HB 491 -- TOBACCO MASTER SETTLEMENT AGREEMENT

SPONSOR:  Diehl

COMMITTEE ACTION:  Voted "do pass" by the Committee on General
Laws by a vote of 9 to 4.

This bill changes the requirements regarding when funds can be
released from escrow accounts under the Tobacco Master Settlement
Agreement.  Funds can be released to the extent a tobacco
manufacturer establishes that the amount it was required to place
into escrow based on units sold in Missouri in a particular year
is greater than the payments from the agreement that the
manufacturer would have been required to make based on the units
sold if the manufacturer had been a participating manufacturer.

The bill contains an emergency clause.

FISCAL NOTE:  Estimated Net Income on General Revenue Fund of
$46,044 in FY 2012, $42,539 in FY 2013, and $43,054 in FY 2014.
No impact on Other State Funds in FY 2012, FY 2013, and FY 2014.

PROPONENTS:  Supporters say that the current escrow provision has
an unintended loophole that needs to be closed.  All other states
have already done so.  Companies who are taking advantage of this
loophole are only paying approximately 2% of their settlement
payments.

Testifying for the bill were Representative Diehl; Jon Rand;
Lewis, Rice and Fingersh, LLC; American Cancer Society; Dave
Rickard, Premier Manufacturing; Department of Revenue; Office of
the Attorney General; Missouri Hospital Association; March of
Dimes, Greater Missouri Chapter; Missouri Retailers Association;
American Lung Association of the Plains-Gulf Region; and
Associated Industries of Missouri.

OPPONENTS:  Those who oppose the bill say that Missouri is
currently fully compliant with the Tobacco Master Settlement
Agreement.  The bill is attempting to force a non-participating
member to be a part of an agreement in which it was not initially
a party.  The current language was not an unintended loophole.
The bill will lead to increased prices on the value-brand
products and will hurt growth opportunities of these Missouri
businesses.

Testifying against the bill were Ryan McNutt, Midwest Petroleum
Company; Mike Jones, Jones Oil; LeAnne Moore, National Tobacco
Company, L.P.; UGAS, Incorporated; Keith Burdick, Xcaliber
International, Ltd.; and Chuck Hatfield, Cheyenne International,
LLC.

Missouri House of Representatives
96th General Assembly, 1st Regular Session
Last Updated August 9, 2011 at 1:21 pm