOBACCO TAXES.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Heading change

The article heading of title 36, chapter 6, article 8, Arizona Revised Statutes, is changed from "TOBACCO TAX AND HEALTH CARE FUND" to "TOBACCO TAX FUNDS".

Sec. 2. Title 36, chapter 6, article 8, Arizona Revised Statutes, is amended by adding section 36-770, to read:

36-770. Tobacco products tax fund

A. THE TOBACCO PRODUCTS TAX FUND IS ESTABLISHED CONSISTING OF REVENUES DEPOSITED IN THE FUND PURSUANT TO SECTION 42-3251.01 AND INTEREST EARNED ON THOSE MONIES. THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION SHALL ADMINISTER THE FUND.

B. FORTY-TWO CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE PROPOSITION 204 PROTECTION ACCOUNT ESTABLISHED BY SECTION 36-778.

C. FIVE CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE HEALTH RESEARCH FUND ESTABLISHED BY SECTION 36-275.

D. TWENTY-SEVEN CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE MEDICALLY NEEDY ACCOUNT ESTABLISHED BY SECTION 36-774.

E. TWENTY CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE EMERGENCY HEALTH SERVICES ACCOUNT ESTABLISHED BY SECTION 36-776.

F. FOUR CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE HEALTH CARE ADJUSTMENT ACCOUNT ESTABLISHED BY SECTION 36-777.

G. TWO CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE HEALTH EDUCATION ACCOUNT ESTABLISHED BY SECTION 36-772.

H. EXCEPT AS PROVIDED IN SECTION 36-776, MONIES IN THE FUND:

1. ARE CONTINUOUSLY APPROPRIATED.

2. DO NOT REVERT TO THE STATE GENERAL FUND.

3. ARE EXEMPT FROM THE PROVISIONS OF SECTION 35-190 RELATING TO LAPSING OF APPROPRIATIONS.

Sec. 3. Repeal

Section 36-772, Arizona Revised Statutes, is repealed.

Sec. 4. Title 36, chapter 6, article 8, Arizona Revised Statutes, is amended by adding a new section 36-772, to read:

36-772. Health education account; audit; reports

A. IN ADDITION TO THE MONIES DEPOSITED PURSUANT TO SECTION 36-770, TWENTY-THREE CENTS OF EACH DOLLAR IN THE TOBACCO TAX AND HEALTH CARE FUND SHALL BE DEPOSITED IN THE HEALTH EDUCATION ACCOUNT FOR PROGRAMS FOR THE PREVENTION AND REDUCTION OF TOBACCO USE, THROUGH PUBLIC HEALTH EDUCATION PROGRAMS, INCLUDING COMMUNITY BASED EDUCATION, CESSATION, EVALUATION AND OTHER PROGRAMS TO DISCOURAGE TOBACCO USE AMONG THE GENERAL POPULATION AS WELL AS MINORS AND CULTURALLY DIVERSE POPULATIONS.

B. THE DEPARTMENT OF HEALTH SERVICES SHALL ADMINISTER THE ACCOUNT.

C. EXCEPT AS PROVIDED IN SUBSECTION D OF THIS SECTION, MONIES THAT ARE DEPOSITED IN THE HEALTH EDUCATION ACCOUNT:

1. SHALL BE USED TO SUPPLEMENT MONIES THAT ARE APPROPRIATED BY THE LEGISLATURE FOR HEALTH EDUCATION PURPOSES AND SHALL NOT BE USED TO SUPPLANT THOSE APPROPRIATED MONIES.

2. SHALL BE SPENT FOR THE FOLLOWING PURPOSES:

(a) CONTRACTS WITH COUNTY HEALTH DEPARTMENTS, QUALIFYING COMMUNITY HEALTH CENTERS AS DEFINED IN SECTION 36-2907.06, INDIAN TRIBES, ACCREDITED SCHOOLS, NONPROFIT ORGANIZATIONS, COMMUNITY COLLEGES AND UNIVERSITIES FOR EDUCATION PROGRAMS RELATED TO PREVENTING AND REDUCING TOBACCO USE.

(b) ADMINISTRATIVE EXPENDITURES RELATED TO IMPLEMENTING AND OPERATING A PROGRAM DEVELOPED PURSUANT TO SUBDIVISION (a) TO AWARD AND OVERSEE CONTRACTS FOR EDUCATION PROGRAMS INCLUDING OBTAINING EXPERT SERVICES TO ASSIST IN EVALUATING REQUESTS FOR PROPOSALS AND RESPONSES TO THOSE REQUESTS.

(c) DEPARTMENT OF HEALTH SERVICES EXPENDITURES FOR DEVELOPING AND DELIVERING EDUCATION PROGRAMS THAT ARE DESIGNED TO PREVENT OR REDUCE TOBACCO USE INCLUDING RADIO, TELEVISION OR PRINT MEDIA COSTS. WHEN CONTRACTING FOR THE DEVELOPMENT AND PRODUCTION OF ORIGINAL ADVERTISING MATERIALS, THE DEPARTMENT SHALL REQUIRE ADVERTISING, PRODUCTION AND EDITORIAL FIRMS TO USE THEIR BEST EFFORTS TO EMPLOY OR CONTRACT WITH RESIDENTS OF THIS STATE TO MANAGE, PRODUCE AND EDIT THE ORIGINAL ADVERTISING. THE DEPARTMENT SHALL REPORT ANNUALLY BY DECEMBER 1 TO THE GOVERNOR, THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES REGARDING INSTANCES WHEN THE DEPARTMENT DID NOT EMPLOY OR CONTRACT WITH RESIDENTS OF THIS STATE, INCLUDING THE REASONS FOR FAILING TO DO SO.

(d) THE EVALUATIONS REQUIRED BY SUBSECTION F OF THIS SECTION.

D. THE DEPARTMENT OF HEALTH SERVICES SHALL USE MONIES DEPOSITED IN THE ACCOUNT PURSUANT TO SECTION 36-770 FOR THE PREVENTION AND EARLY DETECTION OF THE FOUR LEADING DISEASE RELATED CAUSES OF DEATH IN THIS STATE, AS PERIODICALLY DETERMINED BY THE CENTERS FOR DISEASE CONTROL AND PREVENTION, OR ITS SUCCESSOR AGENCY. INITIALLY, THESE ARE CANCER, HEART DISEASE, STROKE AND PULMONARY DISEASE. THE MONIES SHALL ONLY BE USED TO SUPPLEMENT MONIES THAT ARE APPROPRIATED BY THE LEGISLATURE AND SHALL NOT BE USED TO SUPPLANT THOSE APPROPRIATED MONIES.

E. MONIES FROM THE HEALTH EDUCATION ACCOUNT SHALL NOT BE SPENT FOR LOBBYING ACTIVITIES INVOLVING ELECTED OFFICIALS OR POLITICAL CAMPAIGNS FOR INDIVIDUALS OR ANY BALLOT MEASURE.

F. THE DEPARTMENT OF HEALTH SERVICES SHALL EVALUATE THE PROGRAMS ESTABLISHED PURSUANT TO SUBSECTION C, PARAGRAPH 2 OF THIS SECTION AND SHALL BIENNIALLY SUBMIT A WRITTEN REPORT OF ITS FINDINGS TO THE GOVERNOR, THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES. THE DEPARTMENT OF HEALTH SERVICES SHALL PROVIDE A COPY OF EACH REPORT TO THE SECRETARY OF STATE AND THE DIRECTOR OF THE ARIZONA STATE LIBRARY, ARCHIVES AND PUBLIC RECORDS. THE DEPARTMENT OF HEALTH SERVICES SHALL SUBMIT ITS FIRST REPORT ON OR BEFORE NOVEMBER 15, 2004. THE FIRST REPORT SHALL INCLUDE DATA BEGINNING IN FISCAL YEAR 2001-2002.

Sec. 5. Title 36, chapter 6, article 8, Arizona Revised Statutes, is amended by adding sections 36-776, 36-777 and 36-778, to read:

36-776. Emergency health services account

A. THE EMERGENCY HEALTH SERVICES ACCOUNT IS ESTABLISHED CONSISTING OF MONIES DEPOSITED PURSUANT TO SECTION 36-770. THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION SHALL ADMINISTER THE ACCOUNT. THE ADMINISTRATION SHALL USE ACCOUNT MONIES SOLELY FOR THE REIMBURSEMENT OF UNCOMPENSATED CARE, PRIMARY CARE SERVICES AND TRAUMA CENTER READINESS COSTS.

B. MONIES IN THE ACCOUNT ARE SUBJECT TO LEGISLATIVE APPROPRIATION. ANY MONIES REMAINING UNEXPENDED AND UNENCUMBERED ON JUNE 30 OF EACH YEAR IN THE ACCOUNT REVERT TO THE PROPOSITION 204 PROTECTION ACCOUNT ESTABLISHED BY SECTION 36-778.

36-777. Health care adjustment account

A. THE HEALTH CARE ADJUSTMENT ACCOUNT IS ESTABLISHED CONSISTING OF MONIES DEPOSITED PURSUANT TO SECTION 36-770. THE DEPARTMENT OF REVENUE SHALL ADMINISTER THE ACCOUNT.

B. THE DEPARTMENT OF REVENUE SHALL TRANSFER APPROPRIATE AMOUNTS OF ACCOUNT MONIES TO THE HEALTH EDUCATION ACCOUNT ESTABLISHED BY SECTION 36-772, THE HEALTH RESEARCH ACCOUNT ESTABLISHED BY SECTION 36-773 AND THE MEDICALLY NEEDY ACCOUNT ESTABLISHED BY SECTION 36-774 TO COMPENSATE FOR DECREASES IN THESE ACCOUNTS DUE TO LOWER TOBACCO TAX REVENUES AVAILABLE UNDER SECTION 36-771 AS A RESULT OF THE LEVY OF LUXURY TAXES THAT ARE DEDICATED TO THE TOBACCO PRODUCTS TAX FUND PURSUANT TO SECTION 42-3251.01.

C. ANY MONIES IN THE ACCOUNT IN EXCESS OF THE AMOUNT NEEDED FOR THE ADJUSTMENTS PRESCRIBED IN THIS SECTION REVERT TO THE TOBACCO PRODUCTS TAX FUND FOR DISTRIBUTION IN EQUAL AMOUNTS TO THE ACCOUNTS DESCRIBED IN SECTION 36-770, SUBSECTIONS B, C, D AND E.

36-778. Proposition 204 protection account

A. THE PROPOSITION 204 PROTECTION ACCOUNT IS ESTABLISHED CONSISTING OF MONIES DEPOSITED PURSUANT TO SECTION 36-770. THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION SHALL ADMINISTER THE ACCOUNT.

B. THE ADMINISTRATION SHALL USE ACCOUNT MONIES TO IMPLEMENT AND FUND PROGRAMS AND SERVICES REQUIRED AS A RESULT OF THE EXPANDED DEFINITION OF AN ELIGIBLE PERSON PRESCRIBED IN SECTION 36-2901.01.

C. THE ADMINISTRATION SHALL SPEND THE BALANCE OF MONIES IN THE ACCOUNT BEFORE IT SPENDS MONIES FROM THE ARIZONA TOBACCO LITIGATION SETTLEMENT FUND ESTABLISHED BY SECTION 36-2901.02.

Sec. 6. Title 42, chapter 3, article 6, Arizona Revised Statutes, is amended by adding section 42-3251.01, to read:

42-3251.01. Levy and collection of tobacco tax

A. IN ADDITION TO THE TAXES IMPOSED BY SECTION 42-3251, PARAGRAPHS 1 THROUGH 5, THERE IS LEVIED AND SHALL BE COLLECTED AN ADDITIONAL TAX OF ONE AND ONE-HALF TIMES THE TAX PRESCRIBED IN THAT SECTION ON JANUARY 1, 2002.

B. MONIES COLLECTED PURSUANT TO THIS SECTION SHALL BE DEPOSITED, PURSUANT TO SECTIONS 35-146 AND 35-147, IN THE TOBACCO PRODUCTS TAX FUND ESTABLISHED BY SECTION 36-770.

Sec. 7. Section 42-3302, Arizona Revised Statutes, is amended to read:

42-3302. Levy; rates; disposition of revenues

A. In addition to all other taxes, there is levied and shall be collected by the department a tax on the purchase on an Indian reservation of cigarettes, cigars, smoking tobacco, plug tobacco, snuff and other forms of tobacco at the rates prescribed by section SECTIONS 42-3251 AND 42-3251.01.

B. The department shall deposit, pursuant to sections 35-146 and 35-147, monies levied and collected pursuant to subsection A of this section in the tobacco tax and health care fund established by section 36-771 AND THE TOBACCO PRODUCTS TAX FUND ESTABLISHED BY SECTION 36-770 for use as prescribed by title 36, chapter 6, article 8.

C. If an Indian tribe imposes a luxury, sales, transaction privilege or similar tax on cigarettes, cigars, smoking tobacco, plug tobacco, snuff and other forms of tobacco but at a rate that is:

1. Less than that prescribed by subsection A of this section, the tax imposed by this article shall be levied at a rate equal to the difference between the rate prescribed by subsection A of this section and the tax imposed by the Indian tribe.

2. Equal to or greater than the tax prescribed by subsection A of this section, then the rate of tax under this article is zero.

Sec. 8. Tobacco revenue use, spending and tracking commission; membership; duties

A. On or before January 1, 2004, the legislature shall establish a tobacco revenue use, spending and tracking commission.

B. The commission shall include members that have expertise in the following:

1. Public health services.

2. Tobacco cessation or tobacco addiction programs.

3. School-based tobacco education programs.

4. Marketing or public relations.

5. Research and evaluation of public health programs.

C. The commission shall advise and consult with the department of health services on the goals, objectives and activities of programs that receive monies pursuant to section 36-772, Arizona Revised Statutes.

Sec. 9. Conditional enactment; effect of other ballot measures; intent of measure

A. This measure does not become effective if another measure presented to the voters in this election that deals with the levy and collection of an additional tax on tobacco products receives more votes than this measure.

B. It is the intent of this measure to prescribe the only levy and collection of an additional tax on tobacco products in this election.

Sec. 10. Transfer of monies

Any monies in the health education account on the effective date of the repeal of section 36-772, Arizona Revised Statutes, are transferred to the health education account established by section 4 of this act.

2. The Secretary of State shall submit this proposition to the voters at the next general election as provided by article IV, part 1, section 1, Constitution of Arizona. [Link]

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