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IC 24-3-5.4
Chapter 5.4. Master Settlement Agreement Protection Act
IC 24-3-5.4-1
"Brand family"
Sec. 1. As used in this chapter, "brand family" means cigarettes
that are:
(1) sold under the same trademark; and
(2) differentiated from one another by means of modifiers such
as menthol, lights, kings, or 100s.
The term includes the use of a brand name, trademark, logo, symbol,
motto, selling message, recognizable pattern of colors, or other
indicia of product identification that is identical or similar to or
identifiable with a previously known brand of cigarettes.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-2
"Cigarette"
Sec. 2. As used in this chapter, "cigarette" has the meaning set
forth in IC 24-3-3-5.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-3
"Commission"
Sec. 3. As used in this chapter, "commission" means the alcohol
and tobacco commission created by IC 7.1-2-1-1.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-4
"Department"
Sec. 4. As used in this chapter, "department" means the
department of state revenue.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-5
"Distributor"
Sec. 5. As used in this chapter, "distributor" means a person that:
(1) purchases cigarettes on which the tax under IC 6-7-1 is not
paid; and
(2) stores, sells, or otherwise disposes of the cigarettes.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-5.5
"Importer"
Sec. 5.5. As used in this chapter, "importer" means a person that
imports, other than for personal consumption, one (1) or more brand
families of a nonparticipating manufacturer.
As added by P.L.24-2010, SEC.1.
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IC 24-3-5.4-6
"Master settlement agreement"
Sec. 6. As used in this chapter, "master settlement agreement" has
the meaning set forth in IC 24-3-3-6.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-6.5
"Newly qualified nonparticipating manufacturer"
Sec. 6.5. As used in this chapter, "newly qualified
nonparticipating manufacturer" means a nonparticipating
manufacturer:
(1) that has filed a certification under section 13 of this chapter;
and
(2) whose brand families are not listed in a directory under
section 14 of this chapter.
As added by P.L.24-2010, SEC.2.
IC 24-3-5.4-7
"Nonparticipating manufacturer"
Sec. 7. As used in this chapter, "nonparticipating manufacturer"
means a tobacco product manufacturer that is not a participating
manufacturer.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-8
"Participating manufacturer"
Sec. 8. As used in this chapter, "participating manufacturer" has
the meaning set forth in IC 24-3-3-12(1).
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-9
"Qualified escrow fund"
Sec. 9. As used in this chapter, "qualified escrow fund" has the
meaning set forth in IC 24-3-3-7.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-10
"Stamping agent"
Sec. 10. As used in this chapter, "stamping agent" means a person
that may affix a stamp to a package of cigarettes under IC 6-7-1-15.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-11
"Tobacco product manufacturer"
Sec. 11. As used in this chapter, "tobacco product manufacturer"
has the meaning set forth in IC 24-3-3-10.
As added by P.L.252-2003, SEC.16.
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IC 24-3-5.4-12
"Units sold"
Sec. 12. As used in this chapter, "units sold" has the meaning set
forth in IC 24-3-3-11.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-13
Tobacco product manufacturer certification; brand family list;
maintenance of sales documentation by nonparticipating
manufacturer
Sec. 13. (a) Not later than April 30 of each year, a tobacco
product manufacturer whose cigarettes are sold in Indiana, whether
directly or through a distributor, retailer, or similar intermediary,
shall certify to the department and the attorney general that, as of the
date of the certification, the tobacco product manufacturer is:
(1) a participating manufacturer; or
(2) in full compliance with IC 24-3-3.
The department shall prescribe the form of the certification.
(b) A participating manufacturer shall include in a certification
under subsection (a) a list of the participating manufacturer's brand
families. The participating manufacturer shall update the list by filing
a supplemental certification with the department and the attorney
general not less than thirty (30) days before the participating
manufacturer adds a brand family or otherwise modifies the list of
brand families.
(c) A nonparticipating manufacturer shall include in a certification
under subsection (a) a list of the nonparticipating manufacturer's
brand families, including the following:
(1) A separate listing of each brand family that was sold in
Indiana during the calendar year before the year in which the
certification is filed.
(2) A separate listing of the number of units sold for each brand
family that was sold in Indiana during the calendar year before
the year in which the certification is filed.
(3) An indication of any brand family that was sold in Indiana
during the calendar year before the year in which the
certification is filed and that is not sold in Indiana as of the date
of the certification.
(4) The name and address of any other manufacturer of a brand
family that was sold in Indiana during the calendar year before
the year in which the certification is filed.
(d) A nonparticipating manufacturer shall file a supplemental
certification with the attorney general not less than thirty (30) days
before the nonparticipating manufacturer adds to or otherwise
modifies its list of brand families.
(e) A nonparticipating manufacturer shall certify the following in
a certification under subsection (a):
(1) The nonparticipating manufacturer:
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(A) is registered to do business in Indiana; or
(B) has appointed an agent for service of process and
provided notice under section 16 of this chapter.
(2) The nonparticipating manufacturer has:
(A) established and continues to maintain a qualified escrow
fund; and
(B) executed a qualified escrow agreement that:
(i) the attorney general has approved; and
(ii) governs the qualified escrow fund.
(3) The nonparticipating manufacturer is in full compliance
with:
(A) this section;
(B) section 13.5 of this chapter, if applicable;
(C) section 13.6 of this chapter, if applicable; and
(D) IC 24-3-3.
(4) The name, address, and telephone number of the financial
institution that holds the nonparticipating manufacturer's
qualified escrow fund.
(5) The account number and any subaccount numbers of the
nonparticipating manufacturer's qualified escrow fund.
(6) The amounts and dates of deposits that the nonparticipating
manufacturer placed in the qualified escrow fund for cigarettes
sold in Indiana during the calendar year before the year in
which the certification is filed, including any verification
required by the attorney general.
(7) The amounts and dates of withdrawals or transfers of funds
that the nonparticipating manufacturer made from a qualified
escrow fund into which the nonparticipating manufacturer made
or makes escrow payments under IC 24-3-3.
(f) A tobacco product manufacturer shall not include a brand
family in the tobacco product manufacturer's certification under
subsection (a) unless:
(1) in the case of a participating manufacturer, the participating
manufacturer affirms that the brand family is considered the
participating manufacturer's cigarettes for purposes of
calculating the participating manufacturer's payments under the
master settlement agreement for the year in which the
certification is filed in the volume and shares determined under
the master settlement agreement; or
(2) in the case of a nonparticipating manufacturer, the
nonparticipating manufacturer affirms that the brand family is
considered to be the nonparticipating manufacturer's cigarettes
for purposes of IC 24-3-3-12(2).
(g) This section does not limit or otherwise affect the state's right
to maintain that a brand family constitutes cigarettes of a different
tobacco product manufacturer for purposes of calculating payments
under the master settlement agreement or for purposes of IC 24-3-3.
(h) A nonparticipating manufacturer shall maintain all invoices
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and documentation of sales and any other relevant information for a
period of five (5) years unless otherwise required by law to maintain
the invoices, documentation of sales, or other relevant information
for more than five (5) years.
As added by P.L.252-2003, SEC.16. Amended by P.L.24-2010,
SEC.3.
IC 24-3-5.4-13.5
Importers required to provide information to the attorney general
Sec. 13.5. (a) This section applies to a nonparticipating
manufacturer whose principal place of business is located outside the
United States.
(b) Each year, a nonparticipating manufacturer shall provide to
the attorney general a declaration from each of the nonparticipating
manufacturer's importers that does the following:
(1) States that the importer assumes joint and several liability
with the nonparticipating manufacturer for the following
payments, penalties, costs, and fees with respect to the
importer:
(A) Any escrow payments required under IC 24-3-3-12(2)
for deposit in a qualified escrow fund.
(B) Any penalties assessed against the nonparticipating
manufacturer under IC 24-3-3 or this chapter.
(C) Payment of all costs and fees recovered by the state
against the nonparticipating manufacturer under section 28
of this chapter.
(2) Appoints a registered agent for service of process for the
importer and provides notice in accordance with section 16 of
this chapter.
The attorney general shall prescribe the form of a declaration under
this subsection, including dates for filing the declaration.
As added by P.L.24-2010, SEC.4.
IC 24-3-5.4-13.6
Bonds required for certain newly qualified and certain
nonparticipating manufacturers
Sec. 13.6. (a) The attorney general may determine that a
nonparticipating manufacturer, including a newly qualified
nonparticipating manufacturer, poses an elevated risk for
noncompliance with this article if any of the following apply:
(1) The nonparticipating manufacturer or an affiliate of a
nonparticipating manufacturer has failed to make required
payments into a qualified escrow fund in any state during the
three (3) calendar years immediately preceding the date of the
determination unless:
(A) the nonparticipating manufacturer or affiliate:
(i) did not knowingly or recklessly fail to make the
required payments; and
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(ii) makes the required payment not more than one
hundred eighty (180) days after receiving notice of the
missed or insufficient payment; or
(B) the failure to make the required payment is:
(i) the subject of a good faith dispute that is documented
to the satisfaction of the attorney general; and
(ii) cured not more than one hundred eighty (180) days
after entry of a final order that resolves the good faith
dispute and establishes the amount of the required escrow
payment.
(2) A state has removed the nonparticipating manufacturer, an
affiliate of the nonparticipating manufacturer, or a brand family
of the nonparticipating manufacturer or an affiliate of the
nonparticipating manufacturer from the state's tobacco directory
for noncompliance with state law during the three (3) calendar
years immediately preceding the date of the determination.
(3) A state has:
(A) litigation pending; or
(B) an unsatisfied judgment;
against the nonparticipating manufacturer or an affiliate of the
nonparticipating manufacturer for escrow payments or
penalties, costs, or fees related to the nonparticipating
manufacturer or affiliate's noncompliance with the state's
escrow laws.
(b) The attorney general shall require:
(1) a newly qualified nonparticipating manufacturer; or
(2) a nonparticipating manufacturer that:
(A) has filed a certification under section 13 of this chapter;
and
(B) poses an elevated risk for noncompliance, as determined
by the attorney general under subsection (a);
to post a bond as described in subsection (c).
(c) A bond required under subsection (b) must be:
(1) posted by corporate surety located within the United States;
(2) in an amount equal to the greater of:
(A) fifty thousand dollars ($50,000); or
(B) the amount that the nonparticipating manufacturer is
required to place into a qualified escrow fund under
IC 24-3-3-12(2) for the calendar year in which the bond is
posted;
(3) written in favor of the state of Indiana; and
(4) for a nonparticipating manufacturer, conditioned on the
performance of the nonparticipating manufacturer, or an
importer that assumes joint and several liability with the
nonparticipating manufacturer under section 13.5 of this
chapter, of all of obligations and duties of the nonparticipating
manufacturer under this article during the calendar year in
which the bond is posted and the immediately succeeding
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calendar year.
(d) If the attorney general determines under subsection (a) that a
newly qualified nonparticipating manufacturer poses an elevated risk
of noncompliance, the attorney general may require the newly
qualified nonparticipating manufacturer to post a bond under
subsection (c) for at least the first three (3) years during which the
newly qualified nonparticipating manufacturers brand families are
listed in a directory under section 14 of this chapter.
As added by P.L.24-2010, SEC.5.
IC 24-3-5.4-14
Brand family directory; refunds
Sec. 14. (a) Not later than July 1 of each year, the attorney general
shall make available to the public by publishing on accessIndiana (as
operated under IC 4-13.1-2) a directory listing all brand families
listed in certifications filed under section 13 of this chapter.
(b) A directory described in subsection (a) shall not include the
name or brand families of a nonparticipating manufacturer:
(1) that fails to comply with section 13 of this chapter;
(2) whose certification fails to comply with section 13(c) or
13(e) of this chapter, unless the attorney general determines that
the failure has been remedied; or
(3) that:
(A) has filed a certification under section 13 of this chapter;
and
(B) poses an elevated risk for noncompliance, as determined
by the attorney general under section 13.6(a) of this chapter;
unless the nonparticipating manufacturer, or an importer that
assumes joint and several liability with the nonparticipating
manufacturer under section 13.5 of this chapter, posts a bond
under section 13.6 of this chapter.
(c) The directory may not include a tobacco product manufacturer
or a brand family if the attorney general concludes that:
(1) in the case of a nonparticipating manufacturer, all escrow
payments required under IC 24-3-3-12 for any period for any
brand family, whether or not listed by the nonparticipating
manufacturer, have not been fully paid into a qualified escrow
fund governed by a qualified escrow agreement that has been
approved by the attorney general; or
(2) all outstanding final judgments, including interest on the
judgments, for violations of IC 24-3-3 have not been fully
satisfied for the tobacco product manufacturer or brand family.
(d) The directory may not include a newly qualified
nonparticipating manufacturer unless the newly qualified
nonparticipating manufacturer posts a bond under section 13.6 of this
chapter.
(e) The attorney general shall update the directory as necessary to
correct mistakes or to add or remove a tobacco product manufacturer
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or brand family to keep the directory in conformity with the
requirements of this chapter.
(f) The attorney general shall post in the directory and transmit by
electronic mail or other means to each distributor or stamping agent
notice of any removal from the directory of a tobacco product
manufacturer or brand family not later than thirty (30) days before
the attorney general removes the tobacco product manufacturer or
brand family from the directory.
(g) Unless otherwise provided in an agreement between a tobacco
product manufacturer and a distributor or stamping agent, a
distributor or stamping agent is entitled to a refund from a tobacco
product manufacturer for any money paid by the distributor or
stamping agent to the tobacco product manufacturer for any
cigarettes of the tobacco product manufacturer or brand family that:
(1) are in the possession of the distributor or stamping agent on;
or
(2) the distributor or stamping agent receives from a retailer
after;
the date on which the tobacco product manufacturer or brand family
is removed from the directory.
(h) Unless otherwise provided in an agreement between a retailer
and a distributor, stamping agent, or tobacco product manufacturer,
a retailer is entitled to a refund from a distributor, stamping agent, or
tobacco product manufacturer for any money paid by the retailer to
the distributor, stamping agent, or tobacco product manufacturer for
any cigarettes of the tobacco product manufacturer or brand family
that are in the possession of the retailer on the date on which the
tobacco product manufacturer or brand family is removed from the
directory.
(i) The attorney general shall not restore a tobacco product
manufacturer or brand family to the directory until the tobacco
product manufacturer pays a distributor, stamping agent, or retailer
any refund due under subsection (g) or (h).
(j) A distributor or stamping agent shall provide and update as
necessary an electronic mail address to the attorney general for
purposes of receiving a notification required by this chapter.
As added by P.L.252-2003, SEC.16. Amended by P.L.177-2005,
SEC.44; P.L.24-2010, SEC.6.
IC 24-3-5.4-15
Stamping, sale, or importation of unlisted cigarettes prohibited
Sec. 15. A person may not:
(1) affix a stamp to a package or other container of cigarettes;
or
(2) sell, offer or possess for sale, or import for personal
consumption in Indiana cigarettes;
of a tobacco product manufacturer or brand family that is not listed
in a directory under section 14 of this chapter.
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As added by P.L.252-2003, SEC.16. Amended by P.L.160-2005,
SEC.13.
IC 24-3-5.4-16
Appointment of agent by foreign nonparticipating manufacturer;
termination of agency
Sec. 16. (a) A foreign nonparticipating manufacturer that has not
registered to do business in Indiana shall, as a condition precedent to
having the foreign nonparticipating manufacturer's brand families
listed in a directory under section 14 of this chapter, appoint and
engage without interruption the services of an agent in Indiana to act
as the foreign nonparticipating manufacturer's agent for the service
of process. Service on an agent under this section constitutes legal
and valid service of process on the foreign nonparticipating
manufacturer that appointed and engaged the services of the agent.
The foreign nonparticipating manufacturer shall provide the
following information to the department and the attorney general:
(1) The name, address, and telephone number of the agent.
(2) Proof of the appointment of the agent.
(3) The availability of the agent.
(4) Any other information required by the department or the
attorney general.
(b) A foreign nonparticipating manufacturer shall provide notice
to the department and the attorney general not less than thirty (30)
days before the foreign nonparticipating manufacturer terminates the
authority of an agent appointed under this section. The foreign
nonparticipating manufacturer shall provide proof to the satisfaction
of the attorney general of the appointment of a new agent not less
than five (5) days before the foreign nonparticipating manufacturer
terminates an existing agency appointment.
(c) If an agent terminates an agency appointment, the foreign
nonparticipating manufacturer shall:
(1) notify the department and the attorney general of the
termination not more than five (5) days after the termination;
and
(2) provide proof to the satisfaction of the attorney general of
the appointment of a new agent.
(d) A foreign nonparticipating manufacturer that:
(1) sells products in Indiana; and
(2) has not appointed an agent under this section;
is considered to have appointed the secretary of state as the foreign
nonparticipating manufacturer's agent. The appointment of the
secretary of state under this subsection as the foreign
nonparticipating manufacturer's agent does not satisfy the condition
precedent to having the foreign nonparticipating manufacturer's
brand families listed in a directory under section 14 of this chapter.
As added by P.L.252-2003, SEC.16.
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IC 24-3-5.4-17
Distributor or stamping agent required to send information to
department, commission, and attorney general
Sec. 17. (a) This section applies after July 31, 2003.
(b) Not later than January 20, April 20, July 20, and October 20
of a calendar year, or more frequently if ordered by the department,
the commission, or the attorney general, a distributor or stamping
agent shall submit the following information to the department, the
commission, and the attorney general:
(1) A list by brand family of the total number of cigarettes for
which the distributor or stamping agent affixed stamps or
otherwise paid taxes during the immediately preceding three (3)
months.
(2) Any other information required by the department or the
attorney general.
The distributor or stamping agent shall maintain and make available
to the department, the commission, and the attorney general for a
period of five (5) years all invoices and documentation of sales of all
nonparticipating manufacturer cigarettes and any other information
that the distributor or stamping agent relied on in reporting to the
department, the commission, and the attorney general.
(c) The attorney general may require a distributor or a tobacco
product manufacturer to submit additional information to determine
whether a tobacco product manufacturer is in compliance with this
chapter. The additional information may include samples of the
packaging or labeling of each of the tobacco product manufacturer's
brand families.
As added by P.L.252-2003, SEC.16. Amended by P.L.160-2005,
SEC.14.
IC 24-3-5.4-18
Disclosure of information received
Sec. 18. (a) The department and the commission shall disclose to
the attorney general any information received under this chapter and
requested by the attorney general for purposes of determining
compliance with and enforcing this chapter. The department, the
commission, and the attorney general:
(1) shall share with each other the information received under
this chapter; and
(2) may share the information received under this chapter with
other federal, state, or local agencies only for purposes of
enforcing this chapter or a corresponding law in another state.
(b) Notwithstanding any other law:
(1) the department, the commission, or the attorney general may
provide information received under section 17 of this chapter to
a court, an arbitrator, or a data clearinghouse or similar entity:
(A) for the purposes of making calculations required by the
master settlement agreement and related settlement
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agreements; and
(B) with counsel for the parties;
upon the execution of a protective order approved by the
attorney general; and
(2) any tobacco sales data provided from an outside party and
received under the master settlement agreement must be treated
as confidential under IC 5-14-3-4(a)(4) and IC 5-14-3-4(a)(5).
As added by P.L.252-2003, SEC.16. Amended by P.L.231-2015,
SEC.12.
IC 24-3-5.4-19
Proof of qualified escrow fund by nonparticipating manufacturer
Sec. 19. The attorney general may require a nonparticipating
manufacturer to provide from the financial institution that holds the
nonparticipating manufacturer's qualified escrow fund for purposes
of complying with this chapter proof of:
(1) the amount of money in the qualified escrow fund being
held on behalf of the state;
(2) the dates of any deposits into the qualified escrow fund; and
(3) the dates and amounts of any withdrawals from the qualified
escrow fund.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-20
Rules
Sec. 20. The department or the attorney general may adopt rules
under IC 4-22-2 to implement this chapter, including rules to:
(1) require a tobacco product manufacturer subject to section
13(c) of this chapter to make required escrow deposits in
installments during the calendar year in which the sales covered
by the deposits are made; or
(2) produce information sufficient to enable the attorney general
to determine the adequacy of the amount of an installment
deposit described in subdivision (1).
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-21
Revocation of suspension of distributor's license; penalty
Sec. 21. (a) This section applies in addition to or instead of any
other civil or criminal penalty.
(b) The department may revoke or suspend the license of a
distributor, a stamping agent, or any other person that violates
section 15 of this chapter.
(c) Each:
(1) stamp affixed;
(2) sale of cigarettes; or
(3) offer or possession of cigarettes for sale;
in violation of section 15 of this chapter constitutes a separate
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violation.
(d) The department or the commission may impose a civil penalty
that does not exceed the greater of:
(1) five hundred percent (500%) of the retail value of the
cigarettes sold; or
(2) five thousand dollars ($5,000);
for each violation of section 15 of this chapter.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-22
Seizure and forfeiture of unlisted cigarettes
Sec. 22. Whenever the department or the commission discovers
any cigarettes that have been sold, offered for sale, or possessed for
sale in Indiana in violation of section 15 of this chapter, the
department or the commission may seize and take possession of the
cigarettes. The seized cigarettes shall be forfeited to the state. The
department or the commission shall destroy the seized cigarettes.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-23
Injunction
Sec. 23. The attorney general may seek an injunction to:
(1) restrain a threatened or an actual violation of section 15 of
this chapter by a stamping agent; and
(2) compel the stamping agent to comply with sections 15,
17(b), and 17(c) of this chapter.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-24
Violation; Class C misdemeanor
Sec. 24. (a) A person shall not:
(1) sell or distribute; or
(2) acquire, hold, own, possess, transport, import, or cause to be
imported;
cigarettes that the person knows or should know are intended for
distribution or sale in Indiana in violation of section 15 of this
chapter.
(b) A person who violates this section commits a Class C
misdemeanor.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-25
Unfair and deceptive business practice
Sec. 25. A person who violates section 15 of this chapter engages
in an unfair and deceptive business practice.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-26
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Judicial review
Sec. 26. A determination by the attorney general to not list in or
to remove from a directory under section 14 of this chapter a brand
family or a tobacco product manufacturer is subject to review only
by the Marion County circuit court.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-27
Issuance of registration certificate
Sec. 27. The department shall not issue a registration certificate
under IC 6-7-1-16(a) to a distributor unless the distributor certifies
in writing that the distributor will comply with this chapter.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-28
Recovery of costs
Sec. 28. In an action brought by the state to enforce this chapter,
the state may recover:
(1) the costs of investigation;
(2) expert witness fees;
(3) the costs of the action; and
(4) attorney's fees.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-29
Disgorged profits
Sec. 29. If a court determines that a person has violated this
chapter, the court shall order any profits, gain, gross receipts, or
other benefit from the violation to be disgorged and paid to the
treasurer of state for deposit in the Indiana tobacco master settlement
agreement fund under IC 4-12-1-14.3.
As added by P.L.252-2003, SEC.16.
IC 24-3-5.4-30
Penalties deposited in enforcement and administration fund
Sec. 30. All:
(1) civil penalties imposed under; and
(2) judgments for violations of;
this chapter shall be deposited in the enforcement and administration
fund established under IC 7.1-4-10-1.
As added by P.L.252-2003, SEC.16.
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