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2005 SESSION
052938316Be it enacted by the General Assembly of Virginia:
1. That §§ 32.1-366 and 32.1-367 of the Code of Virginia are amended and reenacted, and that the Code of Virginia is amended by adding in Chapter 10 of Title 58.1 an article numbered 2.2, consisting of sections numbered 58.1-1021.06 through 58.1-1021.10 as follows:
§ 32.1-366. Virginia Health Care Fund established.
A. There is hereby created in the state treasury a special nonreverting fund to be known as the Virginia Health Care Fund, hereafter referred to as the "Fund." The Fund shall be established on the books of the Comptroller and any moneys remaining in the Fund at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. For purposes of the Comptroller's preliminary and final annual reports required by § 2.2-813, however, all deposits to and disbursements from the Fund shall be accounted for as part of the general fund of the state treasury.
B. All revenue received by the Commonwealth pursuant to the
provisions of §§ 58.1-1001 and 58.1-1018 and Article Articles 2.1
(§ 58.1-1021.01 et seq.) and 2.2 (§ 58.1-1021.06 et seq.) of Chapter 10
of Title 58.1 shall be paid into the state treasury and deposited to the Fund.
The Comptroller shall also deposit 40 percent of the Commonwealth's allocation
pursuant to the Master Settlement Agreement with tobacco product manufacturers,
as defined in § 3.1-1106, to the Fund. The Fund shall also consist of all
recoveries received during a fiscal year resulting from expenditures incurred
in the Medicaid program during a prior fiscal year or years to the extent that
such amounts represent recoveries of state funds that would otherwise be
deposited to the general fund of the state treasury.
§ 32.1-367. Uses of Virginia Health Care Fund.
Moneys deposited to the Fund shall be used solely for the provision of health care services. Such moneys shall be appropriated as provided in the general appropriation act; provided that the revenues generated under § 58.1-1021.10 deposited into the Fund shall be applied to payments for medical assistance as defined in 42 U.S.C. § 1396d. Health care services include, but are not limited to, Medicaid payments, disease diagnosis, prevention and control, and community health services.
§ 58.1-1021.06. Definitions.
As used in this article, unless the context requires a different meaning:
"Cigarette" means the same as that term is defined in § 3.1-336.1.
"Tobacco product manufacturer" means the same as that term is defined in § 3.1-336.1.
"Master Settlement Agreement" means the same as that term is defined in § 3.1-336.1.
"Nonparticipating manufacturer" means a tobacco product manufacturer that is not a participating manufacturer.
"Participating manufacturer" means a tobacco product manufacturer that is a party to the Master Settlement Agreement.
"Stamping agent" means the same as that term is defined in § 3.1-336.3.
§ 58.1-1021.07. Excise tax on cigarettes sold in the Commonwealth.
In addition to all other taxes and fees imposed by law, there is hereby levied and imposed on every tobacco product manufacturer an excise tax of two cents on each cigarette it manufactured for which a stamping agent affixed Virginia tax stamps in the calendar year or otherwise paid the tax under Article 1 (§ 58.1-1000 et seq.) or Article 2 (§ 58.1-1018 et seq.) of this chapter for such cigarette in the calendar year. The tax shall be imposed with respect to all cigarettes stamped and sold in the Commonwealth on or after July 1, 2005.
§ 58.1-1021.08. Payment of the tax.
A. By May 31, 2006, and by May 31 in every following year, the Tax Commissioner shall provide a written certification to the tobacco product manufacturer of the cigarettes it manufactured for which a stamping agent affixed Virginia tax stamps or otherwise paid the tax under Article 1 (§ 58.1-1000 et seq.) or Article 2 (§ 58.1-1018 et seq.) of this chapter in the immediately preceding calendar year. For purposes of providing such certification, the Tax Commissioner may use the information, certification, invoices, and other documentation required under §§ 3.1-336.4 and 3.1-336.8 or any other information it has collected or received as provided under law relating to the sale of cigarettes.
B. The tobacco product manufacturer shall file a return and shall pay and remit to the Department the two cents per cigarette excise tax for the number of cigarettes described in subsection A as determined by the Tax Commissioner in the written certification. The tobacco product manufacturer shall pay and remit the tax due to the Tax Commissioner for such cigarettes by June 30 immediately following the May 31 written certification in each calendar year. The return for payment of the tax shall be developed by the Tax Commissioner.
C. A participating manufacturer may claim as credit against the tax due under this article the amount of payments that the manufacturer made under the Master Settlement Agreement for cigarettes sold in the Commonwealth for the calendar year for which the tax is imposed. A nonparticipating manufacturer may claim as credit against the tax due under this article the amount that the manufacturer paid into a qualified escrow fund, for the calendar year for which the tax is imposed, for cigarettes sold in the Commonwealth pursuant to § 3.1-336.2. However, the amount paid into the qualified escrow fund shall be reduced by any amount released from escrow in such year on account of subdivision B 2 of § 3.1-336.2, and the credit shall equal the net amount paid into the qualified escrow fund.
58.1-1021.09. Failure to file return; fraudulent return; penalties; interest.
A. When any tobacco product manufacturer fails to make any return or pay the full amount of the tax required under this article, there shall be imposed a specific penalty to be added to the tax in the amount of 5 percent of the tax if the failure is for not more than 1 month, with an additional 2 percent for each additional month, or fraction thereof, during which the failure continues, not to exceed 20 percent in the aggregate. In no case, however, shall the penalty be less than $250 or more than $10,000 for any yearly return or tax due and the $250-minimum penalty shall apply whether or not any tax is due for the period for which such return was required. If such failure is due to providential or other good cause shown to the satisfaction of the Tax Commissioner, the return with or without remittance may be accepted exclusive of penalties. In the case of a false or fraudulent return where willful intent exists to defraud the Commonwealth of any tax due under this article, or in the case of a willful failure to file a return with the intent to defraud the Commonwealth of any such tax, a specific penalty of 25 percent of the amount of the certified tax, but not to exceed $20,000 for any yearly return or tax due, shall be assessed. All penalties and interest imposed under this article shall be payable by the tobacco product manufacturer and collectible by the Department in the same manner as if they were a part of the tax imposed.
B. Interest at a rate determined in accordance with § 58.1-15shall accrue on the tax until the same is paid. If the Department determines that the amount of tax imposed by this article and certified by the Tax Commissioner has not been paid by a tobacco product manufacturer by the due date, the Department shall assess that tobacco product manufacturer with the deficiency, including penalty and interest, in a written assessment as soon as practical.
No deficiency, interest, or penalty shall be assessed for any year after the expiration of 3 years from the date set for the filing of the return for such year, except in cases of fraud, or where no return has been filed for such year.
§ 58.1-1021.10. Distribution of revenues.
The revenues generated by the excise tax imposed under this article shall be collected by the Department and deposited into the Virginia Health Care Fund established under § 32.1-366 and shall be applied to payments for medical assistance as defined in 42 U.S.C. § 1396d.
2. That the Tax Commissioner shall develop and publish guidelines for purposes of implementing the excise tax provided under this act and shall make such guidelines available to the public no later than September 1, 2005. The development of such guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.) of the Code of Virginia.
3. That if any clause, sentence, paragraph, section, or part of this act or the application thereof to any person, entity, or circumstance is adjudged invalid by any court of competent jurisdiction, such judgment shall not affect the validity of the remainder thereof but shall be confined to the clause, sentence, paragraph, section, or part thereof directly involved in the controversy in which such judgment shall have been rendered, and to this end the provisions of this act are severable.