(a)Any tobacco product manufacturer selling cigarettes to
consumers within the state, whether directly or through a
distributor, retailer or similar intermediary or intermediaries,
after the date of enactment of this act shall do one (1) of the
following:
(i)Become a participating manufacturer, as that term
is defined in section II(jj) of the master settlement agreement,
and generally perform its financial obligations under the master
settlement agreement; or
(ii)Place into a qualified escrow fund by April 15
of the year following the year in question the following
amounts, as such amounts are adjusted for inflation:
(A)In 2000, $.0104712 per unit sold after the
effective date of this act;
(B)For each of 2001 and 2002, $.0136125 per
unit sold;
(C)For each of 2003 through 2006, $.0167
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(a) Any tobacco product manufacturer selling cigarettes to
consumers within the state, whether directly or through a
distributor, retailer or similar intermediary or intermediaries,
after the date of enactment of this act shall do one (1) of the
following:
(i) Become a participating manufacturer, as that term
is defined in section II(jj) of the master settlement agreement,
and generally perform its financial obligations under the master
settlement agreement; or
(ii) Place into a qualified escrow fund by April 15
of the year following the year in question the following
amounts, as such amounts are adjusted for inflation:
(A) In 2000, $.0104712 per unit sold after the
effective date of this act;
(B) For each of 2001 and 2002, $.0136125 per
unit sold;
(C) For each of 2003 through 2006, $.0167539 per
unit sold;
(D) For each of 2007 and each year thereafter,
$.0188482 per unit sold.
(b) A tobacco product manufacturer that places funds into
escrow pursuant to paragraph (a)(ii) of this section shall
receive the interest or other appreciation on such funds as
earned. Such funds themselves shall be released from escrow
only under the following circumstances:
(i) To pay a judgment or settlement on any released
claim brought against such tobacco product manufacturer by the
state or any releasing party located or residing in the state.
Funds shall be released from escrow under this paragraph:
(A) In the order in which they were placed into
escrow; and
(B) Only to the extent and at the time necessary
to make payments required under such judgment or settlement.
(ii) To the extent that a tobacco product
manufacturer establishes that the amount it was required to
place into escrow on account of units sold in the state in a
particular year was greater than the master settlement agreement
payments, as determined pursuant to section IX(i) of that
agreement including after final determination of all
adjustments, that such manufacturer would have been required to
make on account of such units sold had it been a participating
manufacturer, the excess shall be released from escrow and
revert back to such tobacco product manufacturer; or
(iii) To the extent not released from escrow under
paragraph (i) or (ii) of this subsection, funds shall be
released from escrow and revert back to such tobacco product
manufacturer twenty-five (25) years after the date on which they
were placed into escrow.
(c) Each tobacco product manufacturer that elects to place
funds into escrow pursuant to this section shall annually
certify to the attorney general that it is in compliance with
this section. The attorney general may bring a civil action on
behalf of the state against any tobacco product manufacturer
that fails to place into escrow the funds required under this
section. Any tobacco product manufacturer that fails in any
year to place into escrow the funds required under this section
shall:
(i) Be required within fifteen (15) days to place
such funds into escrow as shall bring it into compliance with
this section. The court, upon a finding of a violation of this
subsection, may impose a civil penalty in an amount not to
exceed five percent (5%) of the amount improperly withheld from
escrow per day of the violation and in a total amount not to
exceed one hundred percent (100%) of the original amount
improperly withheld from escrow;
(ii) In the case of a knowing violation, be required
within fifteen (15) days to place such funds into escrow as
shall bring it into compliance with this section. The court,
upon a finding of a knowing violation of this subsection, may
impose a civil penalty in an amount not to exceed fifteen
percent (15%) of the amount improperly withheld from escrow per
day of the violation and in a total amount not to exceed three
hundred percent (300%) of the original amount improperly
withheld from escrow; and
(iii) In the case of a second knowing violation, be
prohibited from selling cigarettes to consumers within the
state, whether directly or through a distributor, retailer or
similar intermediary, for a period not to exceed two (2) years.
(d) Each failure to make an annual deposit required under
this section shall constitute a separate violation.