§ 66-290. Definitions.
Article 37.
Tobacco Reserve Fund andEscrow Compliance.
Part 1. Tobacco Reserve Fund.
§ 66‑290. Definitions.
As used in this Article:
(1) "Adjusted forinflation" means increased in accordance with the formula for inflationadjustment set forth in Exhibit C to the Master Settlement Agreement.
(2) "Affiliate"means a person who directly or indirectly owns or controls, is owned orcontrolled by, or is under common ownership or control with, another person.Solely for purposes of this definition, the terms "owns," "isowned," and "ownership" mean ownership of an equity interest, orthe equivalent thereof, of ten percent (10%) or more, and the term"person" means an individual, partnership, committee, association,corporation, or any other organization or group of persons.
(3) "Allocableshare" means Allocable Share as that term is defined in the MasterSettlement Agreement.
(4) "Cigarette"means any product that contains nicotine, is intended to be burned or heatedunder ordinary conditions of use, and consists of or contains (i) any roll oftobacco wrapped in paper or in any substance not containing tobacco; or (ii)tobacco, in any form, that is functional in the product, which, because of itsappearance, the type of tobacco used in the filler, or its packaging andlabeling, is likely to be offered to, or purchased by, consumers as acigarette; or (iii) any roll of tobacco wrapped in any substance containingtobacco which, because of its appearance, the type of tobacco used in thefiller, or its packaging and labeling, is likely to be offered to, or purchasedby, consumers as a cigarette described in clause (i) of this definition. Theterm "cigarette" includes "roll‑your‑own"(i.e., any tobacco which, because of its appearance, type, packaging, orlabeling is suitable for use and likely to be offered to, or purchased by,consumers as tobacco for making cigarettes). For purposes of this definition of"cigarette," 0.09 ounces of "roll‑your‑own"tobacco shall constitute one individual "cigarette."
(5) "Master SettlementAgreement" means the settlement agreement (and related documents) enteredinto on November 23, 1998, by the State and leading United States tobaccoproduct manufacturers.
(6) "Qualifiedescrow fund" means an escrow arrangement with a federally or Statechartered financial institution having no affiliation with any tobacco productmanufacturer and having assets of at least one billion dollars ($1,000,000,000)where such arrangement requires that such financial institution hold theescrowed funds' principal for the benefit of releasing parties and prohibitsthe tobacco product manufacturer placing the funds into escrow from using,accessing, or directing the use of the funds' principal except as consistentwith G.S. 66‑291(b).
(7) "Releasedclaims" means Released Claims as that term is defined in the MasterSettlement Agreement.
(8) "Releasingparties" means Releasing Parties as that term is defined in the MasterSettlement Agreement.
(9) "TobaccoProduct Manufacturer" means an entity that after the effective date ofthis Article directly (and not exclusively through any affiliate):
a. Manufacturescigarettes anywhere that such manufacturer intends to be sold in the UnitedStates, including cigarettes intended to be sold in the United States throughan importer (except where such importer is an original participatingmanufacturer, as that term is defined in the Master Settlement Agreement, thatwill be responsible for the payments under the Master Settlement Agreement withrespect to such cigarettes as a result of the provisions of subsection II(mm)of the Master Settlement Agreement and that pays the taxes specified insubsection II(z) of the Master Settlement Agreement, and provided that themanufacturer of such cigarettes does not market or advertise such cigarettes inthe United States);
b. Is the firstpurchaser anywhere for resale in the United States of cigarettes manufacturedanywhere that the manufacturer does not intend to be sold in the United States;or
c. Becomes a successorof an entity described in sub‑subdivision a. or b. of this subdivision.
Theterm "Tobacco Product Manufacturer" shall not include an affiliate ofa tobacco product manufacturer unless such affiliate itself falls within any ofsub‑subdivisions a. through c. of this subdivision.
(10) "Unitssold" means the number of individual cigarettes sold in the State by theapplicable tobacco product manufacturer (whether directly or through adistributor, retailer, or similar intermediary or intermediaries) during theyear in question, as measured by excise taxes collected by the State on packs(or "roll‑your‑own" tobacco containers). The Secretary ofRevenue shall promulgate such rules as are necessary to ascertain the amount ofState excise tax paid on the cigarettes of such tobacco product manufacturerfor each year. In lieu of adopting rules, the Secretary of Revenue may issuebulletins or directives requiring taxpayers to submit to the Department ofRevenue the information necessary to make the required determination under thissubdivision. (1999‑311,s. 1; 2002‑145, s. 2.)