[Rev. 2/10/2015 5:12:22
PM--2014R2]
CHAPTER 370A - MANUFACTURERS OF TOBACCO
PRODUCTS
NRS 370A.010 Definitions.
NRS 370A.020 “Adjusted
for inflation” defined.
NRS 370A.030 “Affiliate”
defined.
NRS 370A.040 “Allocable
share” defined.
NRS 370A.050 “Cigarette”
defined.
NRS 370A.060 “Manufacturer
of tobacco products” defined.
NRS 370A.070 “Master
Settlement Agreement” defined.
NRS 370A.080 “Participating
manufacturer” defined.
NRS 370A.090 “Qualified
escrow fund” defined.
NRS 370A.095 “Qualified
tribal land” defined.
NRS 370A.100 “Released
claims” defined.
NRS 370A.110 “Releasing
parties” defined.
NRS 370A.120 “Units
sold” defined.
NRS 370A.130 Adoption
of regulations to ascertain amount of excise tax collected from each
manufacturer.
NRS 370A.140 Participation
in Master Settlement Agreement or deposits into qualified escrow fund required.
NRS 370A.150 Deposits
into escrow: Disposition of interest; release of principal. [Effective until
the date upon which a court of competent jurisdiction enters a judgment
determining that subsection 2 of this section is unconstitutional.]
NRS 370A.150 Deposits
into escrow: Disposition of interest; release of principal. [Effective from the
date a court of competent jurisdiction enters a judgment determining that
former subsection 2 of this section is unconstitutional until the date such a
court enters a judgment determining that the repeal of former subsection 2 of
this section is unconstitutional.]
NRS 370A.150 Deposits
into escrow: Disposition of interest; release of principal. [Effective from the
date a court of competent jurisdiction enters a judgment determining that the
repeal of former subsection 2 of this section is unconstitutional.]
NRS 370A.153 Assignment
of money deposited into escrow.
NRS 370A.157 Release
of money deposited into escrow to Indian tribes.
NRS 370A.160 Compliance
by manufacturer: Annual certification; enforcement; penalties for violations.
NRS 370A.170 Provisions
void under certain circumstances.
_________
_________
NRS 370A.010 Definitions. As
used in this chapter, the words and terms defined in NRS
370A.020 to 370A.120, inclusive, have the
meanings ascribed to them in those sections.
(Added to NRS by 1999, 1106; A 2013, 2666)
NRS 370A.020 “Adjusted for inflation” defined. “Adjusted
for inflation” means increased in accordance with the formula for inflation
adjustment set forth in Exhibit C to the Master Settlement Agreement.
(Added to NRS by 1999, 1106)
NRS 370A.030 “Affiliate” defined. “Affiliate”
means a person who directly or indirectly owns or controls, is owned or
controlled by, or is under common ownership or control with, another person.
Solely for the purposes of this definition, the terms “owns,” “is owned” and
“ownership” mean ownership of an equity interest, or the equivalent thereof, of
ten percent or more, and the term “person” means an individual, partnership,
committee, association, corporation or any other organization or group of
persons.
(Added to NRS by 1999, 1106)
NRS 370A.040 “Allocable share” defined. “Allocable
share” has the meaning ascribed to it in section II(f) of the Master Settlement
Agreement.
(Added to NRS by 1999, 1106)
NRS 370A.050 “Cigarette” defined. “Cigarette”
means any product that contains nicotine, is intended to be burned or heated
under ordinary conditions of use, and consists of or contains:
1. Any roll of tobacco wrapped in paper or
in any other substance not containing tobacco;
2. Tobacco, in any form, that is
functional in the product, which because of its appearance, the type of tobacco
used in the filler, or its packaging and labeling, is likely to be offered to
or purchased by consumers as a cigarette; or
3. Any roll of tobacco wrapped in any
substance containing tobacco which, because of its appearance, the type of
tobacco used in the filler, or its packaging and labeling, is likely to be
offered to or purchased by consumers as a cigarette described in subsection 1.
Ê The term
includes “roll-your-own” tobacco, that is, any tobacco which because of its
appearance, type, packaging or labeling is suitable for use and likely to be
offered to or purchased by consumers as tobacco for making cigarettes. For the
purposes of this section, 0.09 ounces of “roll-your-own” tobacco constitutes
one individual cigarette.
(Added to NRS by 1999, 1106)
NRS 370A.060 “Manufacturer of tobacco products” defined. “Manufacturer of tobacco products” means an
entity that, after May 24, 1999, directly, and not exclusively through an
affiliate:
1. Manufactures cigarettes anywhere that
such manufacturer intends to be sold in the United States, including cigarettes
intended to be sold in the United States through an importer (except where such
importer is an original participating manufacturer, as that term is defined in
the Master Settlement Agreement, that will be responsible for the payments
under the Master Settlement Agreement with respect to such cigarettes as a
result of the provisions of subsection II(mm) of the Master Settlement
Agreement and that pays the taxes specified in subsection II(z) of the Master
Settlement Agreement, and provided that the manufacturer of such cigarettes
does not market or advertise such cigarettes in the United States);
2. Is the first purchaser anywhere for
resale in the United States of cigarettes manufactured anywhere that the
manufacturer does not intend to be sold in the United States; or
3. Becomes a successor of an entity
described in subsection 1 or 2.
Ê The term
does not include an affiliate of a manufacturer of tobacco products unless the
affiliate itself is an entity described in subsection 1, 2 or 3.
(Added to NRS by 1999, 1107)
NRS 370A.070 “Master Settlement Agreement” defined. “Master
Settlement Agreement” means the settlement agreement, and related documents,
entered into on November 23, 1998, by this state and leading United States
manufacturers of tobacco products.
(Added to NRS by 1999, 1107)
NRS 370A.080 “Participating manufacturer” defined. “Participating
manufacturer” has the meaning ascribed to it in section II(jj) of the Master
Settlement Agreement.
(Added to NRS by 1999, 1107)
NRS 370A.090 “Qualified escrow fund” defined. “Qualified
escrow fund” means an escrow arrangement with a federally or state-chartered
financial institution, that has no affiliation with any manufacturer of tobacco
products and has assets of at least $1 billion where the arrangement requires
the financial institution to hold the principal of the amount deposited in
escrow for the benefit of releasing parties and prohibits the manufacturer of
tobacco products which deposits the money from using, having access to or
directing the use of the principal of the amount deposited except as permitted
under NRS 370A.150.
(Added to NRS by 1999, 1107)
NRS 370A.095 “Qualified tribal land” defined. “Qualified
tribal land” has the meaning ascribed to it in NRS 370.0325.
(Added to NRS by 2013, 2664)
NRS 370A.100 “Released claims” defined. “Released
claims” has the meaning ascribed to it in section II(nn) of the Master
Settlement Agreement.
(Added to NRS by 1999, 1107)
NRS 370A.110 “Releasing parties” defined. “Releasing
parties” has the meaning ascribed to it in section II(pp) of the Master
Settlement Agreement.
(Added to NRS by 1999, 1107)
NRS 370A.120 “Units sold” defined. “Units
sold” means, with respect to a particular manufacturer of tobacco products for
a particular year, the number of individual cigarettes sold in this state,
including, without limitation, any cigarettes sold on any qualified tribal land
within the State, by the manufacturer directly or through a distributor,
retailer or similar intermediary or intermediaries during that year, for which
the State has the authority under federal law to impose excise or a similar tax
or to collect escrow deposits. The term does not include any cigarettes sold:
1. On a federal installation in a
transaction that is exempt from state taxation under federal law; or
2. On the qualified tribal land of an
Indian tribe to a consumer who is an adult enrolled member of that tribe in a
transaction that is exempt from state taxation under federal law.
(Added to NRS by 1999, 1107; A 2013, 2666)
NRS 370A.130 Adoption of regulations to ascertain amount of excise tax
collected from each manufacturer. The
Department of Taxation shall adopt such regulations as are necessary to
ascertain the amount of excise tax collected by the State on the cigarettes of
each manufacturer of tobacco products for each year.
(Added to NRS by 1999, 1107)
NRS 370A.140 Participation in Master Settlement Agreement or deposits into
qualified escrow fund required. A
manufacturer of tobacco products that sells cigarettes to consumers in this
state, directly or through a distributor, retailer or similar intermediary or
intermediaries, after May 24, 1999, shall do one of the following:
1. Become a participating manufacturer and
generally perform its financial obligations under the Master Settlement
Agreement; or
2. Deposit into a qualified escrow fund,
on or before April 15 of the year following the year in question, the following
amounts as such amounts are adjusted for inflation:
(a) For the year 1999, $0.0094241 for each unit
sold after May 24, 1999;
(b) For the year 2000, $0.0104712 for each unit
sold;
(c) For each of the years 2001 and 2002,
$0.0136125 for each unit sold;
(d) For each of the years 2003 through 2006,
$0.0167539 for each unit sold; and
(e) For each of the year 2007 and each year
thereafter, $0.0188482 for each unit sold.
(Added to NRS by 1999, 1108)
NRS 370A.150 Deposits into escrow: Disposition of interest; release of
principal. [Effective until the date upon which a court of competent
jurisdiction enters a judgment determining that subsection 2 of this section is
unconstitutional.] A manufacturer
of tobacco products that deposits money into escrow pursuant to subsection 2 of
NRS 370A.140 shall receive the interest or other
appreciation on the deposit as earned. The principal of the deposit may be
released from escrow only under the following circumstances:
1. To pay a judgment or settlement on a
released claim brought against that manufacturer by this State or by a
releasing party located or residing in this State. Money may be released from
escrow under this subsection only in the order in which it was deposited into
escrow and only to the extent and at the time necessary to make payments
required under the judgment or settlement.
2. To the extent that the manufacturer
establishes that the amount it was required to deposit 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 that
Agreement including after final determination of all adjustments, that such
manufacturer would have been required to make on account of such units sold if
the manufacturer had been a participating manufacturer, the excess must be
released from escrow and revert to the manufacturer.
3. In accordance with the provisions of NRS 370A.157.
4. To the extent not released from escrow
under subsection 1, 2 or 3, deposits must be released from escrow and revert to
the manufacturer 25 years after the date on which they were deposited.
(Added to NRS by 1999, 1108; A 2005, 379; 2013, 2666)
NRS 370A.150 Deposits into escrow:
Disposition of interest; release of principal. [Effective from the date a court
of competent jurisdiction enters a judgment determining that former subsection
2 of this section is unconstitutional until the date such a court enters a
judgment determining that the repeal of former subsection 2 of this section is
unconstitutional.] A manufacturer
of tobacco products that deposits money into escrow pursuant to subsection 2 of
NRS 370A.140 shall receive the interest or other
appreciation on the deposit as earned. The principal of the deposit may be
released from escrow only under the following circumstances:
1. To pay a judgment or settlement on a
released claim brought against that manufacturer by this State or by a
releasing party located or residing in this State. Money may be released from
escrow under this subsection only in the order in which it was deposited into
escrow and only to the extent and at the time necessary to make payments
required under the judgment or settlement.
2. In accordance with the provisions of NRS 370A.157.
3. To the extent not released from escrow
under subsection 1 or 2, deposits must be released from escrow and revert to
the manufacturer 25 years after the date on which they were deposited.
(Added to NRS by 1999, 1108; A 2005, 379, 380; 2013, 2666,
effective from the date a court of competent jurisdiction enters a judgment
determining that former subsection 2 of this section is unconstitutional until
the date such a court enters a judgment determining that the repeal of former
subsection 2 of this section is unconstitutional)
NRS 370A.150 Deposits into escrow:
Disposition of interest; release of principal. [Effective from the date a court
of competent jurisdiction enters a judgment determining that the repeal of
former subsection 2 of this section is unconstitutional.] A manufacturer of tobacco products that
deposits money into escrow pursuant to subsection 2 of NRS
370A.140 shall receive the interest or other appreciation on the deposit as
earned. The principal of the deposit may be released from escrow only under the
following circumstances:
1. To pay a judgment or settlement on a
released claim brought against that manufacturer by this State or by a
releasing party located or residing in this State. Money may be released from
escrow under this subsection only in the order in which it was deposited into
escrow and only to the extent and at the time necessary to make payments
required under the judgment or settlement.
2. To the extent that the manufacturer
establishes that the amount it was required to deposit into escrow in a particular
year was greater than this State’s allocable share of the total payments that
the manufacturer would have been required to make in that year under the Master
Settlement Agreement if the manufacturer had been a participating manufacturer,
as such payments are determined pursuant to section IX(i)(2) of that Agreement
and before any of the adjustments or offsets described in section IX(i)(3) of
that Agreement other than the inflation adjustment, the excess must be released
from escrow and revert to the manufacturer.
3. In accordance with the provisions of NRS 370A.157.
4. To the extent not released from escrow
under subsection 1 or 2, deposits must be released from escrow and revert to the
manufacturer 25 years after the date on which they were deposited.
(Added to NRS by 1999, 1108; A 2005, 379, 380; 2013, 2666,
effective from the date a court of competent jurisdiction enters a judgment
determining that the repeal of former subsection 2 of this section is
unconstitutional)
NRS 370A.153 Assignment of money deposited into escrow.
1. Notwithstanding the provisions of NRS 370A.150, a manufacturer that elects to deposit
money into a qualified escrow fund pursuant to NRS
370A.140 may assign to the State the interest of the manufacturer in any
money in the qualified escrow fund.
2. An assignment executed pursuant to
subsection 1 is irrevocable and applies to any money and any interest or other
appreciation earned on any money for which the manufacturer executes the
assignment.
3. The parties to a qualified escrow
agreement may amend the agreement for the purposes of executing an assignment
pursuant to subsection 1.
4. An assignment executed pursuant to
subsection 1 must be in writing and be signed by the assignee and the assignor
or by an authorized agent or representative of the assignor. An assignment in
writing which is duly executed becomes enforceable after a copy of the
assignment is delivered to the Attorney General and the financial institution
where the qualified escrow fund is maintained.
5. Nothing in this section operates to
relieve a manufacturer from any obligation or duty imposed pursuant to this
chapter or chapter 370 of NRS.
(Added to NRS by 2013, 2664)
NRS 370A.157 Release of money deposited into escrow to Indian tribes.
1. The State may release to an Indian
tribe, pursuant to a compact with that tribe, not more than 50 percent of the
amounts deposited into a qualified escrow fund pursuant to NRS 370A.140 for cigarettes sold on or after January
1, 2015, in a retail transaction to a consumer on the qualified tribal land of
the tribe, if:
(a) The tribe is a federally recognized tribe or
a tribe that was recognized by the State on or before January 1, 2012, and, in
each case, has a reservation or colony in the State;
(b) The money to be released was timely deposited
into escrow in compliance with NRS 370A.140;
(c) State excise tax or tribal excise tax was
paid on the cigarettes;
(d) The release occurs not earlier than 1 year after
the money is deposited into escrow;
(e) The money released is provided to the tribe
itself and used only for the purpose of public safety on the qualified tribal
land of the tribe or for social services for tribal members, including, without
limitation, health care or education, and not used for any function that could
directly or indirectly promote or reduce the costs of cigarette production,
marketing or sales;
(f) The money released is not used in any way for
the benefit of any manufacturer of tobacco products that is not a participating
manufacturer under the Master Settlement Agreement or to facilitate cigarette
sales by any such manufacturer of tobacco products; and
(g) The compact with the tribe provides that the
taxing and stamping requirements and policies for cigarettes sold on the
qualified tribal land of the tribe, including the applicability, amount,
collection and refund of taxes, will not be different for any cigarettes of
participating manufacturers than for any cigarettes of manufacturers of tobacco
products that are not participating manufacturers, and the tribe is in
compliance with these provisions of the compact.
2. The total amount released to all Indian
tribes from escrow pursuant to this section in any 1 year must not exceed $1
million in the aggregate.
3. This section applies only to:
(a) The cigarettes of a manufacturer of tobacco
products that existed in the United States market on or before June 1, 2012;
and
(b) A manufacturer of tobacco products involved
in the production, distribution or sale of the cigarettes for which money would
be released that is not a manufacturer, or an affiliate or successor of such
manufacturer, affiliated with the Indian tribe or any member of the tribe to
which the money would be released.
4. For the purposes of this section, an
Indian tribe with qualified tribal land located in more than one state or
territory of the United States is considered to have a reservation or colony
in, and to be eligible for the release of money pursuant to this section from,
this State only if the largest portion of the qualified tribal land of the
tribe is located within this State.
5. The Attorney General may withdraw from
a qualified escrow fund the money released pursuant to this section. The
manufacturers of tobacco products that elect to deposit money into a qualified
escrow fund pursuant to NRS 370A.140 and the
financial institutions in which such qualified escrow funds are maintained shall
make such amendments to their qualified escrow agreements as may be necessary
to effectuate a withdrawal of money from the qualified escrow funds pursuant to
this section.
6. Notwithstanding the provisions of NRS 370A.150, a manufacturer of tobacco products does
not have any right to reversion of the money, including, without limitation,
the interest or other appreciation earned on the money, released from escrow
pursuant to this section.
7. If a court of competent jurisdiction
invalidates the provisions of subsection 5, the money authorized to be released
to Indian tribes pursuant to this section may be paid to the appropriate tribes
out of the State General Fund, subject to all conditions and limits provided in
this section.
8. The Attorney General is authorized to
enter into compacts on behalf of the State as provided in this section. Any
compact so entered into must require the Indian tribe to verify that the
conditions set forth in paragraphs (e), (f) and (g) of subsection 1 are met.
(Added to NRS by 2013, 2664)
NRS 370A.160 Compliance by manufacturer: Annual certification; enforcement;
penalties for violations.
1. A manufacturer of tobacco products that
elects to deposit money into escrow pursuant to subsection 2 of NRS 370A.140 shall annually certify to the Attorney
General that it is in compliance with that subsection and with NRS 370A.150. If the Attorney General does not
receive the annual certification, he or she shall mail a notice to the
manufacturer. The Attorney General may maintain a civil action on behalf of
this state against any manufacturer of tobacco products which fails to deposit
into escrow the amount required by NRS 370A.140.
2. A manufacturer of tobacco products that
fails in any year to place into escrow the money required under NRS 370A.140 shall:
(a) Be required within 15 days to place such
money into escrow as shall bring it into compliance with NRS 370A.140. The court, upon a finding of a
violation of subsection 2 of NRS 370A.140 or NRS 370A.150, may impose a civil penalty to be paid
to the State General Fund in an amount not to exceed 5 percent of the amount
improperly withheld from escrow per day of the violation and in a total amount
not to exceed 100 percent of the original amount improperly withheld from
escrow.
(b) In the case of a knowing violation, be
required within 15 days to place such money into escrow as shall bring it into
compliance with this section. The court, upon a finding of a knowing violation
of subsection 2 of NRS 370A.140 or NRS 370A.150, may impose a civil penalty to be paid
to the State General Fund in an amount not to exceed 15 percent of the amount
improperly withheld from escrow per day of the violation and in a total amount
not to exceed 300 percent of the original amount improperly withheld from
escrow.
(c) In the case of a second knowing violation,
shall be prohibited from selling cigarettes to consumers in this state,
directly or through a distributor, retailer or similar intermediary, for a
period to be fixed by the court not to exceed 2 years.
3. Each failure to make an annual deposit
required by NRS 370A.140 constitutes a separate
violation.
(Added to NRS by 1999, 1108)
NRS 370A.170 Provisions void under certain circumstances. Any provision of this chapter or chapter 370 of NRS, or any amendment thereto,
that causes any provision of this chapter or chapter
370 of NRS to fail to operate as a qualifying statute pursuant to the
Master Settlement Agreement is void.
(Added to NRS by 2013, 2664)
