Cigarette regulations pass

Regulations intended to keep the state in compliance with an agreement with tobacco manufacturers were approved May 23.

LB590, introduced by Grand Island Sen. Mike Gloor, changes laws regulating tobacco licenses, tobacco sales, cigarette taxes, the state directory of cigarettes, escrow deposits under the Master Settlement Agreement and reporting requirements.

The Master Settlement Agreement was entered into on Nov. 23, 1998, between the state and tobacco product manufacturers. Tobacco manufacturers who are not party to the agreement are called nonparticipating manufacturers.

Among other provisions, enforcement measures in the bill include:

• requiring nonparticipating manufacturers to post bond and certify they have posted such bond;
• holding importers liable for escrow deposits of nonparticipating manufacturers;
• requiring nonparticipating manufacturers to make escrow payments on a quarterly basis;
• increasing the frequency of stamping agent reports and holding agents liable for nonparticipating manufacturers escrow payments if their products are stamped;
• revoking stamping agent licenses for inadequate reporting, outstanding escrow deposits or sales of unstamped cigarettes;
• requiring cigarette manufacturers and importers to report all sales into Nebraska within 15 days;
• removing manufacturers from the state directory that fail to submit required reports; and
• revoking stamp agent licenses and removing manufacturers from the state directory for violations of similar laws in other states.

The bill authorizes the state to negotiate a compact with Native American tribes regarding tobacco products. Agreements must include provisions to require that tribal taxes are imposed equally on all cigarettes and other tobacco products. Agreements also must require that all cigarette packages bear the state stamp or a tribal stamp and prohibit the sale of cigarettes not included in the state directory unless the cigarettes include a tribal stamp and the tribe makes escrow deposits.

Senators voted 48-0 to pass LB590.