§ 1399-NN — Findings and purpose

§ 1399-nn. Findings and purpose. 1. Cigarette smoking presents serious\npublic health concerns to the state and to the citizens of the state.\nThe Surgeon General has determined that smoking causes lung cancer,\nheart disease and other serious diseases, and that there are hundreds of\nthousands of tobacco-related deaths in the United States each year.\nThese diseases most often do not appear until many years after the\nperson in question begins smoking.\n 2. Cigarette smoking also presents serious financial concerns for the\nstate. Under certain health-care programs, the state may have a legal\nobligation to provide medical assistance to eligible persons for health\nconditions associated with cigarette smoking, and those persons may have\na legal entitlement to receive such medical assistance.\n 3. Under these programs, the state pays millions of dollars each year\nto provide medical assistance for these persons for health conditions\nassociated with cigarette smoking.\n 4. It is the policy of the state that financial burdens imposed on the\nstate by cigarette smoking be borne by tobacco product manufacturers\nrather than by the state to the extent that such manufacturers either\ndetermine to enter into a settlement with the state or are found\nculpable by the courts.\n 5. On November twenty-third, nineteen hundred ninety-eight, leading\nUnited States tobacco product manufacturers entered into a settlement\nagreement, entitled the "Master Settlement Agreement," with the state.\nThe master settlement agreement obligates these manufacturers, in return\nfor a release of past, present and certain future claims against them as\ndescribed therein, to pay substantial sums to the state (tied in part to\ntheir volume of sales); to fund a national foundation devoted to the\ninterests of public health; and to make substantial changes in their\nadvertising and marketing practices and corporate culture, with the\nintention of reducing underage smoking.\n 6. It would be contrary to the policy of the state if tobacco product\nmanufacturers who determine not to enter into such a settlement could\nuse a resulting cost advantage to derive large, short-term profits in\nthe years before liability may arise without ensuring that the state\nwill have an eventual source of recovery from them if they are proven to\nhave acted culpably. It is thus in the interest of the state to require\nthat such manufacturers establish a reserve fund to guarantee a source\nof compensation and to prevent such manufacturers from deriving large,\nshort-term profits and then becoming judgment-proof before liability may\narise.\n