An Act To Reduce Tobacco Use and Improve Health (AFfER DEADLINE)
Maine Legislature, Session 122, LD 1617
Committee: Taxation
Sponsors: CUMMINGS, PINGREE
Amends: 36 MRSA §4365, 36 MRSA §4365-E, 36 MRSA §4365-F, 36 MRSA §4366-A, 36 MRSA §4366-D, 36 MRSA §4385

Legislative Document 
No. 1617 
H.P.1140 
House of Representatives, May 3,2005 
An Act To Reduce Tobacco Use and Improve Health 
(AFfER DEADLINE) 
(EMERGENCY) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
205. 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative CUMMINGS of Portland. 
Cosponsored by Representative: PINGREE of North Haven. 
Printed on recycled paper 
!r/~ 
/J1.7I/ac~ 
MILLICENT M. MacFARLAND 
Clerk 
Emergency preamble. Whereas, acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, the health of the citizens of the State of Maine is 
of paramount interest; and 
Whereas, this legislation provides a source of funding for 
health care programs integral to the health of Maine citizens; and 
Whereas, in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §4365. as amended by PL 2003, c. 705, §6, is 
further amended to read: 
§4365. 
Rate of tax 
A tax is imposed on all cigarettes imported into this State 
or held in this State by any person for sale at the rate of 41-
~ 
mills for each cigarette. 
Payment of the tax is evidenced by 
the affixing of stamps to the packages containing the cigarettes. 
Sec. 2. 36 MRSA §4365-E, as enacted by PL 2001, c. 439, Pt. 
SSSS, §2, is repealed. 
Sec.3. 36 MRSA §4365-F is enacted to read: 
§4365-F. 
Application of cigarette tax rate increase effective 
July 1. 2005 
The following provisions apply to cigarettes held for resale 
on July 1, 2005. 
1. 
St.~4_raj;,e. __ Ci.gja£ettes 
stampec1 at 
th~Lat~Q~5Q 
mills per cigarette and held for resale after June 30, 2005 are 
subject to tax at the rate of 125 mills per cigarette. 
2. 
Liability. 
A person possessing cigarettes for resale is 
liable for the difference between the tax rate of 125 mills per 
cigarette and the tax rate of 50 mills per cigarette in effect 
before July 1, 
2005. 
Stamps 
indicating payment 
of 
the 
tax 
imposed by this section must be affixed to all packages of 
cigarettes held for resale as of July 1, 
2005, 
except that 
cigarettes held in vending machines 
as of that date do 
not 
require that stamp. 
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3. 
Vending~chineJi. 
Notwithstanding any other provision 
of this chapter, 
it is presumed that all ,cigarette vending 
machines are filled to capacity on July 1, 2005 and that the tax 
imposed by this section must be reported on that basis. 
A credit 
against this inventory tax must be allowed for cigarett~~ stamped 
at the rate of 50 mills per cigarette placed in vending machines 
before July 1, 2005. 
4. 
pa,yment. 
Payment of the tax imposed by this section 
ID~st be made to the State Tax Assessor by October 1, 
2005, 
accompanied by forms prescribed by the assessor. 
Sec. 4. 36 MRSA §4366-A, sub-§2, "A and 8, as enacted by PL 
2001, c. 439, Pt. SSSS, §3, are amended to read: 
A. 
For stamps at the face value of 67 5Q mills sold through 
Sep~emBe~-6gT-6gg*T-6T9% June 30, 2005, 2.03%; and 
B. 
For stamps at the face value of 47 125 mills sold p~ie~ 
~e-JQ*Y-*T-6gg6T-6T*9%f-aRe on or after July 1, 2005, 1.15%. 
Sec. 5. 36 MRSA §4366-A, sub-§2, ,C, as enacted by PL 2001, c. 
439, Pt. SSSS, §3, is repealed. 
Sec. 6. 36 MRSA §4366-D, as enacted by PL 2001, c. 450, Pt. 
D, §1, is repealed. 
Sec. 7. 36 MRSA §4385 is enacted to read: 
§4385. 
Distribution of cigarette tax revenue 
A portion of the revenue generated from the tax imposed 
pursuant to section 4365 must 
be 
allocated annually by 
the 
Commissioner of Health and Human Services to the health-related 
purposes specified in this section. 
1. 
Partnership for a Tobacco-Free Maine and Beal thy Maine 
Partnerships. 
To 
support the work of the Partnership for 
a 
Tobacco-Free Maine and the Heal thy Maine Partnerships, or their 
successor programs, $14,837,000 of the revenue generated pursuant 
to section 4365 must be distributed annually to the following 
programs in the following amounts: 
A. 
To create and maintain a website for interactive tobacco 
treatment counseling, $250,000; 
B. 
To enhance administration and enforcement of existing 
state programs to prevent youth in the State from gaining 
access to 
tobacco 
and to protect them 
from exposure to 
secondhand smoke, $457,000; 
C. 
To increase the number of school health coordinators 
across the State, $11,630,000; and 
D. 
To cover the costs associated with the recommendations 
of 
the 
Commission 
to 
Study 
Public 
Health 
related 
to 
encouraging healthy diets and physical fitness among youth, 
including educational campaigns, $2,500,000. 
2. 
CQnmunll~.=b.ilLe~rQ~a.ms. 
To 
enhance 
communi ty-based 
disease 
prevention 
and 
health promotion, 
$11,660,000 
of 
the 
revenue generated pursuant to section 4365 must be distributed 
annually to the following programs in the following amounts: 
A. 
To increase the number of school-based health centers 
across the State, $2,160,000; 
5. 
To provide primary health care to low-income uninsured 
and underinsured patients in medically underseryed areas of 
the State, $3,000,000; and 
C. 
To implement the disease prevention and health promotio~ 
provisions of the State Health Plan described under Title 2, 
chapter 5 at the community level, $6,500,000. 
3. 
Other. 
The sum of $50,000,000 from revenue generated 
pursuant 
to 
section 
4365 
must 
be 
distributed 
annually 
to 
~alth-related programs other than those listed in subsections 1 
and 2, including for support and stabilization of MaineCare. 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect July 1, 2005. 
SUMMARY 
This bill increases the cigarette excise tax from 
$1 to 
$2.50 per pack and allocates the new revenue to a var iety of 
heal th-related 
purposes. 
It 
also 
reduces 
accordingly 
the 
percentage discount paid to distributors for tax stamps that the 
distributors purchase and affix. 
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