2005 Nevada Revised Statutes - Chapter 370A — Manufacturers of Tobacco Products

CHAPTER 370A - MANUFACTURERS OF TOBACCOPRODUCTS

NRS 370A.010 Definitions.

NRS 370A.020 Adjustedfor inflation defined.

NRS 370A.030 Affiliatedefined.

NRS 370A.040 Allocableshare defined.

NRS 370A.050 Cigarettedefined.

NRS 370A.060 Manufacturerof tobacco products defined.

NRS 370A.070 MasterSettlement Agreement defined.

NRS 370A.080 Participatingmanufacturer defined.

NRS 370A.090 Qualifiedescrow fund defined.

NRS 370A.100 Releasedclaims defined.

NRS 370A.110 Releasingparties defined.

NRS 370A.120 Unitssold defined.

NRS 370A.130 Adoptionof regulations to ascertain amount of excise tax collected from each manufacturer.

NRS 370A.140 Participationin Master Settlement Agreement or deposits into qualified escrow fund required.

NRS 370A.150 Depositsinto escrow: Disposition of interest; release of principal. [Effective untilthe date a court of competent jurisdiction enters a judgment determining thatsubsection 2 of this section is unconstitutional.]

NRS 370A.150 Depositsinto escrow: Disposition of interest; release of principal. [Effective from thedate a court of competent jurisdiction enters a judgment determining thatformer subsection 2 of this section is unconstitutional until the date such acourt enters a judgment determining that the repeal of former subsection 2 ofthis section is unconstitutional.]

NRS 370A.150 Depositsinto escrow: Disposition of interest; release of principal. [Effective on thedate a court of competent jurisdiction enters a judgment determining that therepeal of former subsection 2 of this section is unconstitutional.]

NRS 370A.160 Complianceby manufacturer: Annual certification; enforcement; penalties for violations.

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MANUFACTURERS OF TOBACCO PRODUCTS

NRS 370A.010 Definitions. As used in this chapter, the words and terms defined in NRS 370A.020 to 370A.120, inclusive, have the meaningsascribed to them in those sections.

(Added to NRS by 1999, 1106)

NRS 370A.020 Adjustedfor inflation defined. Adjusted forinflation means increased in accordance with the formula for inflationadjustment set forth in Exhibit C to the Master Settlement Agreement.

(Added to NRS by 1999, 1106)

NRS 370A.030 Affiliatedefined. Affiliate means a person whodirectly or indirectly owns or controls, is owned or controlled by, or is undercommon ownership or control with, another person. Solely for the purposes ofthis definition, the terms owns, is owned and ownership mean ownership ofan equity interest, or the equivalent thereof, of ten percent or more, and theterm person means an individual, partnership, committee, association,corporation or any other organization or group of persons.

(Added to NRS by 1999, 1106)

NRS 370A.040 Allocableshare defined. Allocable share has the meaningascribed to it in section II(f) of the Master Settlement Agreement.

(Added to NRS by 1999, 1106)

NRS 370A.050 Cigarettedefined. Cigarette means any product thatcontains nicotine, is intended to be burned or heated under ordinary conditionsof use, and consists of or contains:

1. Any roll of tobacco wrapped in paper or in anyother substance not containing tobacco;

2. Tobacco, in any form, that is functional in theproduct, which because of its appearance, the type of tobacco used in thefiller, or its packaging and labeling, is likely to be offered to or purchasedby consumers as a cigarette; or

3. Any roll of tobacco wrapped in any substancecontaining tobacco which, because of its appearance, the type of tobacco usedin the filler, or its packaging and labeling, is likely to be offered to orpurchased by consumers as a cigarette described in subsection 1.

The termincludes roll-your-own tobacco, that is, any tobacco which because of itsappearance, type, packaging or labeling is suitable for use and likely to beoffered to or purchased by consumers as tobacco for making cigarettes. For thepurposes of this section, 0.09 ounces of roll-your-own tobacco constitutesone individual cigarette.

(Added to NRS by 1999, 1106)

NRS 370A.060 Manufacturerof tobacco products defined. Manufacturer oftobacco products means an entity that, after May 24, 1999, directly, and notexclusively through an affiliate:

1. Manufactures cigarettes anywhere that suchmanufacturer intends to be sold in the United States, including cigarettesintended to be sold in the United States through an importer (except where suchimporter is an original participating manufacturer, as that term is defined inthe Master Settlement Agreement, that will be responsible for the paymentsunder the Master Settlement Agreement with respect to such cigarettes as aresult of the provisions of subsection II(mm) of the Master SettlementAgreement and that pays the taxes specified in subsection II(z) of the MasterSettlement Agreement, and provided that the manufacturer of such cigarettesdoes not market or advertise such cigarettes in the United States);

2. Is the first purchaser anywhere for resale in theUnited States of cigarettes manufactured anywhere that the manufacturer doesnot intend to be sold in the United States; or

3. Becomes a successor of an entity described insubsection 1 or 2.

The termdoes not include an affiliate of a manufacturer of tobacco products unless theaffiliate itself is an entity described in subsection 1, 2 or 3.

(Added to NRS by 1999, 1107)

NRS 370A.070 MasterSettlement Agreement defined. Master SettlementAgreement means the settlement agreement, and related documents, entered intoon November 23, 1998, by this state and leading United States manufacturers oftobacco products.

(Added to NRS by 1999, 1107)

NRS 370A.080 Participatingmanufacturer defined. Participatingmanufacturer has the meaning ascribed to it in section II(jj) of the MasterSettlement Agreement.

(Added to NRS by 1999, 1107)

NRS 370A.090 Qualifiedescrow fund defined. Qualified escrow fundmeans an escrow arrangement with a federally or state-chartered financialinstitution, that has no affiliation with any manufacturer of tobacco productsand has assets of at least $1 billion where the arrangement requires thefinancial institution to hold the principal of the amount deposited in escrowfor the benefit of releasing parties and prohibits the manufacturer of tobaccoproducts which deposits the money from using, having access to or directing theuse of the principal of the amount deposited except as permitted under NRS 370A.150.

(Added to NRS by 1999, 1107)

NRS 370A.100 Releasedclaims defined. Released claims has themeaning ascribed to it in section II(nn) of the Master Settlement Agreement.

(Added to NRS by 1999, 1107)

NRS 370A.110 Releasingparties defined. Releasing parties has themeaning ascribed to it in section II(pp) of the Master Settlement Agreement.

(Added to NRS by 1999, 1107)

NRS 370A.120 Unitssold defined. Units sold means, withrespect to a particular manufacturer of tobacco products for a particular year,the number of individual cigarettes sold in this state by the manufacturerdirectly or through a distributor, retailer or similar intermediary orintermediaries during that year, as measured by excise taxes collected by theState on packs, or containers of roll-your-own tobacco, bearing the excisestamp of this state.

(Added to NRS by 1999, 1107)

NRS 370A.130 Adoptionof regulations to ascertain amount of excise tax collected from eachmanufacturer. The Department of Taxation shalladopt such regulations as are necessary to ascertain the amount of excise taxcollected by the State on the cigarettes of each manufacturer of tobaccoproducts for each year.

(Added to NRS by 1999, 1107)

NRS 370A.140 Participationin Master Settlement Agreement or deposits into qualified escrow fund required. A manufacturer of tobacco products that sells cigarettesto consumers in this state, directly or through a distributor, retailer orsimilar intermediary or intermediaries, after May 24, 1999, shall do one of thefollowing:

1. Become a participating manufacturer and generallyperform its financial obligations under the Master Settlement Agreement; or

2. Deposit into a qualified escrow fund, on or beforeApril 15 of the year following the year in question, the following amounts assuch amounts are adjusted for inflation:

(a) For the year 1999, $0.0094241 for each unit soldafter May 24, 1999;

(b) For the year 2000, $0.0104712 for each unit sold;

(c) For each of the years 2001 and 2002, $0.0136125 foreach unit sold;

(d) For each of the years 2003 through 2006, $0.0167539for each unit sold; and

(e) For each of the year 2007 and each year thereafter,$0.0188482 for each unit sold.

(Added to NRS by 1999, 1108)

NRS 370A.150 Depositsinto escrow: Disposition of interest; release of principal. [Effective untilthe date a court of competent jurisdiction enters a judgment determining thatsubsection 2 of this section is unconstitutional.] Amanufacturer of tobacco products that deposits money into escrow pursuant to subsection2 of NRS 370A.140 shall receive theinterest or other appreciation on the deposit as earned. The principal of thedeposit may be released from escrow only under the following circumstances:

1. To pay a judgment or settlement on a released claimbrought against that manufacturer by this State or by a releasing party locatedor residing in this State. Money may be released from escrow under thissubsection only in the order in which it was deposited into escrow and only tothe extent and at the time necessary to make payments required under thejudgment or settlement.

2. To the extent that the manufacturer establishesthat the amount it was required to deposit into escrow on account of units soldin the State in a particular year was greater than the Master SettlementAgreement payments, as determined pursuant to section IX(i) of that Agreementincluding after final determination of all adjustments, that such manufacturerwould have been required to make on account of such units sold if themanufacturer had been a participating manufacturer, the excess must be releasedfrom escrow and revert to the manufacturer.

3. To the extent not released from escrow undersubsection 1 or 2, deposits must be released from escrow and revert to themanufacturer 25 years after the date on which they were deposited.

(Added to NRS by 1999, 1108; A 2005, 379)

NRS 370A.150 Deposits into escrow: Disposition ofinterest; release of principal. [Effective from the date a court of competentjurisdiction enters a judgment determining that former subsection 2 of thissection is unconstitutional until the date such a court enters a judgmentdetermining that the repeal of former subsection 2 of this section isunconstitutional.] A manufacturer of tobaccoproducts that deposits money into escrow pursuant to subsection 2 of NRS 370A.140 shall receive the interestor other appreciation on the deposit as earned. The principal of the depositmay be released from escrow only under the following circumstances:

1. To pay a judgment or settlement on a released claimbrought against that manufacturer by this State or by a releasing party locatedor residing in this State. Money may be released from escrow under thissubsection only in the order in which it was deposited into escrow and only tothe extent and at the time necessary to make payments required under thejudgment or settlement.

2. To the extent not released from escrow undersubsection 1, deposits must be released from escrow and revert to themanufacturer 25 years after the date on which they were deposited.

(Added to NRS by 1999, 1108; A 2005, 379, 380, effective fromthe date a court of competent jurisdiction enters a judgment determining thatformer subsection 2 of this section is unconstitutional until the date such acourt enters a judgment determining that the repeal of former subsection 2 ofthis section is unconstitutional)

NRS 370A.150 Deposits into escrow: Disposition ofinterest; release of principal. [Effective on the date a court of competentjurisdiction enters a judgment determining that the repeal of former subsection2 of this section is unconstitutional.] Amanufacturer of tobacco products that deposits money into escrow pursuant tosubsection 2 of NRS 370A.140 shallreceive the interest or other appreciation on the deposit as earned. Theprincipal of the deposit may be released from escrow only under the followingcircumstances:

1. To pay a judgment or settlement on a released claimbrought against that manufacturer by this State or by a releasing party locatedor residing in this State. Money may be released from escrow under this subsectiononly in the order in which it was deposited into escrow and only to the extentand at the time necessary to make payments required under the judgment orsettlement.

2. To the extent that the manufacturer establishesthat the amount it was required to deposit into escrow in a particular year wasgreater than this States allocable share of the total payments that themanufacturer would have been required to make in that year under the MasterSettlement Agreement if the manufacturer had been a participating manufacturer,as such payments are determined pursuant to section IX(i)(2) of that Agreementand before any of the adjustments or offsets described in section IX(i)(3) ofthat Agreement other than the inflation adjustment, the excess must be releasedfrom escrow and revert to the manufacturer.

3. To the extent not released from escrow undersubsection 1 or 2, deposits must be released from escrow and revert to themanufacturer 25 years after the date on which they were deposited.

(Added to NRS by 1999, 1108; A 2005, 379, 380, effective on thedate a court of competent jurisdiction enters a judgment determining that therepeal of former subsection 2 of this section is unconstitutional)

NRS 370A.160 Complianceby manufacturer: Annual certification; enforcement; penalties for violations.

1. A manufacturer of tobacco products that elects todeposit money into escrow pursuant to subsection 2 of NRS 370A.140 shall annually certify tothe Attorney General that it is in compliance with that subsection and with NRS 370A.150. If the Attorney Generaldoes not receive the annual certification, he shall mail a notice to themanufacturer. The Attorney General may maintain a civil action on behalf ofthis state against any manufacturer of tobacco products which fails to depositinto escrow the amount required by NRS370A.140.

2. A manufacturer of tobacco products that fails inany year to place into escrow the money required under NRS 370A.140 shall:

(a) Be required within 15 days to place such money intoescrow as shall bring it into compliance with NRS 370A.140. The court, upon a findingof a violation of subsection 2 of NRS370A.140 or NRS 370A.150, mayimpose a civil penalty to be paid to the State General Fund in an amount not toexceed 5 percent of the amount improperly withheld from escrow per day of theviolation and in a total amount not to exceed 100 percent of the originalamount improperly withheld from escrow.

(b) In the case of a knowing violation, be requiredwithin 15 days to place such money into escrow as shall bring it intocompliance with this section. The court, upon a finding of a knowing violationof subsection 2 of NRS 370A.140 or NRS 370A.150, may impose a civil penaltyto be paid to the State General Fund in an amount not to exceed 15 percent ofthe amount improperly withheld from escrow per day of the violation and in atotal amount not to exceed 300 percent of the original amount improperly withheldfrom escrow.

(c) In the case of a second knowing violation, shall beprohibited from selling cigarettes to consumers in this state, directly orthrough a distributor, retailer or similar intermediary, for a period to befixed by the court not to exceed 2 years.

3. Each failure to make an annual deposit required by NRS 370A.140 constitutes a separateviolation.

(Added to NRS by 1999, 1108)