State Codes and Statutes
Statutes > Utah > Title-59 > Chapter-22 > 59-22-20359-22-203. Requirements.
(1) Any tobacco product manufacturer selling cigarettes to consumers within the State(whether directly or through a distributor, retailer or similar intermediary or intermediaries) afterthe date of enactment of this Act shall do one of the following:
(a) become a participating manufacturer (as that term is defined in Section II(jj) of theMaster Settlement Agreement) and generally perform its financial obligations under the MasterSettlement Agreement; or
(b) place into a qualified escrow fund by April 15 of the year following the year inquestion the following amounts (as such amounts are adjusted for inflation):
(i) 1999: $.0094241 per unit sold after the date of enactment of this Act;
(ii) 2000: $.0104712 per unit sold;
(iii) for each of 2001 and 2002: $.0136125 per unit sold;
(iv) for each of 2003 through 2006: $.0167539 per unit sold; and
(v) for each of 2007 and each year thereafter: $.0188482 per unit sold.
(2) A tobacco product manufacturer that places funds into escrow pursuant to Subsection(1)(b) shall receive the interest or other appreciation on such funds as earned. Such fundsthemselves shall be released from escrow only under the following circumstances:
(a) to pay a judgment or settlement on any released claim brought against such tobaccoproduct manufacturer by the State or any releasing party located or residing in the State. Fundsshall be released from escrow under this Subsection (2)(a):
(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 under suchjudgment or settlement;
(b) to the extent that a tobacco product manufacturer establishes that the amount it wasrequired to place into escrow on account of units sold in the State in a particular year was greaterthan the Master Settlement Agreement payments, as determined pursuant to Section IX(i) of thatAgreement including after final determination of all adjustments, that such manufacturer wouldhave been required to make on account of such units sold had it been a participatingmanufacturer, the excess shall be released from escrow and revert back to such tobacco productmanufacturer; or
(c) to the extent not released from escrow under Subsection (2)(a) or (b), funds shall bereleased from escrow and revert back to such tobacco product manufacturer 25 years after thedate on which they were placed into escrow.
(3) Each tobacco product manufacturer that elects to place funds into escrow pursuant toSubsection (1)(b) shall annually certify to the commission that it is in compliance withSubsection (1)(b) and Subsection (2). The commission may bring a civil action on behalf of theState against any tobacco product manufacturer that fails to place into escrow the funds requiredunder Subsection (1)(b) and Subsection (2). Any tobacco product manufacturer that fails in anyyear to place into escrow the funds required under this Subsection (1)(b) and Subsection (2)shall:
(a) be required within 15 days to place such funds into escrow as shall bring it intocompliance with Subsection (1)(b) and Subsection (2). The court, upon a finding of a violationof Subsection (1)(b) or Subsection (2), may impose a civil penalty to be paid to the General Fundin an amount not to exceed 5% of the amount improperly withheld from escrow per day of theviolation 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 place such fundsinto escrow as shall bring it into compliance with Subsection (1)(b) and Subsection (2). Thecourt, upon a finding of a knowing violation of Subsection (1)(b) or Subsection (2), may imposea civil penalty to be paid to the General Fund of the State in an amount not to exceed 15% of theamount improperly withheld from escrow per day of the violation and in a total amount not toexceed 300% of the original amount improperly withheld from escrow; and
(c) in the case of a second knowing violation, be prohibited from selling cigarettes toconsumers within the State (whether directly or through a distributor, retailer or similarintermediary) for a period not to exceed 2 years.
(4) Each failure to make an annual deposit required under Subsection (1)(b) shallconstitute a separate violation.
(5) A court shall award the State its costs and attorneys fees incurred in bringing anyaction in which the State establishes that a tobacco product manufacturer has violated thissection.
Amended by Chapter 53, 2004 General Session
