Nrs: Chapter 370A - Manufacturers Of Tobacco Products

Link to law: https://www.leg.state.nv.us/NRS/NRS-370A.html
Published: 2015

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[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)