3.2-4206.1 - Bond requirement for newly qualified and elevated-risk nonparticipating manufacturers.
§ 3.2-4206.1. Bond requirement for newly qualified and elevated-risknonparticipating manufacturers.
A. Notwithstanding any other provision of law, if a newly qualifiednonparticipating manufacturer is to be listed in the Virginia TobaccoDirectory (the Directory), or if the Attorney General reasonably determinesthat any nonparticipating manufacturer who has filed a certification pursuantto § 3.2-4205 poses an elevated risk for noncompliance with this article orwith Article 1 (§ 3.2-4200 et seq.) of this chapter, neither suchnonparticipating manufacturer nor any of its brand families shall be includedin the Directory unless and until such nonparticipating manufacturer, or itsUnited States importer that undertakes joint and several liability for themanufacturer's performance in accordance with § 3.2-4208.1, has posted a bondin accordance with this section.
B. The bond shall be posted by corporate surety located within the UnitedStates in an amount equal to the greater of $50,000 or the amount of escrowthe manufacturer in either its current or predecessor form was required todeposit as a result of its previous calendar year's sales in Virginia. Thebond shall be written in favor of the Commonwealth of Virginia and shall beconditioned on the performance by the nonparticipating manufacturer, or itsUnited States importer that undertakes joint and several liability for themanufacturer's performance in accordance with subsection A of § 3.2-4201, ofall of its duties and obligations under this article and Article 1 (§3.2-4200 et seq.) of this chapter during the year in which the certificationis filed and the next succeeding calendar year.
C. A nonparticipating manufacturer may be deemed to pose an elevated risk fornoncompliance with this article or Article 1 (§ 3.2-4200 et seq.) of thischapter if:
1. The nonparticipating manufacturer or any affiliate thereof has underpaidan escrow obligation with respect to any state at any time during thecalendar year or within the past three calendar years unless (i) themanufacturer did not make underpayment knowingly or recklessly and themanufacturer promptly cured the underpayment within 180 days of notice of it,or (ii) the underpayment or lack of payment is the subject of a good faithdispute as documented to the satisfaction of the Attorney General and theunderpayment is cured within 180 days of entry of a final order establishingthe amount of the required escrow payment;
2. Any state has removed the manufacturer or its brands or brand families oran affiliate or any of the affiliate's brands or brand families from thestate's tobacco directory for noncompliance with the state law at any timeduring the calendar year or within the past three calendar years; or
3. Any state has litigation pending against, or an unsatisfied judgmentagainst, the manufacturer or any affiliate thereof for escrow or forpenalties, costs, or attorney fees related to noncompliance with state escrowlaws.
D. As used in this section "newly qualified nonparticipating manufacturer"means a nonparticipating manufacturer that has not previously been listed inthe Virginia Tobacco Directory. Such manufacturers may be required to post abond in accordance with this section for the first three years of theirlisting, or longer if they have been determined to pose an elevated risk fornoncompliance.
(2008, c. 758, § 3.1-336.5:1.)