How Do I?
____
Topic Categories
The Tobacco Master Settlement Agreement (MSA), Model Escrow Statute, And
The Nevada Tobacco Directory
The MSA
In 1998, the Attorneys General of 46 states signed the Master
Settlement Agreement (“MSA”) with the four largest tobacco
companies in the United States; Brown & Williamson, Lorillard,
Philip Morris, and R.J. Reynolds. The MSA and relation documents
can be found at the National Association of Attorneys General
website,
http://www.naag.org,
Tobacco.
The MSA settled lawsuits by the states to recover costs
associated with treating smoking-related illnesses. (Four states
– Florida, Minnesota, Texas, and Mississippi settled their
tobacco cases separately from the MSA states). The MSA
authorizes other tobacco product manufacturers to participate in
the Agreement, and since November, 1998, over forty additional
tobacco companies have joined the MSA.
The MSA imposes
restrictions on the advertising, promotion, and
marketing or packaging of cigarettes, including a ban on
“targeting youth,” and requires the participating manufacturers
to make payments to the MSA states on or before April 15 of each
year for a period of 25 years. Over $47 billion has been paid to
the Settling States to date, of which Nevada has received
approximately $290 million.
In 1999, the Nevada Legislature approved two bills which
determine how the tobacco settlement proceeds are distributed.
Pursuant to the mandates set forth by the Nevada Legislature in
Assembly Bill 474 and Senate Bill 496, approximately 60% of the
tobacco money goes towards health care programs, and 40% funds
Nevada’s Millennium Scholarship Program. The Nevada State
Treasurer is charged with administering the tobacco funds.
The Model Escrow Statute (NRS Chapter 370A)
The MSA also contains
provisions designed to ensure a source of
recovery for the costs of treating smoking-related illnesses
caused by cigarettes sold by tobacco manufacturers which are not
bound by the MSA’s marketing restrictions and which have no
payment obligations. In order to accomplish this goal, the MSA
States enacted legislation, generally referred to as “Model
Escrow Statutes,” requiring the non-participating manufacturers
(NPMs) to annually deposit into a qualified escrow fund, of
which the State is a designated beneficiary, approximately 2
cents per cigarette/.09 oz of roll-your-own sold based upon the
preceding year’s sales. Nevada’s Model Statute is Chapter 370A
of the Nevada Revised Statutes (NRS), and can be found on the
Nevada Legislature’s website,
www.leg.state.nv.us,
Law Library, Nevada Revised Statutes.
The escrow fund is a fund against which Nevada can recover any
judgment or settlement the State may obtain based on claims
against an NPM for costs arising out of smoking-related
illnesses. Below is a Model Escrow Agreement which has been
approved by the Office of the Attorney General for use by an NPM
and its financial institution.
The Nevada Tobacco Directory
During the 2005 Nevada Legislative Session, the Nevada
Legislature adopted Assembly Bill (AB) 436. The provisions of AB
436 compliment Nevada’s Model Escrow Statute. AB 436 can be
found on the Nevada Legislature’s website,
2005 Session, Assembly Bills, and is
codified at NRS 370.600 through NRS 370.705, which can also be found
at the Nevada Legislature’s website,
Law Library, Nevada Revised Statutes.
AB 436 imposes several new requirements upon tobacco product
manufacturers and distributors. In order to sell cigarettes
and/or roll-your-own tobacco in Nevada, the manufacturer of the
tobacco product must submit an initial Certificate of Tobacco
Product Manufacturer to the Office of the Attorney General. If
the certificate is approved, the tobacco product manufacturer
and its certified brands will be placed on the Nevada Tobacco
Directory. The Tobacco Directory is posted on the Department of
Taxation’s website,
http://www.tax.state.nv.us.
It is unlawful for any person to
affix a stamp to a package or other container of cigarettes of a
manufacturer of tobacco products or brand family which is not
included in the Tobacco Directory, or to sell or offer or
possess for sale in Nevada cigarettes and/or roll-your-own of a
manufacturer of tobacco products or brand family not included in
the Tobacco Directory.
In addition, on or before April 30 of each year, all tobacco
product manufacturers who sold cigarettes and/or roll-your-own
product in the preceding year, or who are currently selling
cigarettes and/or roll-your-own product in Nevada, are required
to execute and deliver to the Office of the Attorney General an
annual Certificate of Tobacco Product Manufacturer.
Finally, the new law requires that all NPMs make the escrow
payment required by NRS Chapter 370A on a quarterly basis.
The Certificate of Tobacco Product Manufacturer and related
Definitions, General Information, and Checklist are to be used
when filing an initial certification, annual certification, and
supplemental certification. The NPM Quarterly Certificate of
Compliance and Quarterly Certification Instructions are to be
used by NPMs when filing their quarterly escrow payment
certification. As of July 1, 2010, all cigarettes sold in
Nevada must be Fire Standard compliant. For more information about
Fire Standard certification of cigarettes, refer to the link below
for the Nevada State Fire Marshal’s tobacco web page.
For further information, please contact:
Nevada Attorney General’s Office
Tobacco Enforcement Unit
100 N. Carson St.
Carson City, NV 89701
775-684-1100
2012 Compliance
Letter to Tobacco Product Manufacturers
Initial Certificates of Compliance