196.1003. Requirements.
Requirements.
196.1003. Requirements.
Any tobacco product manufacturer selling cigarettes to consumers withinthe State (whether directly or through a distributor, retailer or similarintermediary or intermediaries) after the date of enactment of this Act shalldo one of the following:
(a) become a participating manufacturer (as that term is defined insection II(jj) of the Master Settlement Agreement) and generally perform itsfinancial obligations under the Master Settlement Agreement; or
(b) (1) place into a qualified escrow fund by April 15 of the yearfollowing the year in question the following amounts (as such amounts areadjusted for inflation)--
1999: $.0094241 per unit sold after the date of enactment of this Act;
2000: $.0104712 per unit sold;
for each of 2001 and 2002: $.0136125 per unit sold;
for each of 2003 through 2006: $.0167539 per unit sold;
for each of 2007 and each year thereafter: $.0188482 per unit sold.
(2) A tobacco product manufacturer that places funds into escrowpursuant to paragraph (1) shall receive the interest or other appreciation onsuch funds as earned. Such funds themselves shall be released from escrowonly under the following circumstances--
(A) to pay a judgment or settlement on any released claim broughtagainst such tobacco product manufacturer by the State or any releasing partylocated or residing in the State. Funds shall be released from escrow underthis subparagraph (i) in the order in which they were placed into escrow and(ii) only to the extent and at the time necessary to make payments requiredunder such judgment or settlement;
(B) to the extent that a tobacco product manufacturer establishes thatthe amount it was required to place into escrow in a particular year wasgreater than the State's allocable share of the total payments that suchmanufacturer would have been required to make in that year under the MasterSettlement Agreement (as determined pursuant to section IX(i)(2) of the MasterSettlement Agreement, and before any of the adjustments or offsets describedin section IX(i)(3) of that Agreement other than the Inflation Adjustment) hadit been a participating manufacturer, the excess shall be released from escrowand revert back to such tobacco product manufacturer; or
(C) to the extent not released from escrow under subparagraphs (A) or(B), funds shall be released from escrow and revert back to such tobaccoproduct manufacturer twenty-five years after the date on which they wereplaced into escrow.
(3) Each tobacco product manufacturer that elects to place funds intoescrow pursuant to this subsection shall annually certify to the AttorneyGeneral that it is in compliance with this subsection. The Attorney Generalmay bring a civil action on behalf of the State against any tobacco productmanufacturer that fails to place into escrow the funds required under thissection. Any tobacco product manufacturer that fails in any year to placeinto escrow the funds required under this section shall--
(A) be required within 15 days to place such funds into escrow as shallbring it into compliance with this section. The court, upon a finding of aviolation of this subsection, may impose a civil penalty to be paid to theState's general revenue fund in an amount not to exceed 5 percent of theamount improperly withheld from escrow per day of the violation and in a totalamount not to exceed 100 percent of the original amount improperly withheldfrom escrow;
(B) in the case of a knowing violation, be required within 15 days toplace such funds into escrow as shall bring it into compliance with thissection. The court, upon a finding of a knowing violation of this subsection,may impose a civil penalty to be paid to the State's general revenue fund inan amount not to exceed 15 percent of the amount improperly withheld fromescrow per day of the violation and in a total amount not to exceed 300percent of the original amount improperly withheld from escrow; and
(C) in the case of a second knowing violation, be prohibited fromselling cigarettes to consumers within the State (whether directly or througha distributor, retailer or similar intermediary) for a period not to exceed 2years.
Each failure to make an annual deposit required under this section shallconstitute a separate violation. Any tobacco product manufacturer thatviolates the provisions of this section shall pay the State's cost andattorney's fees incurred during a successful prosecution under this section.
(L. 1999 H.B. 814 § 2)Effective 7-1-99