Section 5674 - Requirements(a) General rule.-- Any tobacco product manufacturer that sells cigarettes to consumers within this Commonwealth after the effective date of this act shall do one of the following:(1) Become a participating manufacturer as defined in the Master Settlement Agreement and generally perform its financial obligations under the Master Settlement Agreement.(2) Place into a qualified escrow fund by April 15 of the year following the year in question the following amounts, as the amounts are adjusted for inflation: (i) 2000 - $.0104712 per unit sold after the effective date of this act.(ii) For each of 2001 and 2002 - $.0136125 per unit sold.(iii) For each of 2003 through 2006 - $.0167539 per unit sold.(iv) For each of 2007 and each year thereafter -$.0188482 per unit sold.(b) Funds in escrow.-- A tobacco product manufacturer that places funds into escrow under subsection (a)(2) shall receive the interest or other appreciation on such funds as earned. The funds themselves shall be released from escrow only under the following circumstances:(1) To pay a judgment or settlement on any released claim brought against such tobacco product manufacturer by the Commonwealth or any releasing party located or residing in this Commonwealth. Funds shall be released from escrow under this paragraph in the order in which they were placed into escrow and only to the extent and at the time necessary to make payments required under such judgment or settlement.(2) Deleted by 2004, Nov. 19, P.L. 870, No. 114, § 1, imd. effective.(2.1) 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 this Commonwealth 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 had it been a participating manufacturer, the excess shall be released from escrow and shall revert back to such tobacco product manufacturer. The provisions of this paragraph are nonseverable. If any provision of this paragraph or its application to any person or circumstance is held invalid, the remaining provisions or applications of this paragraph are void. Subsec. (b)(2.2) effective upon publication of notice under section 2 of 2004, Nov. 19, P.L. 870, No. 114.
(2.2) To the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow in a particular year was greater than the Commonwealth's allocable share of the total payments that the manufacturer would have been required to make in that year under the Master Settlement Agreement had it been a participating manufacturer, as such payments are determined pursuant to section IX(i)(2) of the Master Settlement Agreement and before any of the adjustments or offsets described in section IX(i)(3) of the Master Settlement Agreement other than the inflation adjustment, the excess shall be released from escrow and revert back to such tobacco product manufacturer.(3) To the extent not released from escrow under this subsection, funds shall be released from escrow and revert back to the tobacco product manufacturer 25 years after the date on which they were placed into escrow.(c) Certification.-- Each tobacco product manufacturer that decides to place funds into escrow under subsection (a)(2) shall annually certify to the Attorney General that it is in compliance with subsection (a). The Commonwealth may bring a civil action against any tobacco product manufacturer that fails to place into escrow the funds required under this section. Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall:(1) Be required within 15 days after a finding of a violation by the court to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a violation of subsection (a)(2), (b) or (c), may impose a civil penalty to be paid to the General Fund of the Commonwealth in an amount not to exceed 5% of the amount improperly withheld from escrow per day of the violation, not to exceed 100% of the original amount improperly withheld from escrow for that year.(2) In the case of a knowing violation, be required to place the funds into escrow within 15 days after a finding of a violation by the court to bring the tobacco product manufacturer into compliance with subsections (a)(2), (b) and (c). The court, upon a finding of a knowing violation of subsection (a)(2), (b) or (c), may impose a civil penalty to be paid to the General Fund of the Commonwealth not to exceed 15% of the amount improperly withheld from escrow per day of the violation. The total amount of a civil penalty under this paragraph shall not exceed 300% of the original amount improperly withheld from escrow for that year.(3) In the case of a second knowing violation of subsection (a)(2), (b) or (c), be prohibited from selling cigarettes to consumers within this Commonwealth for a period not to exceed two years. For purposes of this section, each year that the tobacco product manufacturer fails to place funds in escrow as required by subsections (a) and (b) shall constitute a separate offense.(d) Fees and costs.-- The Commonwealth shall receive reimbursement from the tobacco product manufacturer for fees and costs, including attorney fees, incurred in the enforcement of this section.2000, June 22, P.L. 394, No. 54, §4, imd. effective. Amended 2004, Nov. 19, P.L. 870, No. 114, § 1.