Sec. 2. 36 MRSA §4365, as amended by PL 1997, c. 643, Pt. T, §3 and affected by §6 and c. 750, Pt. D, §1, is repealed and the following enacted in its place:

§4365.__Rate of tax

1.__Tax beginning November 1, 1997.__Beginning November 1, 1997, as a public health measure, the tax imposed under this section is 37 mills per cigarette.

2.__Tax beginning November 1, 1999.__Beginning November 1, 1999, the tax imposed under this section is 68.5 mills per cigarette.

Sec. 3. 36 MRSA §4365-E is enacted to read:

§4365-E.__Rate of tax beginning November 1, 1999

Beginning November 1, 1999, the following provisions apply to cigarettes held for resale on that date.

1.__Stamped rate.__Cigarettes stamped at the rate of 37 mills per cigarette and held for resale after October 31, 1999 are subject to tax at the rate of 68.5 mills per cigarette.

2.__Liability.__A person possessing cigarettes for resale is liable for the difference between the tax rate of 68.5 mills per cigarette and the tax rate of 37 mills per cigarette in effect before November 1, 1999.__Stamps indicating payment of the tax imposed by this section must be affixed to all packages of cigarettes held for resale as of November 1, 1999, except that cigarettes held in vending machines as of that date do not require that stamp.

3.__Vending machines.__Notwithstanding any other provisions of this chapter, it is presumed that all cigarette vending machines are filled to capacity on November 1, 1999 and the tax imposed by this section must be reported on that basis.__A credit against this inventory tax must be allowed for cigarettes stamped at the 68.5 mill rate placed in vending machines before November 1, 1999.

4.__Payment.__Payment of the tax imposed by this section must be made to the State Tax Assessor by February 1, 2000, accompanied by forms prescribed by the assessor.