2013 New York Consolidated Laws
PBH - Public Health
Article 13-G - (1399-NN - 1399-PP) TOBACCO ESCROW FUNDS
1399-PP - Requirements.

 
    §  1399-pp.  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 effective date of this article shall do one of the following:
    1. 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
    2.  (a)  place  into a qualified escrow fund by April fifteenth of the
  year following the year in  question  the  following  amounts  (as  such
  amounts are adjusted for inflation):
    (i)  1999:  $.0094241  per  unit sold after the effective date of this
  section;
    (ii) 2000: $.0104712 per unit sold;
    (iii) for each of 2001 and 2002: $.0136125 per unit sold;
    (iv) for each of 2003 through 2006: $.0167539 per unit sold;
    (v) for each of 2007 and each  year  thereafter:  $.0188482  per  unit
  sold.
    (b)  a  tobacco  product  manufacturer  that  places funds into escrow
  pursuant  to  paragraph  (a)  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:
    (i) 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  subparagraph:  (A)  in the order in which they were
  placed into escrow and (B) only to the extent and at the time  necessary
  to make payments required under such judgment or settlement;
    (ii)  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
  settlement  agreement  payments, as determined pursuant to section IX(i)
  of the master settlement 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
    (iii) to the extent not released from escrow under subparagraph (i) or
  (ii) of this paragraph, funds shall be released from escrow  and  revert
  back  to  such  tobacco product manufacturer twenty-five years after the
  date on which they were placed into escrow.
    (c) Each tobacco product manufacturer that elects to place funds  into
  escrow  pursuant  to  this  subdivision  shall  annually  certify to the
  attorney general that it is in compliance  with  this  subdivision.  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 subdivision. Any tobacco product  manufacturer
  that  fails  in  any  year to place into escrow the funds required under
  this subdivision shall:
    (i) be required within fifteen days to place such funds into escrow as
  shall bring it into compliance with this subdivision. The court, upon  a
  finding  of  a violation of this subdivision, 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;
    (ii) 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 subdivision. The court, upon a finding of a knowing  violation

  of  this  subdivision,  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
    (iii) 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 subdivision
  shall   constitute   a  separate  violation,  and  the  tobacco  product
  manufacturer shall be required to pay the state's costs  and  attorney's
  fees incurred during a successful prosecution under this subdivision.