(a) Any tobacco productmanufacturer selling cigarettes to consumers within the State (whether directlyor through a distributor, retailer, or similar intermediary or intermediaries)after the effective date of this Article shall do one of the following:
(1) Become aparticipating manufacturer (as that term is defined in section II(jj) of theMaster Settlement Agreement) and generally perform its financial obligationsunder the Master Settlement Agreement; or
(2) Place into a qualifiedescrow fund by April 15 of the year following the year in question thefollowing amounts (as such amounts are adjusted for inflation):
a. 1999: $.0094241 perunit sold after the effective date of this Article.
b. 2000: $.0104712 perunit sold.
c. For each of 2001 and2002: $.0136125 per unit sold.
d. For each of 2003through 2006: $.0167539 per unit sold.
e. For each of 2007 andeach year thereafter: $.0188482 per unit sold.
(b) A tobacco productmanufacturer that places funds into escrow pursuant to subdivision (2) ofsubsection (a) of this section shall receive the interest or other appreciationon such funds as earned. Such funds themselves shall be released from escrowonly under the following circumstances:
(1) To pay a judgment orsettlement on any released claim brought against such tobacco productmanufacturer by the State or any releasing party located or residing in theState. Funds shall be released from escrow under this subdivision (i) in theorder in which they were placed into escrow and (ii) only to the extent and atthe time necessary to make payments required under such judgment or settlement;
(2) To the extent that atobacco product manufacturer establishes that the amount it was required toplace into escrow on account of units sold in the State in a particular yearwas greater than the Master Settlement Agreement payments, as determinedpursuant to Section IX(i) of that agreement, including after finaldetermination of all adjustments, that the manufacturer would have beenrequired to make on account of the units sold had it been a participatingmanufacturer, the excess shall be released from escrow and revert back to suchtobacco product manufacturer; or
(3) To the extent notreleased from escrow under subdivisions (1) or (2) of this subsection, fundsshall be released from escrow and revert back to such tobacco productmanufacturer 25 years after the date on which they were placed into escrow.
(c) Each tobaccoproduct manufacturer that elects to place funds into escrow pursuant to this sectionshall annually certify to the Attorney General that it is in compliance withthis section. The Attorney General may bring a civil action on behalf of theState against any tobacco product manufacturer that fails to place into escrowthe funds required under this section. Any tobacco product manufacturer thatfails in any year to place into escrow the funds required under this sectionshall:
(1) Be required within15 days to place such funds into escrow as shall bring it into compliance withthis section. The court, upon a finding of a violation either of subdivision(2) of subsection (a) of this section, of subsection (b) of this section, or ofthis section, may impose a civil penalty (the clear proceeds of which shall bepaid to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2)in an amount not to exceed five percent (5%) of the amount improperly withheldfrom escrow per day of the violation and in a total amount not to exceed onehundred percent (100%) of the original amount improperly withheld from escrow;
(2) In the case of aknowing violation, be required within 15 days to place such funds into escrowas shall bring it into compliance with this section. The court, upon a findingof a knowing violation either of subdivision (2) of subsection (a) of thissection, of subsection (b) of this section, or of this section, may impose acivil penalty (the clear proceeds of which shall be paid to the Civil Penaltyand Forfeiture Fund in accordance with G.S. 115C‑457.2) in an amount notto exceed fifteen percent (15%) of the amount improperly withheld from escrowper day of the violation and in a total amount not to exceed three hundredpercent (300%) of the original amount improperly withheld from escrow; and
(3) In the case of asecond knowing violation, be prohibited from selling cigarettes to consumerswithin the State (whether directly or through a distributor, retailer, orsimilar intermediary) for a period not to exceed two years.
Each failure to make an annualdeposit required under this section shall constitute a separate violation. (1999‑311, s. 1; 2000‑140,s. 58; 2002‑145, s. 2; 2005‑276, s. 6.12(a); 2005‑435, s.59.1(a).)
(a) Any tobacco productmanufacturer selling cigarettes to consumers within the State (whether directlyor through a distributor, retailer, or similar intermediary or intermediaries)after the effective date of this Article shall do one of the following:
(1) Become aparticipating manufacturer (as that term is defined in section II(jj) of theMaster Settlement Agreement) and generally perform its financial obligationsunder the Master Settlement Agreement; or
(2) Place into a qualifiedescrow fund by April 15 of the year following the year in question thefollowing amounts (as such amounts are adjusted for inflation):
a. 1999: $.0094241 perunit sold after the effective date of this Article.
b. 2000: $.0104712 perunit sold.
c. For each of 2001 and2002: $.0136125 per unit sold.
d. For each of 2003through 2006: $.0167539 per unit sold.
e. For each of 2007 andeach year thereafter: $.0188482 per unit sold.
(b) A tobacco productmanufacturer that places funds into escrow pursuant to subdivision (2) ofsubsection (a) of this section shall receive the interest or other appreciationon such funds as earned. Such funds themselves shall be released from escrowonly under the following circumstances:
(1) To pay a judgment orsettlement on any released claim brought against such tobacco productmanufacturer by the State or any releasing party located or residing in theState. Funds shall be released from escrow under this subdivision (i) in theorder in which they were placed into escrow and (ii) only to the extent and atthe time necessary to make payments required under such judgment or settlement;
(2) To the extent that atobacco product manufacturer establishes that the amount it was required toplace into escrow on account of units sold in the State in a particular yearwas greater than the Master Settlement Agreement payments, as determinedpursuant to Section IX(i) of that agreement, including after finaldetermination of all adjustments, that the manufacturer would have beenrequired to make on account of the units sold had it been a participatingmanufacturer, the excess shall be released from escrow and revert back to suchtobacco product manufacturer; or
(3) To the extent notreleased from escrow under subdivisions (1) or (2) of this subsection, fundsshall be released from escrow and revert back to such tobacco productmanufacturer 25 years after the date on which they were placed into escrow.
(c) Each tobaccoproduct manufacturer that elects to place funds into escrow pursuant to this sectionshall annually certify to the Attorney General that it is in compliance withthis section. The Attorney General may bring a civil action on behalf of theState against any tobacco product manufacturer that fails to place into escrowthe funds required under this section. Any tobacco product manufacturer thatfails in any year to place into escrow the funds required under this sectionshall:
(1) Be required within15 days to place such funds into escrow as shall bring it into compliance withthis section. The court, upon a finding of a violation either of subdivision(2) of subsection (a) of this section, of subsection (b) of this section, or ofthis section, may impose a civil penalty (the clear proceeds of which shall bepaid to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2)in an amount not to exceed five percent (5%) of the amount improperly withheldfrom escrow per day of the violation and in a total amount not to exceed onehundred percent (100%) of the original amount improperly withheld from escrow;
(2) In the case of aknowing violation, be required within 15 days to place such funds into escrowas shall bring it into compliance with this section. The court, upon a findingof a knowing violation either of subdivision (2) of subsection (a) of thissection, of subsection (b) of this section, or of this section, may impose acivil penalty (the clear proceeds of which shall be paid to the Civil Penaltyand Forfeiture Fund in accordance with G.S. 115C‑457.2) in an amount notto exceed fifteen percent (15%) of the amount improperly withheld from escrowper day of the violation and in a total amount not to exceed three hundredpercent (300%) of the original amount improperly withheld from escrow; and
(3) In the case of asecond knowing violation, be prohibited from selling cigarettes to consumerswithin the State (whether directly or through a distributor, retailer, orsimilar intermediary) for a period not to exceed two years.
Each failure to make an annualdeposit required under this section shall constitute a separate violation. (1999‑311, s. 1; 2000‑140,s. 58; 2002‑145, s. 2; 2005‑276, s. 6.12(a); 2005‑435, s.59.1(a).)
(a) Any tobacco productmanufacturer selling cigarettes to consumers within the State (whether directlyor through a distributor, retailer, or similar intermediary or intermediaries)after the effective date of this Article shall do one of the following:
(1) Become aparticipating manufacturer (as that term is defined in section II(jj) of theMaster Settlement Agreement) and generally perform its financial obligationsunder the Master Settlement Agreement; or
(2) Place into a qualifiedescrow fund by April 15 of the year following the year in question thefollowing amounts (as such amounts are adjusted for inflation):
a. 1999: $.0094241 perunit sold after the effective date of this Article.
b. 2000: $.0104712 perunit sold.
c. For each of 2001 and2002: $.0136125 per unit sold.
d. For each of 2003through 2006: $.0167539 per unit sold.
e. For each of 2007 andeach year thereafter: $.0188482 per unit sold.
(b) A tobacco productmanufacturer that places funds into escrow pursuant to subdivision (2) ofsubsection (a) of this section shall receive the interest or other appreciationon such funds as earned. Such funds themselves shall be released from escrowonly under the following circumstances:
(1) To pay a judgment orsettlement on any released claim brought against such tobacco productmanufacturer by the State or any releasing party located or residing in theState. Funds shall be released from escrow under this subdivision (i) in theorder in which they were placed into escrow and (ii) only to the extent and atthe time necessary to make payments required under such judgment or settlement;
(2) To the extent that atobacco product manufacturer establishes that the amount it was required toplace into escrow on account of units sold in the State in a particular yearwas greater than the Master Settlement Agreement payments, as determinedpursuant to Section IX(i) of that agreement, including after finaldetermination of all adjustments, that the manufacturer would have beenrequired to make on account of the units sold had it been a participatingmanufacturer, the excess shall be released from escrow and revert back to suchtobacco product manufacturer; or
(3) To the extent notreleased from escrow under subdivisions (1) or (2) of this subsection, fundsshall be released from escrow and revert back to such tobacco productmanufacturer 25 years after the date on which they were placed into escrow.
(c) Each tobaccoproduct manufacturer that elects to place funds into escrow pursuant to this sectionshall annually certify to the Attorney General that it is in compliance withthis section. The Attorney General may bring a civil action on behalf of theState against any tobacco product manufacturer that fails to place into escrowthe funds required under this section. Any tobacco product manufacturer thatfails in any year to place into escrow the funds required under this sectionshall:
(1) Be required within15 days to place such funds into escrow as shall bring it into compliance withthis section. The court, upon a finding of a violation either of subdivision(2) of subsection (a) of this section, of subsection (b) of this section, or ofthis section, may impose a civil penalty (the clear proceeds of which shall bepaid to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2)in an amount not to exceed five percent (5%) of the amount improperly withheldfrom escrow per day of the violation and in a total amount not to exceed onehundred percent (100%) of the original amount improperly withheld from escrow;
(2) In the case of aknowing violation, be required within 15 days to place such funds into escrowas shall bring it into compliance with this section. The court, upon a findingof a knowing violation either of subdivision (2) of subsection (a) of thissection, of subsection (b) of this section, or of this section, may impose acivil penalty (the clear proceeds of which shall be paid to the Civil Penaltyand Forfeiture Fund in accordance with G.S. 115C‑457.2) in an amount notto exceed fifteen percent (15%) of the amount improperly withheld from escrowper day of the violation and in a total amount not to exceed three hundredpercent (300%) of the original amount improperly withheld from escrow; and
(3) In the case of asecond knowing violation, be prohibited from selling cigarettes to consumerswithin the State (whether directly or through a distributor, retailer, orsimilar intermediary) for a period not to exceed two years.
Each failure to make an annualdeposit required under this section shall constitute a separate violation. (1999‑311, s. 1; 2000‑140,s. 58; 2002‑145, s. 2; 2005‑276, s. 6.12(a); 2005‑435, s.59.1(a).)
