General Assembly: 79 (2002 Regular GA) - Chapter 1163 - Tobacco settlement agreement — miscellaneous provisions — litigation costs


Published: 2002-05-10

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532LAWS OF THE SEVENTY−NINTH G.A., 2002 SESSIONCH. 1162

father of a child born to a woman to whom the man is not married at the time of the birth of the child.

11.10.Register" means to file a foreign support order in the registry of foreign support or- ders maintained as a filing in equity by the clerk of court.

12.11.Respondent" includes each person against whom a proceeding is instituted pur- suant to this chapter. Respondent" may include the mother or the putative father of a depen- dent.

13.12.State registrar" means state registrar as defined in section 144.1.

Sec. 79.Chapter 135G, Code 2001, is repealed.

Approved May 10, 2002

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CH. 1163CH. 1163

CHAPTER 1163

TOBACCO SETTLEMENT AGREEMENT  MISCELLANEOUS PROVISIONS  LITIGATION COSTS

S.F. 2317

AN ACT relating to the tobacco master settlement agreement, including tobacco product man- ufacturer compliance, making an appropriation, and providing penalties.

Be It Enacted by the General Assembly of the State of Iowa:

*Section 1.Section 453A.22, subsection 1, Code 2001, is amended to read as follows: 1.If a person holding a permit issued by the department under this division, including a re-

tailer permit for railway car, has willfully violated section 453A.2 or 453A.58, the department shall revoke the permit upon notice and hearing. If the person violates any other provision of this division, or a rule adopted under this division, or is substantially delinquent in the payment of a tax administered by the department or the interest or penalty on the tax, or if the person is a corporation and if any officer having a substantial legal or equitable interest in the owner- ship of the corporation owes any delinquent tax of the permit-holding corporation, or interest or penalty on the tax, administered by the department, the department may revoke the permit issued to the person, after giving the permit holder an opportunity to be heard upon ten days’ written notice stating the reason for the contemplated revocation and the time and place at which the person may appear and be heard. The hearing before the department may be held at a site in the state as the department may direct. The notice shall be given by mailing a copy to the permit holder’s place of business as it appears on the application for a permit. If, upon hearing, the department finds that the violation has occurred, the department may revoke the permit.*

*Sec. 2.Section 453A.44, subsection 10, Code 2001, is amended to read as follows: 10.The director may revoke, cancel, or suspend the license or licenses of any distributor or

subjobber for violation of any of the provisions of this division, for violation of section 453A.58, or for violation of any other act applicable to the sale of tobacco products, or any rule or regula- tions promulgated by the director in furtherance of this division. No license shall be revoked,

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*Item veto; see message at end of the Act

533 LAWS OF THE SEVENTY−NINTH G.A., 2002 SESSION CH. 1163

canceled, or suspended except after notice and a hearing by the director as provided in section 453A.48.*

DIVISION IV MANUFACTURERS’ COMPLIANCE

*Sec. 3.NEW SECTION.453A.57DEFINITIONS.

For the purposes of this division, unless the context otherwise requires:

1.Cigarette" means the same as defined in section 453C.1.

2.Distributor" means the same as defined in sections 453A.1 and 453A.42.

2A.Master settlement agreement" means the same as defined in section 453C.1.

3.Tobacco product manufacturer" means the same as defined in section 453C.1.*

*Sec. 4. NEW SECTION. 453A.58DISTRIBUTORS  DETERMINATION OF TOBACCO PRODUCT MANUFACTURER COMPLIANCE.

1.A distributor shall not affix stamps or cause stamps to be affixed to individual packages of any brand of cigarettes sold or distributed by the distributor in this state and shall not act as a distributor for any roll-your-own-tobacco unless either of the following conditions applies:

a.The tobacco product manufacturer of the brand, or any predecessor tobacco product man- ufacturer of the brand, is a participating manufacturer in compliance with section 453C.2, sub- section 1.

b.The tobacco product manufacturer of the brand, or any predecessor tobacco product man- ufacturer of the brand, has provided the distributor with a current certification that such tobac- co product manufacturer and all predecessor tobacco product manufacturers of the brand are in full compliance with section 453C.2, subsection 2.

2.A distributor shall not affix stamps or cause stamps to be affixed to individual packages of any brand of cigarettes, subsequent to notice to the distributor by the department of revenue and finance that the tobacco product manufacturer is in violation of chapter 453C with refer- ence to that brand.*

*Sec. 5. NEW SECTION. 453A.59TOBACCO PRODUCT MANUFACTURER CERTIFI- CATION.

1.A tobacco product manufacturer whose cigarettes are sold for consumption in this state shall quarterly certify, under penalty of perjury, that as of the date of certification, the tobacco product manufacturer and any predecessor of the tobacco product manufacturer are either of the following:

a.A participating manufacturer pursuant to section 453C.2, subsection 1. b.In full compliance with section 453C.2, subsection 2. 2.A certification under subsection 1 shall also state, under penalty of perjury, that the tobac-

co product manufacturer is in compliance with section 453A.62, and shall be accompanied by a list of cigarette brands sold by the tobacco product manufacturer in this state.

3.If certification is made pursuant to subsection 1, paragraph b", the certification shall also state, under penalty of perjury, that the per unit price to the distributor includes an amount equal to the amount required to be placed into escrow under section 453C.2, subsection 2.

4.A copy of the certification shall be delivered to the director, the attorney general, and any distributor of the tobacco product manufacturer. A distributor shall retain a copy of the certifi- cate for two years from the date of receipt.

5.The director shall prescribe the form of the certificate required and the specific dates on which the certificate must be filed.*

*Sec. 6.NEW SECTION.453A.60CIVIL PENALTIES. A distributor that violates this division is subject to the civil penalties specified in section

453A.31, subsection 2.*

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*Item veto; see message at end of the Act

534LAWS OF THE SEVENTY−NINTH G.A., 2002 SESSIONCH. 1163

*Sec. 7.NEW SECTION.453A.61INFORMATION EXCHANGE. For the purposes of enforcement of chapter 453C and this division, the department and the

attorney general may share all information collected under chapter 453C and this division with each other, with the national association of attorneys general, and with agencies of other states responsible for enforcement of cigarette and tobacco laws.*

*Sec. 8.NEW SECTION.453A.62REGISTERED AGENT. 1.A tobacco product manufacturer whose cigarettes are sold for consumption in this state

shall, prior to any such sale, maintain in this state both a registered office and a registered agent that meet the criteria prescribed in section 490.501.

2.A registered agent is the tobacco product manufacturer’s agent for service of process, no- tice, or demand required or permitted by law to be served on the tobacco product manufacturer.

3.If a tobacco product manufacturer does not have a registered agent, or the agent cannot be served with reasonable diligence, the tobacco product manufacturer may be served by any means provided in section 490.504.

4.Registration and changes of a registered office or registered agent or resignation of a regis- tered agent shall be filed with the department in accordance with rules adopted by the depart- ment.*

Sec. 9.TOBACCO SETTLEMENT FUND  APPROPRIATION  LITIGATION COSTS. There is appropriated from the tax-exempt bond proceeds restricted capital funds account of the tobacco settlement trust fund established in section 12E.12, to the treasurer of state for the fiscal year beginning July 1, 2001, and ending June 30, 2002, the following amount, or so much thereof as is necessary, to supplement the appropriation made in 2001 Iowa Acts, chapter 176, section 25, to be used for the purpose designated:

For payment of litigation fees incurred pursuant to the tobacco master settlement agree- ment:

$ 944,880. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sec. 10.EFFECTIVE DATE.Section 9 of this Act relating to an appropriation from the tax- exempt bond proceeds restricted capital funds account of the tobacco settlement trust fund for payment of litigation fees, being deemed of immediate importance, takes effect upon en- actment.

Approved May 10, 2002, with exceptions noted

THOMAS J. VILSACK, Governor

Dear Secretary Culver:

I hereby transmit Senate File 2317, an Act relating to the tobacco master settlement agree- ment, including tobacco product manufacturer compliance, making an appropriation, and providing penalties. This legislation provides additional remedies to aid in the enforcement of the Model Statute, Code chapter 453C which was required to be approved and enforced by the State in the Master Settlement Agreement with the Tobacco manufacturers.

Sections 1 – 8 of this bill would require compliance with chapter 453C before a distributor could affix stamps to the product. Additionally, a registered agent would be required for ser- vice of process of those out of state manufacturers selling in this state. Iowa is required to dili- gently enforce" chapter 453C and penalties for failure to are monetary and substantial. The

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*Item veto; see message at end of the Act

535 LAWS OF THE SEVENTY−NINTH G.A., 2002 SESSION CH. 1164

possibility exists that the entire amount owed to Iowa for any particular year could be elimi- nated if the statute is not diligently enforced.

Section 9 is the balance owed the private counsel retained to represent Iowa in its litigation against the Tobacco manufacturers. The original appropriation contained in House File 755, section 25, of last year’s appropriation was $944, 877.60 short of the obligation owed to the at- torneys by contract. The shortage was created when estimates paid by Tobacco manufactur- ers over the last three years did not meet actual obligation. When the contractual obligation to the attorneys is concluded, the balance of the payments will be assigned to the State.

In its present form there is some question as to whether Sections 1 – 8 would jeopardize Iowa having a qualified model statute within the meaning of the Master Settlement Agreement. That in itself would result in substantial monetary penalties for the State.

Senate File 2317 is, therefore, signed on this date with the following exceptions, which I hereby disapprove.

I am unable to approve Sections 1 – 8 given the potential to put Iowa in non−compliance with the Master Settlement Agreement. I look forward to working with lawmakers to approve legis- lation that would ensure compliance with the Master Settlement Agreement and not jeopar- dize these funds.

For the above reasons, I respectfully disapprove these items in accordance with Amendment IV of the Amendments of 1968 to the Constitution of the State of Iowa. All other items in Senate File 2317 are hereby approved as of this date.

Sincerely, THOMAS J. VILSACK, Governor

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CH. 1164CH. 1164

CHAPTER 1164

INTERSTATE PRESCRIPTION DRUG PURCHASING COOPERATIVE

H.F. 2192

AN ACT relating to the establishment of a task force to develop an interstate prescription drug purchasing cooperative.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1.INTERSTATE PRESCRIPTION DRUG PURCHASING COOPERATIVE  TASK FORCE  REPORT.

1.The Iowa department of public health shall convene a task force to determine the feasibil- ity of establishing an interstate prescription drug purchasing cooperative with other midwest- ern states.

2.The task force shall consist of all of the following voting members: a.The director of public health, or the director’s designee. b.The director of human services, or the director’s designee. c.The director of the department of elder affairs, or the director’s designee.