ENROLLED
H. B. 3045
(By Mr. Speaker, Mr. Kiss)
[Passed March 7, 2003; in effect ninety days from passage.]
AN ACT to amend and reenact section three, article nine-b, chapter
sixteen of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; and to further amend said
article by adding thereto a new section, designated section
four, all relating generally to implementation of master
tobacco settlement agreement; providing allocable share cap on
payments by non-participating manufacturers and as to such
providing special severability rule and date for
implementation.
Be it enacted by the Legislature of West Virginia:
That section three, article nine-b, chapter sixteen of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted; and to further amend said
article by adding thereto a new section, designated section four,
all to read as follows:
ARTICLE 9B. IMPLEMENTING TOBACCO MASTER SETTLEMENT AGREEMENT.
§16-9B-3. Requirements.
Any tobacco product manufacturer selling cigarettes to
consumers within the state (whether directly or through a
distributor, retailer or similar intermediary or intermediaries)
after the date of enactment of this article shall do one of the
following:
(a) Become a participating manufacturer (as that term is
defined in section II(jj) of the master settlement agreement) and
generally perform its financial obligations under the master
settlement agreement; or
(b) (1) Place into a qualified escrow fund by the fifteenth
day of April of the year following the year in question the
following amounts, adjusted for inflation:
(A) For the year one thousand nine hundred ninety-nine:
$.0094241 per unit sold after the date of enactment of this
article;
(B) For the year two thousand: $.0104712 per unit sold;
(C) For each of the years two thousand one and two thousand
two: $.0136125 per unit sold;
(D) For each of the years two thousand three through two
thousand six: $.0167539 per unit sold; and
(E) For the year two thousand seven or each year thereafter:
$.0188482 per unit sold.
(2) A tobacco product manufacturer that places funds into
escrow pursuant to this subsection shall receive the interest or other appreciation on such funds as earned. Such funds themselves
shall be released from escrow only under the following
circumstances:
(A) To pay a judgment or settlement on any released claim
brought against such tobacco product manufacturer by the state or
any releasing party located or residing in the state. Funds shall
be released from escrow under this paragraph: (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 such judgment
or settlement;
(B) To the extent that a tobacco product manufacturer
establishes that the amount it was required to place into escrow on
account of units sold in the state in a particular year was greater
than the master tobacco settlement agreement payments, as
determined pursuant to section IX(i) of that agreement, including
after final determination of all adjustments, that such
manufacturer would have been required to make on account of such
units sold had it been a participating manufacturer, the excess
shall be released from escrow and revert back to such tobacco
product manufacturer; or
(C) To the extent not released from escrow under paragraph (A)
or (B) of this subdivision, funds shall be released from escrow and
revert back to the tobacco product manufacturer twenty-five years
after the date on which they were placed into escrow.
(3) Each tobacco product manufacturer that elects to place
funds into escrow pursuant to this subsection shall annually certify to the attorney general that it is in compliance with this
subsection. The attorney general may bring a civil action on behalf
of the state against any tobacco product manufacturer that fails to
place into escrow the funds required under this section. Any
tobacco product manufacturer that fails in any year to place into
escrow the funds required under this section shall:
(A) Be required within fifteen days to place such funds into
escrow as shall bring it into compliance with this section. The
court, upon a finding of a violation of this subsection, may impose
a civil penalty, to be paid to the general fund of the state, in an
amount not to exceed five percent of the amount improperly withheld
from escrow per day of the violation and in a total amount not to
exceed one hundred percent of the original amount improperly
withheld from escrow;
(B) In the case of a knowing violation, be required within
fifteen days to place such funds into escrow as shall bring it into
compliance with this section. The court, upon a finding of a
knowing violation of this subsection, may impose a civil penalty,
to be paid to the general fund of the state, in an amount not to
exceed fifteen percent of the amount improperly withheld from
escrow per day of the violation and in a total amount not to exceed
three hundred percent of the original amount improperly withheld
from escrow; and
(C) In the case of a second knowing violation, be prohibited
from selling cigarettes to consumers within the state (whether
directly or through a distributor, retailer or similar intermediary) for a period not to exceed two years.
Each failure to make an annual deposit required under this
section shall constitute a separate violation.
§16-9B-4. Special severability rule; implementation date.
(a) Section three severability rule. --
(1) If the act amending section three of this article in the
year two thousand three, or any portion of the amendment to
paragraph (B), subdivision (2), subsection (b), section three of
this article, made by that act, is held by a court of competent
jurisdiction to be unconstitutional, then such paragraph (B) shall
be deemed to be repealed in its entirety.
(2) If after application of subsection (a) of this section, a
court of competent jurisdiction thereafter holds subdivision (2),
subsection (b) of said section three to be unconstitutional, then
section three as amended in the year two thousand three shall be
deleted in its entirety and section three as enacted in the year
one thousand nine hundred ninety-nine, shall be restored as if no
amendments had been made to section three in the year two thousand
three. Neither any holding of unconstitutionality nor the repeal of
paragraph (B), subdivision (2), subsection (b), section three of
this article shall affect, impair or invalidate any other portion
of section three, or the application of section three to any other
person or circumstance, and such remaining portions of section
three shall at all times continue in full force and effect.
(b) Implementation date. - The amendments to section three of
this article in the year two thousand three shall not take effect until thirty days after the earlier of:
(1) All states that share a common border with this state
enacting similar amendments to their laws implementing the master
tobacco settlement agreement; or
(2) Thirty three states, including this state, enacting
similar amendments to their laws implementing the master tobacco
settlement agreement.