South Carolina General Assembly
117th Session, 2007-2008

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Bill 3567

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Indicates New Matter


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Indicates Matter Stricken

Indicates New Matter

COMMITTEE REPORT

May 16, 2007

H. 3567

Introduced by Reps. Rice, Gullick, Cotty and Agnew

S. Printed 5/16/07--S.

Read the first time May 2, 2007.

            

THE COMMITTEE ON FINANCE

To whom was referred a Bill (H. 3567) to amend Section 12-21-620, Code of Laws of South Carolina, 1976, relating to taxation on cigarettes, so as to increase the amount of tax on, etc., respectfully

REPORT:

That they have duly and carefully considered the same and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by striking all after the enacting words and inserting:

/        SECTION    1.    Article 5, Chapter 21, Title 12 of the 1976 Code is amended by adding:

"Section 12-21-625.    (A)    Effective July 1, 2007, there is imposed a surtax on cigarettes subject to the tax imposed pursuant to Section 12-21-620(1) in an amount equal to 2.25 cents on each cigarette.

(B)    Notwithstanding another provision of law providing for the crediting of the revenues of license or other taxes, the revenue of the surtax imposed pursuant to this section must be credited to the general fund of the State and used for those purposes the General Assembly determines by law.

(C)    For all purposes of reporting, payment, collection, and enforcement, the surtax imposed by this section is deemed to be imposed pursuant to Section 12-21-620."

SECTION    2.    Section 12-36-910(D) of the 1976 Code, as added by Act 388 of 2006, is amended to read:

"(D)(1)    Notwithstanding the rate of the tax imposed pursuant to subsection (A) of this section or the rate of any other sales tax imposed pursuant to this chapter and the rate of any use tax imposed pursuant to this chapter, effective November 1, 2007, the sales and use tax on the gross proceeds of sales or sales price of unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons is three one percent.

(2)    There is transferred from the general fund of the State to the EIA Fund in fiscal year 2006-2007 the revenue estimated by the Board of Economic Advisors to equal EIA revenue not received as a result of the two percent sales tax differential provided pursuant to this subsection. Beginning with the February 15, 2008, forecast by the Board of Economic Advisors of annual general fund revenue growth for the upcoming fiscal year, and annually thereafter, if the forecast of that growth equals at least five percent of the most recent estimate by the board of general fund revenues for the current fiscal year, the then applicable state sales and use tax rate imposed on unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons is reduced, effective the following July first, by one-half of one percentage point. That reduced rate applies until a subsequent reduction takes effect. If the February fifteenth forecast meets the requirement for a rate reduction, the board promptly shall certify this result in writing to the Department of Revenue. On the July first that the rate attains zero, the provisions of this subsection no longer apply.

(3)    Twenty percent of the sales and use tax revenue attributable to the then applicable special rate imposed pursuant to this subsection, as estimated by the Board of Economic Advisors, must be credited to the EIA Fund. The balance of the revenue must be credited to the general fund of the State and used for the purposes provided for pursuant to Section 59-21-1010(A)."

SECTION    3.    Section 12-36-2120 of the 1976 Code is amended by adding a new item at the end appropriately numbered to read:

"( )    effective on the July first that the provisions of Section 12-36-910(D) no longer apply, unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons. However, the exemption allowed by this item applies only to the state sales and use tax imposed pursuant to this chapter."

SECTION    4.    Section 12-6-510(A) of the 1976 Code is amended to read:

"(A)    For taxable years beginning after 1994 2006, a tax is imposed on the South Carolina taxable income of individuals, estates, and trusts and any other entity except those taxed or exempted from taxation under Sections 12-6-530 through 12-6-550 computed at the following rates with the income brackets indexed in accordance with Section 12-6-520:

Not over $2,220                    2.5 percent of taxable income

over $2,220 but                    $56 plus 3 percent of

not over $4,440                    the excess over $2,220;

over $4,440 but                    $123 plus 4 percent of

not over $6,660                    the excess over $4,440;

over $6,660 but                    $212 plus 5 percent of

not over $8,880                    the excess of $6,660;

over $8,880 but                    $323 plus 6 percent of

not over $11,100                    the excess over $8,880;

over $11,100                        $456 plus 7 percent of

the excess over $11,100.

OVER            BUT NOT

OVER

$        0                $2,630                -0-

2,630            5,260                3% times the amount less $79

5,260            7,890                4% times the amount less $132

7,890            10,520                5% times the amount less $211

10,520            13,150                6% times the amount less $316

13,150            or more            7% times the amount less $448."

SECTION    5.    Article 1, Chapter 11, Title 11 of the 1976 Code is amended by adding:

"Section 11-11-220.    (A)    There is created in the State Treasury the Health Care Trust Fund. This fund is separate and distinct from the general fund of the State and all other funds. Earnings on this fund must be credited to it and any balance in this fund at the end of a fiscal year carries forward in the fund in the succeeding fiscal year. In each fiscal year, there must be transferred ninety million dollars from the general fund of the State to the Health Care Trust Fund. Revenues in this fund must be appropriated by the General Assembly in the annual general appropriations act for those purposes as the General Assembly provides.

(B)    There is created in the State Treasury the Smoking Cessation Trust Fund. This fund is separate and distinct from the general fund of the State and all other funds. Earnings on this fund must be credited to it and any balance in this fund at the end of a fiscal year carries forward in the fund in the succeeding fiscal year. In each fiscal year, there must be transferred five million dollars from the general fund of the State to the Smoking Cessation Trust Fund. Revenues in this fund must be appropriated by the General Assembly in the annual general appropriations act for those purposes as the General Assembly provides."

SECTION    6.    Section 12-21-735 of the 1976 Code is amended to read:

"Section 12-21-735.    Each person or distributor of cigarettes taxable under this article, first receiving untaxed cigarettes for sale or distribution in this State, is subject to the tax imposed in Section 12-21-620. Each distributor required to pay the tax shall make a report to the department, in the form the department prescribes, of all cigarettes sold or disposed of in this State, and pay taxes due thereon not later than the twentieth day of the month next succeeding the month of the sale or disposition. However, any person or distributor making shipments of cigarettes to retail locations in and out of this State shall apply to the department for a license which enables them to purchase cigarettes free of tax, and report and pay tax as provided in this section on sales of cigarettes sold to locations in this State.

The department shall require bonds or statements of financial stability satisfactory to the department to cover possible losses resulting from failure to remit taxes due. When the return required by this section is timely filed and the taxes shown to be due are paid by the date specified in this section, the person or distributor may deduct three and one-half percent of the tax due.

(A)    The taxes imposed on cigarettes pursuant to this chapter must be paid by affixing stamps in the manner and at the time provided in this section. A wholesaler that receives cigarettes intended for sale or distribution within this State which are exempt from the taxes imposed pursuant to this chapter shall affix stamps that indicate the package of cigarettes is exempt from tax.

(B)    The department shall cause to be prepared and distributed exclusively to manufacturers and wholesalers licensed pursuant to Section 12-21-660, tax stamps of such denominations and quantities as the department considers necessary for the payment of cigarette taxes imposed pursuant to this chapter. The department also shall cause to be prepared and distributed to licensed manufacturers and wholesalers stamps that indicate that a package of cigarettes is exempt from the taxes imposed pursuant to this chapter. A stamp on a package of cigarettes must note whether the taxes prescribed in this chapter were paid or whether the package of cigarettes was exempt from the taxes.

(C)    Each roll or sheet of cigarette stamps must have a separate and unique serial number that is clearly visible at the point of sale. The department shall keep records of which licensed manufacturers or wholesalers purchased each roll or sheet of cigarette stamps identified by serial number. If the department permits licensed manufacturers or wholesalers to purchase partial rolls or sheets of cigarette stamps, cigarette stamps bearing the same serial number must not be sold to more than one person.

(D)    Each licensed manufacturer or wholesaler authorized by the department in accordance with Section 12-21-50 to make a meter impression on a package of cigarettes instead of using a tax stamp must be assigned a unique meter impression number that may not be used by any other manufacturer or wholesaler and must be visible and easily identifiable at the point of sale. The department shall keep records of which licensed manufacturer and wholesaler is assigned each meter impression number.

(E)(1)    Stamps must be affixed to each individual package of cigarettes by wholesalers before being sold, distributed, or shipped to another person. A wholesaler may apply stamps only to packages of cigarettes manufactured, imported, purchased, or obtained directly from a licensed manufacturer. Only licensed wholesalers may receive unstamped packages of cigarettes. Only licensed wholesalers may affix stamps to packages of cigarettes. If cigarettes are manufactured within the State and sold directly to consumers, they must be stamped by the manufacturer when and as sold.

(2)    Stamps must be affixed by licensed manufacturers or wholesalers:

(a)    in a denomination that equals at least the tax due on cigarettes in the package, if the cigarettes are subject to tax pursuant to this chapter;

(b)    on the smallest package of cigarettes to be handled, sold, used, consumed, or distributed in this State; and

(c)    to the bottom of each individual package of cigarettes in a manner prohibiting the removal of the stamp from the package without it being mutilated or destroyed.

(F)    A jobber or retailer may obtain cigarettes only from a licensed wholesaler. A jobber or retailer may sell cigarettes only if they are stamped in accordance with the provisions in this chapter and obtained from a licensed wholesaler.

(G)    Only a licensed manufacturer or wholesaler may ship or otherwise cause to be delivered unstamped packages of cigarettes in, into, or from this State. A person that ships or otherwise causes to be delivered unstamped packages of cigarettes into, within, or from this State shall ensure that the invoice of equivalent documentation and the bill of lading or freight bill for the shipment identifies the true name and address of the cosigner or seller, the true name and address of the cosignee or purchaser, and the quantity by brand style of the cigarettes so transported. This section does not impose requirements or liability upon a common or contract carrier.

(H)    In addition to another penalty provided by law, upon determination that a cigarette manufacturer, wholesaler, jobber, or retailer has unlawfully sold or possessed unstamped or untaxed packages of cigarettes, the department shall revoke the license of the cigarette manufacturer, wholesaler, or jobber in the manner provided by Section 12-60-1310 through Section 12-60-1350 and impose fines on the retailers as appropriate.

(I)    A retailer may not knowingly sell or distribute more than ten cartons of cigarettes to a person in a single transaction or in a series of transactions within a twenty-four hour period; except that a retailer that is also licensed as a wholesaler may make sales permitted to be made by a wholesaler pursuant to this chapter when acting in that capacity.

(J)    Notwithstanding the provisions of Section 12-21-780, the department may require returns and payments of this tax for other than monthly periods."

SECTION    7.    Section 12-21-620 of the 1976 Code is amended to read:

"Section 12-21-620.    There shall be levied, assessed, collected, and paid in respect to the articles containing tobacco enumerated in this section the following amounts:

(1)    upon all cigarettes made of tobacco or any substitute for tobacco, three and one-half mills on each cigarette;

(2)    upon all tobacco products, except snuff, as defined in Section 12-21-800, five percent of the manufacturer's price.

Manufacturer's price as used in this section is the established price at which a manufacturer sells to a wholesaler;.

(3)    upon all snuff, thirteen cents per ounce, including a proportionate rate on all fractional parts of an ounce. The tax shall be computed based on the net weight listed by the manufacturer.

For purposes of this section, 'snuff' means any finely cut, ground or powdered tobacco that is not intended to be smoked but shall not include any finely cut, ground or powdered tobacco that is intended to be placed in the nasal cavity."

SECTION    8.    Except where otherwise stated, this act takes effect upon approval by the Governor.         /

Renumber sections to conform.

Amend title to conform.

HUGH K. LEATHERMAN, SR. for Committee.

            

STATEMENT OF ESTIMATED FISCAL IMPACT

REVENUE IMPACT 1/

This bill, as amended, is expected to increase general fund business license tax revenue by an estimated $53,635,000 in FY2007-08. The food tax reduction would reduce general fund revenue by $54,000,000 in FY2007-08 for one-half of the fiscal year. This bill, as amended, also contains an E.I.A. hold harmless provision that would reduce general fund revenue by $10,800,000 in FY2007-08. The food tax reduction would reduce general fund revenue by an estimated $108,000,000 in FY2008-09. The net effect of this amended bill is a reduction of general fund revenue by an estimated $365,000 in FY2007-08.

Explanation of Amendment (April 25, 2007) - By the House of Representatives

This amendment would impose a 30-cent surcharge on each pack of 20 cigarettes beginning January 1, 2008 and is expected to generate an estimated $53, 635,000 in FY2007-08. Section 2 of the amendment would amend Section 12-36-910(D) to reduce the sales and use tax on food purchased for home consumption by U.S. Department of Agriculture food coupons from the current rate of three percent to one and four-tenths of one percent beginning January 1, 2008. This would reduce the sales and use tax on grocery store items by an estimated $54,000,000 in FY2007-08. Of this amount, general fund sales and use tax revenue would be reduced by $43,200,000 and EIA funds would be reduced by $10,800,000 in FY2007-08. This amendment contains an EIA hold harmless provision and requires the transfer of an estimated $10,800,000 from the general fund to the EIA Fund in FY2007-08 as a result of the one and sixth-tenths percent reduction in the sales tax rate of eligible food items. The amendment also requires that in any fiscal year that the business license tax on cigarettes is greater than 7-cents a pack, the General Assembly shall appropriate $1,000,000 to the Department of Agriculture for research and promotion of healthy lifestyles with food grown in South Carolina. This act takes effect January 1, 2008.

Explanation of Amendment (March 20, 2007) - By the Licenses, Fees, Insurance Tax Subcommittee

This amendment would add Section 12-21-625 to increase the levy on each cigarette made of tobacco or any substitute for tobacco by one and one-half cent on each cigarette. This equates to a 30-cent surcharge on each pack of 20 cigarettes, raising the state excise tax to 37 cents per pack of 20 cigarettes. The higher surcharge is expected to generate an estimated $107,270,000 of business license tax revenue in FY2007-08. Since the effective date of this act is January 1, 2008, the higher surcharge is expected to generate an estimated $53,635,000. The Department of Health and Environmental Control must be allocated five percent, or an estimated $2,681,750 of cigarette tax revenue, to fund a Youth Smoking Prevention and Cessation Fund. DHEC is also allocated an amount equal to one cent of the cigarette tax increase, or an estimated $1,787,500, that must be used in the Superb Fund for the cleanup of underground gasoline tanks to satisfy any existing Environmental Protection Agency deficiencies. Upon satisfaction of the deficiency, the one cent must be returned to the Reserve Trust Fund in the DHHS. The Department of Agriculture is allocated $1,000,000 for research and promotion of healthy lifestyles with food grown in South Carolina. The remaining $48,165,750 is allocated to a new Health Care Trust Fund to be used by the Department of Health and Human Services (DHHS) to expand coverage under the state Medicaid program to children eighteen years of age and under whose family income does not exceed one hundred percent of the federal poverty level. Any remaining funds must be used by the DHHS to provide Medicaid coverage to individuals nineteen years of age and older who are uninsured and whose family income does not exceed one hundred percent of the federal poverty level. There is created within the DHHS a new Reserve Trust Fund for the state Medicaid program to fund any shortfalls in the DHHS operating budget up to one and one-half percent of DHHS's operating budget from any unobligated proceeds from the surcharge on cigarettes. Because the higher tax will reduce cigarette demand, the Business License tax currently allocated to the general fund will be reduced by an estimated $1,090,750 in FY2007-08.

Section 2 of the amendment would amend Section 12-36-910(D) to reduce the sales and use tax on food purchased for home consumption by U.S. Department of Agriculture food coupons from the current rate of three percent to one and one-half of one percent. This would reduce the sales and use tax on grocery store items by an estimated $101,250,000 in FY2007-08. Since the effective date of this provision is January 1, 2008, sales and use tax revenue would be reduced by one-half, or an estimated $50,625,000 in FY2007-08. The amendment contains an EIA hold harmless provision and requires the transfer of an estimated $23,636,813 from the general fund to the EIA Fund in FY2007-08 as a result of the three and one-half percent reduction in the sales tax rate of eligible food items.

Section 5 of the amendment would authorize that cigarette tax stamps be affixed to each package of cigarettes before they may be sold at retail establishments. The stamps must be purchased at the Department of Revenue and the amendment allows for a five percent discount on stamp purchases of $25 or more. Based on an estimated 357,567,000 packs of cigarettes and applying the one-cent stamp tax and the five percent discount for one-half of the fiscal year, this section would increase general fund business license tax revenue by an estimated $1,700,000 in FY2007-08.

Section 6 of the amendment would allow the act to take effect January 1, 2008.

Explanation of Bill filed February 21, 2007

This bill would amend Section 12-21-620 to increase the levy on each cigarette made of tobacco or any substitute for tobacco to two cents on each cigarette. This equates to a 33-cent surcharge on each pack of 20 cigarettes, raising the state excise tax to 40 cents per pack of 20 cigarettes. The higher surcharge is expected to generate an estimated $116,948,000 of business license tax revenue in FY2007-08. Of this amount, an estimated $22,956,606 is allocated to the Department of Health and Human Services (DHHS) to expand coverage under the state Medicaid program to children eighteen years of age and under whose family income does not exceed two hundred percent of the federal poverty level. The remaining funds must be allocated to a new Health Care Trust Fund to be used by the DHHS to provide Medicaid coverage to individuals nineteen years of age and older who are uninsured and whose family income does not exceed one hundred percent of the federal poverty level. Because the higher tax will reduce cigarette demand, the Business License tax currently allocated to the general fund will be reduced by an estimated $2,403,252 in FY2007-08. This bill also reduces the sales and use tax rate on the sales of unprepared food purchased in grocery stores to two percent from July 1, 2007 through June 30, 2008, and to one percent from July 1, 2008 through June 30, 2009, and is eliminated effective July 1, 2009. The reduced rates of sales taxation on eligible food items purchased in grocery stores will reduce sales and use tax revenue by an estimated $73,828,000 in FY2007-08, $80,754,000 in FY2008-09, and $88,181,000 by FY2009-10. This bill also contains an Education Improvement Act (EIA) hold harmless provision. The amount of revenue that the EIA would have received is to be estimated by the BEA and transferred from the general fund to the EIA Fund. We estimated the EIA hold harmless amounts to be $14,800,000 in FY2007-08, $16,200,000 in FY2008-09, and $17,600,000 in FY2009-10.

Approved By:

William C. Gillespie

Board of Economic Advisors

1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.

A BILL

TO AMEND SECTION 12-21-620, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAXATION ON CIGARETTES, SO AS TO INCREASE THE AMOUNT OF TAX ON EACH CIGARETTE FROM THREE AND ONE-HALF MILLS TO TWO CENTS; TO ADD SECTION 44-6-157 SO AS TO PROVIDE THAT THE REVENUE GENERATED FROM THE TAXATION ON CIGARETTES MUST BE USED TO EXPAND MEDICAID COVERAGE TO CHILDREN EIGHTEEN YEARS OF AGE AND YOUNGER WHOSE FAMILY INCOME DOES NOT EXCEED TWO HUNDRED PERCENT OF THE FEDERAL POVERTY LEVEL; AND TO CREATE THE HEALTH CARE TRUST FUND TO PROVIDE MEDICAID BENEFITS TO INDIVIDUALS WHOSE FAMILY INCOME DOES NOT EXCEED ONE HUNDRED PERCENT OF THE FEDERAL POVERTY LEVEL AND WHO ARE UNINSURED AND TO PROVIDE THAT REVENUE IN EXCESS OF THE CHILDREN'S MEDICAID COVERAGE FROM THE CIGARETTE TAX MUST BE CREDITED TO THE HEALTH CARE TRUST FUND; AND TO AMEND SECTION 12-36-910, AS AMENDED, RELATING TO SALES TAXES GENERALLY, SO AS TO PROVIDE THAT AS OF JULY 1, 2009, THE THREE PERCENT SALES TAX IS ELIMINATED ON UNPREPARED FOOD WHICH LAWFULLY MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS, TO PROVIDE FOR CERTAIN GENERAL FUND TRANSFERS TO THE EDUCATION IMPROVEMENT ACT FUND FOR EACH FISCAL YEAR TO OFFSET EIA REVENUES LOST AS A RESULT OF THE LOSS OF SALES TAX ON THE SALE OF UNPREPARED FOOD, AND TO REDUCE THE SALES TAX ON UNPREPARED FOOD TO TWO PERCENT AS OF JULY 1, 2007, AND ONE PERCENT AS OF JULY 1, 2008.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Article 5, Chapter 21, Title 12 of the 1976 Code is amended by adding:

"Section 12-21-625.    (A)    There is imposed a surtax on cigarettes subject to the tax imposed pursuant to Section 12-21-620(1) in an amount equal to 1.5 cents on each cigarette.

(B)    Notwithstanding another provision of law providing for the crediting of the revenues by license or other taxes, the revenue of the surtax imposed by this section must be credited to the Groceries' Sales Tax Relief Fund established pursuant to subsection (C) and used only for the purpose prescribed in subsection (C).

(C)(1)    There is created the Groceries' Sales Tax Relief Fund into which must be deposited the revenue of the surtax collected pursuant to subsection (A). The fund must be separate and distinct from the general fund and may be used only for the purpose prescribed in this subsection. Earnings on investments from this fund must remain part of the separate fund and must not be deposited in the general fund, except as otherwise provided in this subsection.

(2)    Monies in the fund must be used to reduce the state sales and use tax imposed on the gross proceeds of the sale or sales price of unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons.

(3)    Monies in the fund must be transferred by the State Treasurer to the general fund each fiscal year in the amount estimated by the Board of Economic Advisors to equal revenue not received as a result of the reduction of the sales and use tax on unprepared food as provided in this subsection.

(4)    Monies not expended from the fund during a fiscal year must be carried forward to the succeeding fiscal year and used for the same purpose.

(D)    For all purposes of reporting, payment, collection, and enforcement, the surtax imposed by this section is deemed to be imposed pursuant to Section 12-21-620."

SECTION    2.    Section 12-36-910(D) of the 1976 Code, as added by Act 388 of 2006, is amended to read:

"(D)(1)    Notwithstanding the rate of the tax imposed pursuant to subsection (A) of this section or the rate of any other sales tax imposed pursuant to this chapter and the rate of any use tax imposed pursuant to this chapter, the sales and use tax on the gross proceeds of sales or sales price of unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons is three one and four-tenths percent.

(2)    There is transferred from the general fund of the State to the EIA Fund in fiscal year 2007-2008 the revenue estimated by the Board of Economic Advisors to equal EIA revenue not received as a result of the two one and six-tenths percent sales tax differential provided pursuant to this subsection (D)(1).

(3)    Notwithstanding the rate of the tax imposed pursuant to subsection (D)(1), the sales and use tax on the gross proceeds of sales or sales price of unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons is reduced to one and four-tenths percent effective January 1, 2008. There is transferred from the general fund of the State to the EIA Fund the revenue estimated by the Board of Economic Advisors to equal EIA revenue not received as a result of the loss of this sales tax revenue."

SECTION    3.A.    Section 12-21-750 of the 1976 Code is amended to read:

"Section 12-21-750.    All A retail dealers dealer in manufactured tobacco products, shells, cartridges or playing cards purchasing or receiving such the commodities from without the State, whether they shall have been ordered through a wholesaler or jobber in this State, by drop shipment or otherwise, shall, within five days after receipt of them, shall mail a duplicate invoice of all such the purchases or receipts to the department. Failure to furnish duplicate invoices as required shall be is a misdemeanor and, upon conviction, be is punishable by a fine of not more than one hundred dollars for each offense or imprisonment for a period not exceeding thirty days."

B.    Section 12-21-770 of the 1976 Code is amended to read:

"Section 12-21-770.    Every Any person, firm, corporation, club, or association who sells, stores, or receives for the purpose of distribution to any person, firm, corporation, club, or association any shotgun or other shells, cartridges, manufactured tobacco products or playing cards otherwise taxable under pursuant to the provisions of this chapter shall must pay the tax at the rates provided in this article for the sale of such articles those products."

SECTION    4.    Article 5, Chapter 21, Title 12 of the 1976 Code is amended by adding:

"Section 12-21-627.    Notwithstanding any other provision of law providing for the crediting and use of the revenues of the license tax on tobacco products, in any fiscal year that the license tax on cigarettes is greater than seven cents a pack, the General Assembly shall appropriate one million dollars in the annual general appropriations act to the Department of Agriculture for research and promotion of healthy lifestyles with food grown in this State."

SECTION    5.    This act takes effect January 1, 2008.

----XX----

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