2001 SESSION

01-0217

01/09

HOUSE BILL 709-FN-A-LOCAL

COMMITTEE: Ways and Means

ANALYSIS

This bill increases the rate of the cigarette tax and dedicates revenues raised by the increase to the senior prescription drug discount program.

This bill provides for the elimination of the cigarette tax increase in the event the federal government establishes a prescription drug program for the elderly.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

01-0217

01/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand One

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Cigarette Tax Increased. Amend RSA 78:7 to read as follows:

78:7 Tax Imposed. A tax upon the retail consumer is hereby imposed at the rate of [52] 54 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state. The payment of the tax shall be evidenced by affixing stamps to the smallest packages containing the tobacco products in which such products usually are sold at retail. The word "package" as used in this section shall not include individual cigarettes. No tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States.

2 Distribution of Funds. Amend RSA 78:32 to read as follows:

78:32 Distribution of Funds.

I.(a) The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 37 cents and less than 53 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state imposed by RSA 78:7 and shall certify such amount to the state treasurer by October 1 of each year for deposit in the education trust fund established by RSA 198:39.

[II.](b) The commissioner shall make quarterly estimates of the amount of additional revenues that will be produced by such increase in tax rate for the next fiscal year and shall certify such amount to the state treasurer for deposit in the education trust fund established by RSA 198:39. Such estimates shall be certified on June 1, September 1, December 1, and March 1 of each year.

II. The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 52 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state imposed by RSA 78:7 and shall certify such amount to the state treasurer by June 30 of each year for deposit in the senior prescription drug discount program fund, established by RSA 161-F:76.

3 New Subdivision; Senior Prescription Drug Discount Program Fund. Amend RSA 161-F by inserting after section 75 the following new subdivision:

Senior Prescription Drug Discount Program Fund

161-F:76 Senior Prescription Drug Discount Program Fund. There is hereby established a special fund for the senior prescription drug discount program. The sole purpose of the fund shall be to increase the prescription reimbursement dispensing fee to pharmacists for such program, and said money shall not be used for any other purpose. Tobacco tax revenues certified under RSA 78:32, II shall be deposited into the fund. Such moneys shall be in addition to any other funds received by the department for the purposes of the senior prescription drug discount program. Moneys in the fund shall be nonlapsing and continually appropriated to the commissioner of the department of health and human services.

4 Prescription Drugs; Department of Health and Human Services. Amend RSA 126-A:3, V to read as follows:

V. Pharmacists [shall] may substitute generically equivalent drug products for all legend and non-legend prescriptions paid for by the department of health and human services, including the medicaid program, unless the prescribing practitioner specifies that the brand name drug product is medically necessary. Such notification shall be in the practitioner's own handwriting and shall be retained in the pharmacist's file. The commissioner may waive the application of RSA 126-A:3, III if the commissioner determines such action is necessary to ensure the availability of prescription and other pharmaceutical services to persons served by the department or to avert serious economic hardship in the provision of prescriptions and other pharmaceutical services. The commissioner shall adopt rules under RSA 541-A relative to a waiver of the application. The commissioner, in consultation with pharmacy providers, may develop a new methodology for medical assistance reimbursement for legend and non-legend drugs.

5 Reference Change; Education Trust Fund. Amend RSA 198:39, I (d) to read as follows:

(d) Funds collected and paid over to the state treasurer by the department of revenue administration pursuant to RSA 78:32, I, relative to tobacco taxes.

6 New Subparagraph; Senior Prescription Drug Discount Program. Amend RSA 6:12, I by inserting after subparagraph (dddd) the following new subparagraph:

(eeee) Tobacco tax revenues certified under RSA 78:32, II which shall be deposited into the senior prescription drug discount program fund, established under RSA 161-F:76.

7 Applicability. Section 1 of this act shall apply to all persons licensed under RSA 78:2. Such persons shall inventory all taxable tobacco products in their possession and file a report of such inventory with the department of revenue administration on a form prescribed by the commissioner within 20 days after the effective date of this act. The tax rate effective July 1, 2001 shall apply to such inventory and the difference, if any, in the amount paid previously on such inventory and the current effective rate of tax shall be paid with the inventory form. The inventory form shall be treated as a tax return for the purpose of computing penalties under RSA 21-J.

8 Cigarette Tax Increased. Amend RSA 78:7 to read as follows:

78:7 Tax Imposed. A tax upon the retail consumer is hereby imposed at the rate of [54] 52 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state. The payment of the tax shall be evidenced by affixing stamps to the smallest packages containing the tobacco products in which such products usually are sold at retail. The word "package" as used in this section shall not include individual cigarettes. No tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States.

9 Distribution of Funds. Amend RSA 78:32 to read as follows:

78:32 Distribution of Funds.

I.[(a)] The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 37 cents [and less than 53 cents] for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state imposed by RSA 78:7 and shall certify such amount to the state treasurer by October 1 of each year for deposit in the education trust fund established by RSA 198:39.

II.[(b)] The commissioner shall make quarterly estimates of the amount of additional revenues that will be produced by such increase in tax rate for the next fiscal year and shall certify such amount to the state treasurer for deposit in the education trust fund established by RSA 198:39. Such estimates shall be certified on June 1, September 1, December 1, and March 1 of each year.

[II. The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 52 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state imposed by RSA 78:7 and shall certify such amount to the state treasurer by June 30 of each year for deposit in the senior prescription drug discount program fund, established by RSA 161-F:76.]

10 Prescription Drugs; Department of Health and Human Services. Amend RSA 126-A:3, V to read as follows:

V. Pharmacists [may] shall substitute generically equivalent drug products for all legend and non-legend prescriptions paid for by the department of health and human services, including the medicaid program, unless the prescribing practitioner specifies that the brand name drug product is medically necessary. Such notification shall be in the practitioner's own handwriting and shall be retained in the pharmacist's file. The commissioner may waive the application of RSA 126-A:3, III if the commissioner determines such action is necessary to ensure the availability of prescription and other pharmaceutical services to persons served by the department or to avert serious economic hardship in the provision of prescriptions and other pharmaceutical services. The commissioner shall adopt rules under RSA 541-A relative to a waiver of the application. The commissioner, in consultation with pharmacy providers, may develop a new methodology for medical assistance reimbursement for legend and non-legend drugs.

11 Reference Change; Education Trust Fund. Amend RSA 198:39, I (d) to read as follows:

(d) Funds collected and paid over to the state treasurer by the department of revenue administration pursuant to RSA 78:32, [I,] relative to tobacco taxes.

12 Applicability. Section 7 of this act shall apply to all persons licensed under RSA 78:2. Such persons shall inventory all taxable tobacco products in their possession and file a report of such inventory with the department of revenue administration on a form prescribed by the commissioner within 20 days after the effective date of this act. The tax rate effective on the effective date of this section shall apply to such inventory and the difference, if any, in the amount paid previously on such inventory and the current effective rate of tax shall be paid with the inventory form. The inventory form shall be treated as a tax return for the purpose of computing penalties under RSA 21-J.

13 Repeals. The following are repealed:

I. RSA 6:12, I(eeee), relative to the senior prescription drug discount program fund.

II. RSA 161-F:76, relative to the senior prescription drug discount program fund.

14 Contingency. Sections 8-13 of this act shall take effect 6 months after any federal prescription drug program takes effect as certified by the commissioner of the department of health and human services to the director of legislative services.

15 Effective Date.

I. Sections 8-13 of this act shall take effect as provided in section 14 of this act.

II. The remainder of this act shall take effect July 1, 2001.

LBAO

01-0217

2/14/01

HB 709-FN-A-LOCAL - FISCAL NOTE

FISCAL IMPACT: