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April 07, 2011

LITTLE ROCK - Attorney General Dustin McDaniel announced today that commercial "roll-your-own" cigarette machines will be prohibited in Arkansas under a new law also aimed at deterring illegal activity by tobacco wholesalers and manufacturers.

Act 836 of 2011, signed into law this week, was part of the Attorney General's legislative package. The Act bans commercial cigarette rolling machines, effective Jan. 1, 2012.

Retail cigarette vendors operate such machines to exploit the tax discrepancies between "roll-your-own" cigarette tobacco, pipe tobacco and cigarettes. Because of the tax differences, the lower costs for "roll-your-own" cigarettes appeal to youth and an already-addicted adult population of smokers.

Without Act 863, the tax discrepancies would hamper the State's long-term public health efforts.

There are no machines currently in Arkansas. McDaniel sought the legislation to ensure that none enter the State.

"Cigarettes from these machines may have a lower cost to smokers because of tax differences, but they carry the same high health risks. We don't want these machines in our state." McDaniel said. "I'm grateful to the General Assembly for also recognizing the potential harm to public health and providing broad, bipartisan support for this Act."

The state's top consumer advocate, McDaniel has made tobacco issues a priority during his tenure as Attorney General. In addition to shepherding this and other legislative efforts on behalf of the state's children and families, McDaniel is co-chairman of the Tobacco Committee of the National Association of Attorneys General.

As Tobacco Committee co-chairman, McDaniel oversees compliance of about $6 billion in annual payments to the states related to the Master Settlement Agreement with tobacco companies.

In addition to its health component, the Act helps to ensure that tobacco wholesalers and manufacturers are paying their fair share of taxes for the products they sell in the state.

Act 836 will help the state fight illegal activity estimated by the U.S. Department of Justice to cost states more than $5 billion annually. The Act allows the state to revoke the Arkansas business licenses of those manufacturers or wholesalers who act unlawfully in other states. Companies which pose an elevated risk of noncompliance with Arkansas law could also be required to post a bond as a condition of doing business here.

Licensed wholesalers must also provide more information about in-state sales to the Attorney General, Department of Finance and Administration and Arkansas Tobacco Control. The information will allow the agencies to target tax avoidance by retailers and consumers.

The Act was sponsored by Reps. John Edwards, D-Little Rock, and Davy Carter, R-Cabot.