new text begin Subdivision 1. new text end

new text begin Imposition of fee. new text end

new text begin A cigarette cost
mitigation fee is imposed on and collected from cigarette
distributors to recover for the state health costs related to or
caused by smoking and to reduce smoking, particularly by youths.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin The definitions under section
297F.01 apply to this section.
new text end

new text begin Subd. 3. new text end

new text begin Computation of fee. new text end

new text begin (a) The legislature shall
biennially set the amount of the fee by law based on an estimate
of the health costs to the state of cigarette smoking. The fee
for fiscal year 2006 and for each succeeding fiscal year is
$50,000,000 until modified by law.
new text end

new text begin (b) For each fiscal year, the commissioner shall determine
each cigarette distributor's fee and notify the distributor by
the first day of May preceding the beginning of the fiscal
year. A distributor's fee is determined by multiplying the
total fee under paragraph (a) by a fraction, the numerator of
which is the number of tax stamps purchased by the distributor
under chapter 297F in the calendar year ending during the
previous fiscal year and the denominator of which is the total
number of tax stamps purchased under chapter 297F in that period
by all distributors.
new text end

new text begin Subd. 4. new text end

new text begin Successors in interest; new entrants. new text end

new text begin (a) A
"distributor" includes any individual or entity that is the
successor in interest to a distributor, including any entity
that has substantially acquired the business assets of a
distributor. The successor in interest is liable for the fee
under this section. The commissioner shall calculate and impose
the fee on a successor in interest on a basis that includes the
purchases of tax stamps by its predecessor, as well as any
purchases made by the successor entity or person itself, during
the relevant period.
new text end

new text begin (b) If a distributor did not purchase tax stamps for at
least 500,000 cigarettes in each month of the calendar year
ending during the previous fiscal year, the fee under this
section must be applied at the rate under subdivision 6 for the
fiscal year. The commissioner shall notify the distributor that
its fee will be calculated and imposed under this paragraph by
the first day of May preceding the fiscal year and the
distributor shall pay the fee with each of its monthly tax
returns filed under section 297F.09 for the fiscal year.
new text end

new text begin Subd. 5. new text end

new text begin Payment. new text end

new text begin A distributor must pay the fee in
equal monthly installments in the same time and manner as
provided for payment of tax under chapter 297F. The
commissioner shall bill distributors for the fee. This may be
done at the time the commissioner notifies the distributor of
its annual liability for the fee or at another time or in a
manner the commissioner determines to be adequate and
appropriate.
new text end

new text begin Subd. 6. new text end

new text begin Fee on use of unstamped cigarettes. new text end

new text begin (a) The
commissioner shall estimate the average rate of the fee under
this section on a per cigarette basis for each fiscal year to
which the fee applies. The commissioner shall publish this rate
in the State Register by June 15 preceding the beginning of the
fiscal year.
new text end

new text begin (b) Any person, other than a distributor, that purchases or
possesses cigarettes that have not been stamped or taxed under
chapter 297F is liable for the fee under this section on the
possession or use of those cigarettes at the rate published in
the State Register for the fiscal year.
new text end

new text begin Subd. 7. new text end

new text begin Administration. new text end

new text begin The audit, assessment,
interest, appeal, refund, and collection provisions applicable
to the taxes imposed under chapter 297F apply to the fee imposed
under this section.
new text end

new text begin Subd. 8. new text end

new text begin License revocation. new text end

new text begin (a) The commissioner may
revoke or suspend the license of a distributor for failure to
pay the fee or otherwise comply with the requirements under this
section. The provisions and procedures under section 297F.04
apply to a suspension or revocation under this subdivision.
new text end

new text begin (b) The commissioner may revoke a retailer's sales or use
tax permit under section 297F.185 if:
new text end

new text begin (1) the retailer, directly or indirectly, purchases for
resale 20,000 cigarettes or more from a distributor that has not
paid the fee under this section; and
new text end

new text begin (2) the commissioner has notified the person that the
distributor has not paid the fee before the purchase was made or
the commissioner has posted notice that the distributor is in
violation of the fee law on the department's Web site at least
15 days before the sale was made.
new text end

new text begin Subd. 9. new text end

new text begin Deposit of revenues. new text end

new text begin The commissioner shall
deposit the revenues from the fee under this section in the
health care access fund.
new text end

new text begin Subd. 10.new text end

new text begin Exemption; administrative procedure act.new text end

new text begin The
commissioner's calculations of the fee amounts under this
section are not subject to the provisions of the Administrative
Procedure Act, chapter 14.
new text end