50-6a03.Requirements for sale of cigarettes;penalties.Any tobacco product manufacturer selling cigarettes to consumerswithin the state (whether directly or through a distributor, retailer orsimilar intermediary or intermediaries) after the effective date of this actshall do one of the following:
(a) Become a participating manufacturer (as that term is defined in sectionII(jj) of the master settlement agreement) and generally perform its financialobligations 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):
(A) 1999: $.0094241 per unit sold after the effective date of this act;
(B) 2000: $.0104712 per unit sold;
(C) for each of 2001 and 2002: $.0136125 per unit sold;
(D) for each of 2003 through 2006: $.0167539 per unit sold;
(E) for each of 2007 and each year thereafter:$.0188482 per unitsold.
(2) A tobacco product manufacturer that places funds into escrow pursuant toparagraph (1) of subsection (b) shall receive the interest or otherappreciation on such funds as earned. Such funds themselves shall be releasedfrom escrow only under the following circumstances:
(A) To pay a judgment or settlement on any released claim brought againstsuch tobacco product manufacturer by the state or any releasing party locatedor residing in the state. Funds shall be released from escrow under thissubparagraph (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 required undersuch judgment or settlement;
(B) to the extent that a tobacco product manufacturer establishes that theamount it was required to place into escrow, based on units sold in thestate of Kansas in a particular year, was greaterthan the master settlement agreementpayments, as determined pursuant to section IX(i) of that agreement including,after final determination of all adjustments, that such manufacturer would havebeen required to make based on such units sold had it been a participatingmanufacturer,the excess shall be released from escrow and revert back to such tobaccoproduct manufacturer; or
(C) to the extent not released from escrow under subparagraphs (A) or (B) ofparagraph (2) of subsection (b), funds shall be released from escrow and revertback to such tobacco product manufacturer 25 years after the date on which theywere placed into escrow.
(3) Each tobacco product manufacturer that elects to place funds into escrowpursuant to this subsection shall annually certify to the attorney general thatit is in compliance with this subsection. The attorney general may bring acivil action on behalf of the state against any tobacco product manufacturerthat fails to place into escrow the funds required under this section. Anytobacco product manufacturer that fails in any year to place into escrow thefunds required under this section shall:
(A) Be required within 15 days to place such funds into escrow as shall bringit into compliance with this section. The court, upon a finding of a violationof this subsection, may impose a civil penalty to be credited to the stategeneral fund in an amount not to exceed 5% of the amount improperly withheldfrom escrow per day of the violation and in a total amount not to exceed 100%of the original amount improperly withheld from escrow;
(B) in the case of a knowing violation, be required within 15 days to placesuch funds into escrow as shall bring it into compliance with this section. Thecourt, upon a finding of a knowing violation of this subsection, may impose acivil penalty to be paid to the state general fund in an amount not to exceed15% of the amount improperly withheld from escrow per day of the violation andin a total amount not to exceed 300% of the original amount improperly withheldfrom escrow; and
(C) in the case of a second knowing violation, be prohibited from sellingcigarettes to consumers within the state (whether directly or through adistributor, retailer or similar intermediary) for a period not to exceed twoyears.
Each failure to make an annual deposit required under this section shallconstitute a separate violation. A tobacco product manufacturer who is foundin violation of this section shall pay, in addition to other amounts assessedunder this section and pursuant to law, the costs and attorney's fees incurredby the state during a successful presentation under this paragraph (3).
History: L. 1999, ch. 136, § 3;L. 2001, ch. 20, § 2;L. 2005, ch. 178, § 1; July 1.
50-6a03.Requirements for sale of cigarettes;penalties.Any tobacco product manufacturer selling cigarettes to consumerswithin the state (whether directly or through a distributor, retailer orsimilar intermediary or intermediaries) after the effective date of this actshall do one of the following:
(a) Become a participating manufacturer (as that term is defined in sectionII(jj) of the master settlement agreement) and generally perform its financialobligations 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):
(A) 1999: $.0094241 per unit sold after the effective date of this act;
(B) 2000: $.0104712 per unit sold;
(C) for each of 2001 and 2002: $.0136125 per unit sold;
(D) for each of 2003 through 2006: $.0167539 per unit sold;
(E) for each of 2007 and each year thereafter:$.0188482 per unitsold.
(2) A tobacco product manufacturer that places funds into escrow pursuant toparagraph (1) of subsection (b) shall receive the interest or otherappreciation on such funds as earned. Such funds themselves shall be releasedfrom escrow only under the following circumstances:
(A) To pay a judgment or settlement on any released claim brought againstsuch tobacco product manufacturer by the state or any releasing party locatedor residing in the state. Funds shall be released from escrow under thissubparagraph (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 required undersuch judgment or settlement;
(B) to the extent that a tobacco product manufacturer establishes that theamount it was required to place into escrow, based on units sold in thestate of Kansas in a particular year, was greaterthan the master settlement agreementpayments, as determined pursuant to section IX(i) of that agreement including,after final determination of all adjustments, that such manufacturer would havebeen required to make based on such units sold had it been a participatingmanufacturer,the excess shall be released from escrow and revert back to such tobaccoproduct manufacturer; or
(C) to the extent not released from escrow under subparagraphs (A) or (B) ofparagraph (2) of subsection (b), funds shall be released from escrow and revertback to such tobacco product manufacturer 25 years after the date on which theywere placed into escrow.
(3) Each tobacco product manufacturer that elects to place funds into escrowpursuant to this subsection shall annually certify to the attorney general thatit is in compliance with this subsection. The attorney general may bring acivil action on behalf of the state against any tobacco product manufacturerthat fails to place into escrow the funds required under this section. Anytobacco product manufacturer that fails in any year to place into escrow thefunds required under this section shall:
(A) Be required within 15 days to place such funds into escrow as shall bringit into compliance with this section. The court, upon a finding of a violationof this subsection, may impose a civil penalty to be credited to the stategeneral fund in an amount not to exceed 5% of the amount improperly withheldfrom escrow per day of the violation and in a total amount not to exceed 100%of the original amount improperly withheld from escrow;
(B) in the case of a knowing violation, be required within 15 days to placesuch funds into escrow as shall bring it into compliance with this section. Thecourt, upon a finding of a knowing violation of this subsection, may impose acivil penalty to be paid to the state general fund in an amount not to exceed15% of the amount improperly withheld from escrow per day of the violation andin a total amount not to exceed 300% of the original amount improperly withheldfrom escrow; and
(C) in the case of a second knowing violation, be prohibited from sellingcigarettes to consumers within the state (whether directly or through adistributor, retailer or similar intermediary) for a period not to exceed twoyears.
Each failure to make an annual deposit required under this section shallconstitute a separate violation. A tobacco product manufacturer who is foundin violation of this section shall pay, in addition to other amounts assessedunder this section and pursuant to law, the costs and attorney's fees incurredby the state during a successful presentation under this paragraph (3).
History: L. 1999, ch. 136, § 3;L. 2001, ch. 20, § 2;L. 2005, ch. 178, § 1; July 1.
50-6a03.Requirements for sale of cigarettes;penalties.Any tobacco product manufacturer selling cigarettes to consumerswithin the state (whether directly or through a distributor, retailer orsimilar intermediary or intermediaries) after the effective date of this actshall do one of the following:
(a) Become a participating manufacturer (as that term is defined in sectionII(jj) of the master settlement agreement) and generally perform its financialobligations 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):
(A) 1999: $.0094241 per unit sold after the effective date of this act;
(B) 2000: $.0104712 per unit sold;
(C) for each of 2001 and 2002: $.0136125 per unit sold;
(D) for each of 2003 through 2006: $.0167539 per unit sold;
(E) for each of 2007 and each year thereafter:$.0188482 per unitsold.
(2) A tobacco product manufacturer that places funds into escrow pursuant toparagraph (1) of subsection (b) shall receive the interest or otherappreciation on such funds as earned. Such funds themselves shall be releasedfrom escrow only under the following circumstances:
(A) To pay a judgment or settlement on any released claim brought againstsuch tobacco product manufacturer by the state or any releasing party locatedor residing in the state. Funds shall be released from escrow under thissubparagraph (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 required undersuch judgment or settlement;
(B) to the extent that a tobacco product manufacturer establishes that theamount it was required to place into escrow, based on units sold in thestate of Kansas in a particular year, was greaterthan the master settlement agreementpayments, as determined pursuant to section IX(i) of that agreement including,after final determination of all adjustments, that such manufacturer would havebeen required to make based on such units sold had it been a participatingmanufacturer,the excess shall be released from escrow and revert back to such tobaccoproduct manufacturer; or
(C) to the extent not released from escrow under subparagraphs (A) or (B) ofparagraph (2) of subsection (b), funds shall be released from escrow and revertback to such tobacco product manufacturer 25 years after the date on which theywere placed into escrow.
(3) Each tobacco product manufacturer that elects to place funds into escrowpursuant to this subsection shall annually certify to the attorney general thatit is in compliance with this subsection. The attorney general may bring acivil action on behalf of the state against any tobacco product manufacturerthat fails to place into escrow the funds required under this section. Anytobacco product manufacturer that fails in any year to place into escrow thefunds required under this section shall:
(A) Be required within 15 days to place such funds into escrow as shall bringit into compliance with this section. The court, upon a finding of a violationof this subsection, may impose a civil penalty to be credited to the stategeneral fund in an amount not to exceed 5% of the amount improperly withheldfrom escrow per day of the violation and in a total amount not to exceed 100%of the original amount improperly withheld from escrow;
(B) in the case of a knowing violation, be required within 15 days to placesuch funds into escrow as shall bring it into compliance with this section. Thecourt, upon a finding of a knowing violation of this subsection, may impose acivil penalty to be paid to the state general fund in an amount not to exceed15% of the amount improperly withheld from escrow per day of the violation andin a total amount not to exceed 300% of the original amount improperly withheldfrom escrow; and
(C) in the case of a second knowing violation, be prohibited from sellingcigarettes to consumers within the state (whether directly or through adistributor, retailer or similar intermediary) for a period not to exceed twoyears.
Each failure to make an annual deposit required under this section shallconstitute a separate violation. A tobacco product manufacturer who is foundin violation of this section shall pay, in addition to other amounts assessedunder this section and pursuant to law, the costs and attorney's fees incurredby the state during a successful presentation under this paragraph (3).
History: L. 1999, ch. 136, § 3;L. 2001, ch. 20, § 2;L. 2005, ch. 178, § 1; July 1.
