093_HB3518

 
                                     LRB093 10971 LCB 11570 b

 1        AN ACT concerning tobacco.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Tobacco Product Manufacturers' Escrow Act
 5    is amended by changing Section 15 as follows:

 6        (30 ILCS 168/15)
 7        Sec. 15.  Requirements.
 8        (a)  Any tobacco product manufacturer selling  cigarettes
 9    to  consumers  within the State of Illinois (whether directly
10    or through a distributor, retailer, or  similar  intermediary
11    or intermediaries) after the effective date of this Act shall
12    do one of the following:
13             (1)  become  a  participating  manufacturer (as that
14        term  is  defined  in  Section  II(jj)  of   the   Master
15        Settlement    Agreement)  and   generally   perform   its
16        financial  obligations  under   the   Master   Settlement
17        Agreement; or
18             (2) (A)  place into a qualified escrow fund by April
19             15  of  the  year following the year in question the
20             following amounts (as such amounts are adjusted  for
21             inflation):
22                       (i)  For  1999:   $0.0094241 per unit sold
23                  after the effective date of this Act;
24                       (ii)  For 2000:  $0.0104712 per unit sold;
25                       (iii)  For  each   of   2001   and   2002:
26                  $0.0136125  per unit sold;
27                       (iv)  For   each  of  2003  through  2006:
28                  $0.0167539  per unit sold;
29                       (v)  For  each  of  2007  and  each   year
30                  thereafter:  $0.0188482 per unit sold.
31                  (B)  A tobacco product manufacturer that places
 
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 1             funds  into escrow pursuant to subdivision (a)(2)(A)
 2             shall receive the interest or other appreciation  on
 3             the  funds as earned.  The funds themselves shall be
 4             released  from  escrow  only  under  the   following
 5             circumstances:
 6                       (i)  to  pay  a  judgment or settlement on
 7                  any released claim brought against the  tobacco
 8                  product   manufacturer  by  the  State  or  any
 9                  releasing party  located  or  residing  in  the
10                  State.   Funds  shall  be  released from escrow
11                  under this  subdivision  (a)(2)(B)(i):  (I)  in
12                  the  order  in  which  they  were  placed  into
13                  escrow; and (II)  only to the extent and at the
14                  time  necessary to make payments required under
15                  such judgment or settlement;
16                       (ii)  to the extent that a tobacco product
17                  manufacturer establishes that the amount it was
18                  required to place into  escrow  on  account  of
19                  units  sold  in  the State in a particular year
20                  was  greater   than   the   Master   Settlement
21                  Agreement  payments,  as determined pursuant to
22                  Section IX(i) of that  Agreement,  after  final
23                  determination  of  all  adjustments,  that  the
24                  manufacturer  would  have been required to make
25                  on  account  of  the  units  sold  the  State's
26                  allocable share of the total payments that such
27                  manufacturer would have been required  to  make
28                  in   that  year  under  the  Master  Settlement
29                  Agreement (as determined  pursuant  to  Section
30                  IX(i)(2)  of  the  Master Settlement Agreement,
31                  and before any of the  adjustments  or  offsets
32                  described in Section IX(i)(3) of that Agreement
33                  other  than  the  Inflation  Adjustment) had it
34                  been a Participating Manufacturer,  the  excess
 
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 1                  shall  be  released from escrow and revert back
 2                  to such tobacco product manufacturer; or
 3                       (iii)  to the  extent  not  released  from
 4                  escrow   under   subdivisions  (a)(2)(B)(i)  or
 5                  (a)(2)(B)(ii), funds  shall  be  released  from
 6                  escrow  and revert back to such tobacco product
 7                  manufacturer 25 years after the date  on  which
 8                  they were placed into escrow.
 9                  (C)  Each  tobacco  product  manufacturer  that
10             elects  to  place funds into escrow pursuant to this
11             subdivision (a)(2) shall  annually  certify  to  the
12             Attorney  General that it is in compliance with this
13             subdivision (a)(2).  The Attorney General may  bring
14             a  civil  action  on behalf of the State of Illinois
15             against any tobacco product manufacturer that  fails
16             to  place  into escrow the funds required under this
17             subdivision    (a)(2).     Any    tobacco    product
18             manufacturer that fails in any year  to  place  into
19             escrow  the  funds  required  under this subdivision
20             (a)(2) shall:
21                       (i)  be required within 15 days  to  place
22                  such  funds  into escrow as shall bring it into
23                  compliance with this Section.  The court,  upon
24                  a  finding  of  a violation of this subdivision
25                  (a)(2), may impose a civil penalty to  be  paid
26                  into  the General Revenue Fund in an amount not
27                  to exceed 5% of the amount improperly  withheld
28                  from  escrow  per day of the violation and in a
29                  total amount not to exceed 100% of the original
30                  amount improperly withheld from escrow;
31                       (ii)  in the case of a knowing  violation,
32                  be  required within 15 days to place such funds
33                  into escrow as shall bring it  into  compliance
34                  with  this  Section.  The court, upon a finding
 
                            -4-      LRB093 10971 LCB 11570 b
 1                  of a  knowing  violation  of  this  subdivision
 2                  (a)(2),  may  impose a civil penalty to be paid
 3                  into the General Revenue Fund in an amount  not
 4                  to exceed 15% of the amount improperly withheld
 5                  from  escrow  per day of the violation and in a
 6                  total amount not to exceed 300% of the original
 7                  amount improperly withheld from escrow; and
 8                       (iii)  in the case  of  a  second  knowing
 9                  violation,    be    prohibited   from   selling
10                  cigarettes to consumers  within  the  State  of
11                  Illinois   (whether   directly   or  through  a
12                  distributor, retailer, or similar intermediary)
13                  for a period not to exceed 2 years.
14        (b)  Each failure to  make  an  annual  deposit  required
15    under this Section shall constitute a separate violation.  If
16    a  tobacco product manufacturer is successfully prosecuted by
17    the Attorney General for a violation of  subdivision  (a)(2),
18    the tobacco product manufacturer must pay, in addition to any
19    fine  imposed  by  a  court, the State's costs and attorney's
20    fees incurred in the prosecution.
21    (Source: P.A. 91-41, eff. 6-30-99.)