093_HB3518eng

 
HB3518 Engrossed                     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 and by adding Section 20 as
 6    follows:

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

23        (30 ILCS 168/20 new)
24        Sec. 20.  If this amendatory  Act  of  the  93rd  General
25    Assembly  or  any  portion  of  the  amendment to subdivision
26    (2)(B)(ii) of subsection (a)  of  Section  15  made  by  this
27    amendatory  Act  of  the  93rd  General Assembly is held by a
28    court of competent jurisdiction to be unconstitutional,  then
29    such  subdivision  (2)(B)(ii) of subsection (a) of Section 15
30    shall  be  deemed  to  be  repealed  in  its  entirety.    If
31    subdivision  (2)(B)(ii) of subsection (a) of Section 15 shall
32    thereafter be held by a court of competent jurisdiction to be
33    unconstitutional,  then  this  amendatory  Act  of  the  93rd
 
HB3518 Engrossed            -5-      LRB093 10971 LCB 11570 b
 1    General Assembly shall be  deemed  repealed  and  subdivision
 2    (2)(B)(ii)  of subsection (a) of Section 15 shall be restored
 3    as if no such amendments had been made.  Neither any  holding
 4    of   unconstitutionality   nor   the  repeal  of  subdivision
 5    (2)(B)(ii) of subsection (a)  of  Section  15  shall  affect,
 6    impair,  or invalidate any other portion of Section 15 or the
 7    application  of  such  Section  to  any   other   person   or
 8    circumstance, and such remaining portions of Section 15 shall
 9    at all times continue in full force and effect.