S.C. Code Regs. § § 13-1110

Current through Register Vol. 48, 12, December 27, 2024

Section 13-1110 - Bond Requirement for Nonparticipating Manufacturer

A. In order to promote compliance with the South Carolina Tobacco Escrow Fund Act, if a newly qualified nonparticipating manufacturer is to be listed on the South Carolina Tobacco Directory, or if the Attorney General reasonably determines that any nonparticipating manufacturer who has filed a certification pursuant to Section 11-47-30 poses an elevated risk for noncompliance with the Tobacco Escrow Fund Act, neither such nonparticipating manufacturer nor any of its brand families shall be included in the Directory unless and until such nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the manufacturer's compliance, has posted a bond.

B. A nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance if:

1. The nonparticipating manufacturer has not previously established and funded a qualified escrow fund in South Carolina;

2. The nonparticipating manufacturer has been on the tobacco directory for less than one year;

3. The nonparticipating manufacturer has failed to make a timely and/or complete escrow deposit unless (i) the manufacturer did not make underpayment knowingly or recklessly and the manufacturer promptly cured the underpayment within 30 days of notice of it, or (ii) the underpayment or lack of payment is subject to a good faith dispute as documented to the satisfaction of the Attorney General and the underpayment is cured within 30 days;

4. The nonparticipating manufacturer has failed to pay any judgment, regardless of the status of the judgment under applicable statutes of limitations, obtained in any jurisdiction, including any civil penalties and other monetary amounts awarded stemming from any jurisdiction's escrow deposit laws;

5. The nonparticipating manufacturer or its brands or brand families or an affiliate or any of the affiliate's brands or brand families have been removed from the state's tobacco directory for noncompliance with the state law at any time during the calendar year or within the past three calendar years; or

6. In addition to the reasons specified above, the Attorney General may require a bond from a nonparticipating manufacturer if the Attorney General has reasonable grounds to believe the nonparticipating manufacturer may default on its obligations under the Tobacco Escrow Fund Act.

C. The bond shall be posted by corporate surety located within the United States in an amount equal to the greater of one hundred thousand ($100,000) dollars or the amount of escrow the manufacturer in either its current or predecessor form was required to deposit as a result of its previous calendar year's sales in South Carolina. The bond shall be written in favor of the State of South Carolina and shall be conditioned on the performance by the nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the manufacturer's performance in accordance with the Tobacco Escrow Fund Act.

D. A newly qualified nonparticipating manufacturer may be required to post a bond under this section for the first three (3) years of the newly qualified nonparticipating manufacturer's listing or longer if the newly qualified nonparticipating manufacturer has been deemed to pose an elevated risk for noncompliance

S.C. Code Regs. § 13-1110

Added by State Register Volume 38, Issue No. 6, eff 6/27/2014.