State official says money lacking to enforce tobacco law

JEFFERSON CITY, Mo. -- The state does not have enough money or staff to adequately enforce a new law banning the sale of certain imported cigarettes in Missouri, a state official said Monday.

The law targets so-called gray-market cigarettes, which are manufactured overseas for sale abroad but are also sold at low prices in the United States.

The legislature banned the sale of such cigarettes in 2001. But a Cole County circuit judge tossed out the law in February, declaring that it had been unconstitutionally included in a broader bill about underage smoking.

So lawmakers passed the cigarette provisions again -- this year as a stand-alone bill. Gov. Bob Holden signed the bill Friday, and the law is to take effect Aug. 28.

Enforcement of Missouri's tobacco laws rests primarily with the Department of Revenue, which could impose fines of up to $5,000 and revoke or suspend the license of any tobacco wholesaler that violates the ban on gray-market cigarettes.

The state attorney general and local prosecutors also are given authority to enforce the ban on selling foreign-market cigarettes that have not complied with all the U.S. taxes and warning label provisions. Violations are felonies, punishable by up to five years in prison and a fine.

Lack of staffing cited

In preparing a cost estimate for the original legislation, the Department of Revenue had said it would need four new field agents and two tax-processing technicians to enforce the law.

The agency points to provisions in a national legal settlement with big tobacco companies requiring states to diligently enforce their laws. Missouri expects to receive $4.5 billion over 25 years from that settlement, and not following its terms could jeopardize part of the money, the department said.

Enforcement of the gray-market-cigarette law would require an estimated $200,000 to $300,000, said Todd Iveson, deputy director of the Revenue Department's taxation and collection division.

That money was not included in the fiscal 2003 budget, which took effect July 1.

"We would like to be out there actively enforcing this law now that it's on the books," Iveson said. "Unfortunately, we haven't been given any more resources in order to enforce it."

Barring more money, the department is likely to pursue violations of the new law only after a tip from the public or if a normal review of tobacco wholesalers' sales documents looks irregular, Iveson said.

After the February circuit court ruling, Attorney General Jay Nixon's office appealed to the state Supreme Court. Because of the new law, the appeal and lawsuit are now likely to be dropped.

"We are reviewing the bill that the governor signed into law, but it certainly does appear that the new provisions would make the lawsuit moot," said Nixon spokesman Scott Holste.

The tobacco shop owner who brought the lawsuit agreed that the new law ends his short-lived victory. Fred Teutenberg, president of the St. Louis-area chain of Dirt Cheap Cigarettes and Beer, declined to say whether he would try to challenge the law through another lawsuit.