Arizona Tobacco Tax and Healthcare Act, Proposition 200 (1994)

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Proposition 200, known commonly as the Tobacco Tax and Healthcare Act was on the November 8, 1994 ballot in Arizona as a citizen-initiated state statute. It was approved.

The measure raised the state tobacco tax, including products sold on Indian reservations with exemption given to those sold to enrolled members of the tribe. The revenue was designed to provide healthcare for the medically needy and low income children and fund tobacco related education and research.[1]

Election results

Arizona Proposition 200 (1994)
ResultVotesPercentage
Approveda Yes 565,094 50.80%
No547,18949.20%

Official results via: Arizona Secretary of State

Text of measure

The text of the ballot read:

OFFICIAL TITLE

Proposed by initiative petition
Amending Title 42, Chapter 7, Arizona revised statutes, by adding Articles 1.2 and 1.3; relating to tobacco taxes to provide for health care services for the medically needy, medically indigent, and low income children, tobacco related education and research and adjustment to corrections fund, use of tax monies to supplement existing funds and levels of service, tobacco tax levy on Indian reservations and related exemptions; and providing for severability.

DESCRIPTIVE TITLE

An act requiring an increase in state tax on cigarettes, cigars and other tobacco products, including those sold on Indian reservations, exempting those sold to enrolled members of the Indian tribe to provide health care for the medically indigent, medically needy or low income children, tobacco related education and research.[1][2]

Constitutional changes

Be it enacted by the people of the State of Arizona:
The following amendments to provide for a tobacco tax for health care purposes are proposed to become valid when approved by a majority of the qualified electors voting thereon and on proclamation of the governor:
Section 1. Declaration of policy
A. The people of Arizona believe it is in the best interest of Arizona to establish state funds dedicated to provide health care programs and services, such as health care services for medically needy, medically indigent persons and low income children, education for the prevention and reduction of tobacco use and tobacco related disease and addiction research.
B. It is the intention and desire of the people of Arizona in enacting this measure by initiative that the funds provided hereby are in addition to and separate from other funds that are now and shall be annually appropriated by the legislature. The funds provided hereby shall not be deemed or classed to be appropriations by the legislature.
Sec. 2. Title 42, Chapter 7, Arizona Revised Statutes, is amended by adding Article 1.2, to read:
ARTICLE 1.2. TOBACCO TAX FOR HEALTH CARE PURPOSES
42-1241. Levy and collection of tax; establishment of fund and accounts; purposes; administration; distribution
A. IN ADDITION TO ALL OTHER TAXES, AND IN ADDITION TO THE TAX LEVIED AND IMPOSED BY SECTIONS 42-1204 AND 42-1231, THERE IS LEVIED AND SHALL BE COLLECTED BY THE DEPARTMENT AND PAID TO THE STATE TREASURER IN THE MANNER PROVIDED BY ARTICLE 1 OF THIS CHAPTER ON ALL CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO THE FOLLOWING TAX:
1. ON EACH CIGARETTE, 2 CENTS.
2. ON SMOKING TOBACCO, SNUFF, FINE CUT CHEWING TOBACCO, CUT AND GRANULATED TOBACCO, SHORTS AND REFUSE OF FINE CUT CHEWING TOBACCO, AND REFUSE, SCRAPS, CLIPPINGS, CUTTINGS AND SWEEPINGS OF TOBACCO, EXCLUDING TOBACCO POWDER OR TOBACCO PRODUCTS USED EXCLUSIVELY FOR AGRICULTURAL OR HORTICULTURAL PURPOSES AND UNFIT FOR HUMAN CONSUMPTION, 4.5 CENTS PER OUNCE OR MAJOR FRACTION THEREOF.
3. ON ALL CAVENDISH, PLUG OR TWIST TOBACCO, 1.1 CENTS PER OUNCE OR FRACTIONAL PART THEREOF.
4. ON EACH TWENTY SMALL CIGARS OR FRACTIONAL PART THEREOF WEIGHING NOT MORE THAN THREE POUNDS PER THOUSAND, 8.9 CENTS.
5. ON CIGARS OF ALL DESCRIPTIONS EXCEPT THOSE INCLUDED IN PARAGRAPH 4 OF THIS SUBSECTION, MADE OF TOBACCO OR ANY SUBSTITUTE THEREFOR, IF MANUFACTURED TO RETAIL AT NOT MORE THAN 5 CENTS EACH, 4.4 CENTS ON EACH THREE CIGARS, BUT IF MANUFACTURED TO RETAIL AT MORE THAN 5 CENTS EACH, 4.4 CENTS ON EACH CIGAR.
B. THE TOBACCO TAX AND HEALTH CARE FUND IS ESTABLISHED IN THE STATE TREASURY. THE FUND SHALL CONSIST OF ALL REVENUES DEPOSITED THEREIN PURSUANT TO THIS ARTICLE AND ARTICLE 1.3 AND INTEREST EARNED ON THOSE MONIES. THE STATE TREASURER SHALL DEPOSIT ALL MONIES RECEIVED UNDER THIS SECTION INTO THIS FUND. THE STATE TREASURER SHALL INVEST MONIES IN THE FUND AND ALL ACCOUNTS THEREIN AS PROVIDED BY SECTION 35-311. THE STATE TREASURER SHALL CREDIT MONIES EARNED FROM THESE INVESTMENTS TO THE FUND.
C. THE FUND SHALL BE DEPOSITED IN FOUR SEPARATE ACCOUNTS AND SHALL BE ADMINISTERED AS SET FORTH BELOW FOR THE FOLLOWING PURPOSES, SUBJECT TO THE PROVISIONS OF SECTION 42-1242:
1. TWENTY-THREE CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE HEALTH EDUCATION ACCOUNT FOR PROGRAMS FOR THE PREVENTION AND REDUCTION OF TOBACCO USE, THROUGH PUBLIC HEALTH EDUCATION PROGRAMS, INCLUDING, BUT NOT LIMITED TO, COMMUNITY BASED EDUCATION, CESSATION, EVALUATION AND OTHER PROGRAMS TO DISCOURAGE TOBACCO USE AMONG THE GENERAL POPULATION AS WELL AS MINORS AND CULTURALLY DIVERSE POPULATIONS. THE ACCOUNT SHALL BE ADMINISTERED BY THE ARIZONA DEPARTMENT OF HEALTH SERVICES.
2. FIVE CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE HEALTH RESEARCH ACCOUNT FOR RESEARCH ON THE PREVENTION AND TREATMENT OF TOBACCO-RELATED DISEASE AND ADDICTION. THE ACCOUNT SHALL BE ADMINISTERED BY THE ARIZONA DEPARTMENT OF HEALTH SERVICES.
3. SEVENTY CENTS OF EACH DOLLAR SHALL BE DEPOSITED IN THE MEDICALLY NEEDY ACCOUNT, FOR PROVIDING PERSONS DETERMINED MEDICALLY INDIGENT PURSUANT TO SECTION 11-297, MEDICALLY NEEDY PURSUANT TO SECTION 36-2905 OR LOW INCOME CHILDREN PURSUANT TO SECTION 36-2905.03, WITH HEALTH CARE SERVICES PROVIDED BY THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM, PURSUANT TO TITLE 36, CHAPTER 29, ARTICLE 1, OR ANY EXPANSION OF THAT PROGRAM, OR ANY SUBSTANTIALLY EQUIVALENT OR EXPANDED SUCCESSOR PROGRAM ESTABLISHED BY THE LEGISLATURE PROVIDING HEALTH CARE SERVICES TO PERSONS WHO CANNOT AFFORD THOSE SERVICES AND FOR WHOM THERE WOULD OTHERWISE BE NO COVERAGE. THESE SERVICES SHALL INCLUDE, BUT NOT BE LIMITED TO, PREVENTIVE CARE AND THE TREATMENT OF CATASTROPHIC ILLNESS OR INJURY, AS PROVIDED BY THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM. THE ACCOUNT SHALL BE ADMINISTERED BY THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION OR ANY SUCCESSOR THERETO.
4. TWO CENTS OF EACH DOLLAR IN THE FUND SHALL BE DEPOSITED IN THE ADJUSTMENT ACCOUNT FOR TRANSFER OF APPROPRIATE AMOUNTS TO THE CORRECTIONS FUND ESTABLISHED BY SECTION 41-1641 TO COMPENSATE FOR DECREASES IN THE CORRECTIONS FUND RESULTING FROM LOWER TOBACCO TAX REVENUES AVAILABLE UNDER SECTION 42-1204, SUBSECTION B, PARAGRAPH 3 AS A RESULT OF THE TAX SET FORTH IN SECTION 42-1241. ANY FUNDS IN THE ADJUSTMENT ACCOUNT IN EXCESS OF THE AMOUNT NEEDED FOR SUCH ADJUSTMENT SHALL REVERT TO THE TOBACCO TAX AND HEALTH CARE FUND FOR DISTRIBUTION IN EQUAL PROPORTIONS TO THE ACCOUNTS DESCRIBED UNDER SUBSECTION C, PARAGRAPHS 1, 2 AND 3 OF THIS SECTION. THE FUNDS DEPOSITED IN THE ADJUSTMENT ACCOUNT UNDER THIS PROVISION SHALL BE ADMINISTERED BY THE DEPARTMENT.
D. THE FUND AND ITS ACCOUNTS ARE NOT SUBJECT TO APPROPRIATION. EXPENDITURES FROM EACH ACCOUNT ARE NOT SUBJECT TO ADDITIONAL APPROVAL, NOTWITHSTANDING ANY STATUTORY PROVISION TO THE CONTRARY.
E. IN NO EVENT SHALL ANY MONIES IN THE FUND OR ITS ACCOUNTS REVERT TO THE STATE GENERAL FUND. MONIES IN THE FUND AND ITS ACCOUNTS ARE EXEMPT FROM THE PROVISIONS OF SECTION 35-190, RELATING TO LAPSING OF APPROPRIATIONS.
F. UNLESS OTHERWISE PROVIDED, THE ADMINISTRATION OF THIS ARTICLE IS VESTED IN AND SHALL BE EXERCISED BY THE DEPARTMENT ACCORDING TO CHAPTER 1, ARTICLES 1 AND 2 OF THIS TITLE, ARTICLE 1 OF THIS CHAPTER AND THIS ARTICLE.
42-1242. Use of funds
MONIES IN THE FUND SHALL BE EXPENDED ONLY FOR PURPOSES AUTHORIZED BY THIS ARTICLE. MONIES DEPOSITED IN THE HEALTH EDUCATION AND HEALTH RESEARCH ACCOUNTS SHALL ONLY BE USED TO SUPPLEMENT FUNDS APPROPRIATED BY THE LEGISLATURE FOR HEALTH EDUCATION AND HEALTH RESEARCH PURPOSES AND SHALL NOT BE USED TO SUPPLANT SUCH APPROPRIATED FUNDS. MONIES DEPOSITED IN THE MEDICALLY NEEDY ACCOUNT SHALL ONLY BE USED TO SUPPLEMENT FUNDS APPROPRIATED BY THE LEGISLATURE FOR THE PURPOSE OF PROVIDING LEVELS OF SERVICE ESTABLISHED PURSUANT TO TITLE 36, CHAPTER 29, ARTICLE 1 TO ELIGIBLE PERSONS AS DEFINED UNDER SECTION 36-2901, PARAGRAPH 4, OR ANY EXPANSION OF SUCH LEVELS OF SERVICE, OR FOR ANY SUCCESSOR PROGRAM ESTABLISHED BY THE LEGISLATURE PROVIDING LEVELS OF SERVICE SUBSTANTIALLY EQUIVALENT TO, OR EXPANDING THOSE PROVIDED, PURSUANT TO TITLE 36, CHAPTER 29, ARTICLE 1 TO SUCH ELIGIBLE PERSONS. MONIES DEPOSITED IN THE MEDICALLY NEEDY ACCOUNT SHALL NOT BE USED TO SUPPLANT FUNDS APPROPRIATED BY THE LEGISLATURE FOR THE PURPOSE OF PROVIDING LEVELS OF SERVICE ESTABLISHED PURSUANT TO TITLE 36, CHAPTER 29, ARTICLE 1. FOR PURPOSES OF THIS SECTION, "LEVELS OF SERVICE" MEANS THE PROVIDER PAYMENT METHODOLOGY, ELIGIBILITY CRITERIA AND COVERED SERVICES ESTABLISHED PURSUANT TO TITLE 36, CHAPTER 29, ARTICLE 1 IN EFFECT ON JULY 1, 1993.
Sec. 3. Title 42, Chapter 7, Arizona Revised Statutes, is amended by adding Article 1.3, to read:
ARTICLE 1.3. INDIAN RESERVATION TOBACCO TAX
42-1251. Definitions
IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE REQUIRES:
1. "INDIAN" MEANS ANY PERSON DULY REGISTERED ON THE TRIBAL ROLLS OF AN INDIAN TRIBE OCCUPYING AN INDIAN RESERVATION.
2. "INDIAN RESERVATION" MEANS ALL LANDS HELD IN TRUST BY THE UNITED STATES WITHIN THE LIMITS OF AREAS SET ASIDE BY THE UNITED STATES FOR THE EXCLUSIVE USE AND OCCUPANCY OF INDIAN TRIBES BY TREATY, STATUTE OR EXECUTIVE ORDER WHICH AREAS ARE RECOGNIZED AS INDIAN RESERVATIONS BY THE UNITED STATES DEPARTMENT OF THE INTERIOR.
3. "INDIAN TRIBE" MEANS ANY ORGANIZED INDIAN NATION, TRIBE, BAND OR COMMUNITY RECOGNIZED AS AN INDIAN TRIBE BY THE UNITED STATES DEPARTMENT OF THE INTERIOR.
42-1252. Levy of Indian reservation tobacco tax; rate; distribution of revenues; civil penalty; exemptions
A. IN ADDITION TO ALL OTHER TAXES, THERE IS LEVIED AND SHALL BE COLLECTED BY THE DEPARTMENT AND PAID TO THE STATE TREASURER A TAX ON THE PURCHASE ON AN INDIAN RESERVATION OF CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO, AT THE RATES PRESCRIBED BY SECTION 42-1241, SUBSECTION A.
B. THE TAXES LEVIED AND COLLECTED PURSUANT TO SUBSECTION A OF THIS SECTION SHALL BE DEPOSITED IN THE TOBACCO TAX AND HEALTH CARE FUND ESTABLISHED BY SECTION 42-1241 AND USED FOR THE PURPOSES PROVIDED THEREIN.
C. THE TAXES LEVIED PURSUANT TO THIS SECTION ARE CONCLUSIVELY PRESUMED TO BE DIRECT TAXES ON THE CONSUMER BUT SHALL BE PRECOLLECTED AND REMITTED TO THE DEPARTMENT BY THE DISTRIBUTOR FOR THE PURPOSE OF CONVENIENCE AND FACILITY ONLY. THE TAXES THAT ARE PRECOLLECTED AND PAID TO THE DEPARTMENT BY THE DISTRIBUTOR SHALL BE CONSIDERED TO BE AN ADVANCE PAYMENT AND SHALL BE ADDED TO THE PRICE OF THE CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO AND SHALL BE RECOVERED FROM THE CONSUMER.
D. IF THE TAX IMPOSED BY THIS SECTION ON CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO HAS NOT BEEN PRECOLLECTED OR REMITTED WHEN DUE BY THE DISTRIBUTOR, THE DISTRIBUTOR SHALL BE SUBJECT TO A CIVIL PENALTY EQUAL TO THE AMOUNT OF TAXES THAT SHOULD HAVE BEEN PRECOLLECTED OR REMITTED BUT WAS NOT.
E. THE TAX LEVIED BY THIS SECTION DOES NOT APPLY TO CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO:
1. FOR WHICH THE TAXES IMPOSED BY ARTICLE 1.2 OF THIS CHAPTER HAVE BEEN PAID.
2. SOLD BY AN INDIAN TRIBE, OR BY A FEDERALLY LICENSED INDIAN TRADER, ON AN INDIAN RESERVATION TO INDIANS WHO ARE ENROLLED MEMBERS OF THE INDIAN TRIBE FOR WHOSE BENEFIT THE INDIAN RESERVATION WAS ESTABLISHED.
42-1253. Precollection and remittance of tax by purchase of revenue stamps; procedure for claiming exemption
A. FOR THE PURPOSE OF THE PRECOLLECTION AND REMITTANCE OF THE TAX IMPOSED BY SECTION 42-1252 ON CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO, THE DISTRIBUTOR SHALL PURCHASE AND AFFIX REVENUE STAMPS PURSUANT TO ARTICLE 1 OF THIS CHAPTER.
B. THE DEPARTMENT SHALL PROMULGATE REGULATIONS PRESCRIBING THE PROCEDURES FOR CLAIMING AND VERIFYING SALES EXEMPT UNDER SECTION 42-1252, SUBSECTION E.
42-1254. Criminal violation; classification
A DISTRIBUTOR OR ANY PERSON WHO SHIPS, TRANSPORTS, SELLS OR DISTRIBUTES CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO ON WHICH THE TAX REQUIRED BY THIS ARTICLE HAS NOT BEEN PAID IS GUILTY OF A CLASS 3 MISDEMEANOR.
42-1255. Administration
UNLESS OTHERWISE PROVIDED, THE ADMINISTRATION OF THIS ARTICLE IS VESTED IN AND SHALL BE EXERCISED BY THE DEPARTMENT ACCORDING TO CHAPTER 1, ARTICLES 1 AND 2 OF THIS TITLE, ARTICLE 1 OF THIS CHAPTER AND THIS ARTICLE.
42-1256. Preemption by state
THE AREA OF INDIAN RESERVATION TOBACCO TAXATION IS PREEMPTED BY THIS STATE, AND A COUNTY, CITY, TOWN OR OTHER POLITICAL SUBDIVISION OF THIS STATE SHALL NOT LEVY SUCH A TAX. NOTHING IN THIS SECTION SHALL PRECLUDE AN INDIAN TRIBE FROM IMPOSING ITS OWN TOBACCO TAX OR SIMILAR LEVY.

42-1257. Indian reservation tobacco tax not to apply if similar tax is imposed by Indian tribe
IF AN INDIAN TRIBE IMPOSES A LUXURY, SALES, TRANSACTION PRIVILEGE OR SIMILAR TAX ON CIGARETTES, CIGARS, SMOKING TOBACCO, PLUG TOBACCO, SNUFF AND OTHER FORMS OF TOBACCO, BUT AT A RATE LESS THAN THAT PRESCRIBED BY SECTION 42-1252, SUBSECTION A, THE TAX IMPOSED BY SECTION 42-1252, SUBSECTION A SHALL BE LEVIED AT A RATE EQUAL TO THE DIFFERENCE BETWEEN THE RATE PRESCRIBED BY SECTION 42-1252, SUBSECTION A AND THE TAX IMPOSED BY SUCH INDIAN TRIBE. IF THE TAX IMPOSED BY SUCH INDIAN TRIBE IS EQUAL TO OR GREATER THAN THE TAX PRESCRIBED BY SECTION 42-1252, SUBSECTION A, THEN THE RATE PRESCRIBED BY SECTION 42-1252, SUBSECTION A SHALL BE ZERO.
Sec. 4. Severability clause
If any provision of this measure is declared invalid by a court of competent jurisdiction, such invalidity does not affect other provisions that can be given effect without the invalid provision and to this end the provisions of this measure are declared to be severable.[1]

Note: Deleted language is crossed out, added language is capitalized.

Support

Supporters included:[1]

  • Arizona for a Healthy Future
  • American Cancer Society
  • Arizona PTA
  • Arizona Students Against Driving Drunk
  • Arizona Lung Association
  • American Heart Association


Arguments in favor of the amendment included:[1]

  • The initiative will discourage tobacco use by raising the tax.
  • An improvement in public health will help lower health care costs overall.
  • Tobacco education programs can protect children from starting smoking at young ages.
  • The initiative will provide a greater number of medically needy and low income children with health care.

Opposition

Those in opposition included:[1]

  • No More Taxes
  • The Lincoln Caucus
  • Arizona Federation of Taxpayers

Arguments against the amendment included:[1]

  • The initiative would raise taxes.
  • The initiative lacks accountability and oversight by the state legislature for the revenue raised.
  • The initiative bypasses the legislative appropriations process and 2/3rds majority requirement for tax increases.

See also

BP-Initials-UPDATED.png
Suggest a link

External links

State of Arizona 1994 Ballot Propositions Guide
Arizona Department of State official website

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 State of Arizona 1994 Ballot Propositions Guide
  2. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.