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Bredesen Vetoes RJ Reynolds Sponsored Equity Fee Legislation That Hurt Small Companies & Endangered State MSA Tobacco Money 

In a decisive move today aimed at maintaining fairness for small companies who are not signatories to the tobacco Master Settlement Agreement (MSA), and at preserving the integrity of the Tennessee state budget, Governor Bredesen issued his first ever veto to eliminate legislation sponsored by R.J. Reynolds, that would have placed a discriminatory 50 cents per pack equity fee on some of the nations smallest cigarette companies.

Complimenting the Governor for his precedent-setting action in dealing with this ill-conceived legislation, Clark Corson, President of the Council of Independent Tobacco Manufacturers of America (CITMA), said "Governor Bredesen must be commended for his intervention. The Governor has acted decisively to preserve tobacco jobs in Tennessee. These small manufacturers have employees in the state, buy Tennessee leaf tobacco, and sell their products through traditional cigarette and tobacco wholesalers and retailers in the state. At a time of diminishing economic opportunity in the tobacco sector, these are all vital jobs, and we are glad the Governor has intervened to protect them. This veto will also ensure that excise revenues from cigarette products continue to flow into the state treasury, as adult smokers will not be tempted to buy their favorite discount brands from stores in the bordering states, or from internet vendors."

Corson explains, "This Reynolds-sponsored statute was pitched to state legislators on the basis that it would protect MSA monies coming to the state, and it would generate in excess of $15 million in new revenues for the TennCare program -- it did neither, and the Governor saw through it. Reynolds had proposed these discriminatory equity fees on Non-Participating Manufacturers (NPM's) in Michigan, Alaska, Utah, and now Tennessee, for purely selfish reasons.

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