2016 News Releases

AG Schmidt lauds approval of tribal tobacco compacts

Release Date: Mar 22, 2016

TOPEKA – (March 22, 2016) – Kansas Attorney General Derek Schmidt today commended the Kansas Legislature for approving two compacts aimed at increasing cooperation with Native American tribes on accounting for tobacco sales on tribal lands in Kansas.

“I appreciate the Legislature’s quick action to consider and unanimously approve these compacts,” Schmidt said. “As a result of this action, we will significantly improve cooperation between the tribes and the state to prevent the illicit shipment of untaxed and unaccounted-for cigarettes in Kansas, strengthening our ability to comply with the terms of the 1998 Tobacco Master Settlement Agreement.”

The two compacts, one with the Prairie Band Potawatomi Nation and one with the Iowa Tribe of Kansas and Nebraska, were each approved by the Senate 39-0 and the House 125-0. The bills approving the compacts will now be presented to Gov. Sam Brownback.

Under the 1998 tobacco settlement, known as the Master Settlement Agreement (MSA), most tobacco companies agreed to make annual cash payments to the State of Kansas. At the same time, Kansas agreed to diligently enforce its obligations under the MSA, including accounting for cigarette sales within the state. In 2012, Kansas resolved a longstanding dispute with tobacco companies, which had accused the state of failing to live up to its diligent enforcement obligations. Before it was resolved, that dispute had placed at risk hundreds of millions of dollars in future tobacco payments for Kansas, which total about $60 million each year.

To resolve the dispute, and to eliminate the potentially large financial liability for the state, Kansas, as part of the 2012 settlement, agreed to strengthen its diligent enforcement efforts in the future including accounting for cigarettes sold on tribal lands in Kansas and over the internet. Because the tribes have sovereign rights over their qualified tribal lands, it was necessary for the state to compact with the tribes to improve cigarette enforcement on tribal lands.

“I appreciate the willingness of the tribes to work cooperatively with the state to craft agreements that are mutually beneficial,” Schmidt said.

A copy of the compact negotiated with the Prairie Band Potawatomi Nation is available at http://1.usa.gov/1LTkGzr. A copy of the compact negotiated with the Iowa Tribe is available at http://1.usa.gov/1QqF4gB. Schmidt said compact negotiations with the other two resident tribes, the Kickapoo and the Sac and Fox, continue.

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