(a) If a newly qualified nonparticipating manufacturer is to be listed in the directory maintained by the Attorney General under § 26-57-1303 or if the Attorney General determines that a nonparticipating manufacturer who has filed a certification under § 26-57-1303 poses an elevated risk for noncompliance with either § 26-57-1305 or §§ 26-57-260 and 26-57-261, the nonparticipating manufacturer and the nonparticipating manufacturer's brand families shall not be included in the directory unless the nonparticipating manufacturer or its United States importer that undertakes joint and several liability for the nonparticipating manufacturer's performance under § 26-57-1307 has posted a bond in accordance with this section.
(b) (1) The bond required under subsection (a) of this section shall be posted by corporate surety located within the United States in an amount equal to the greater of fifty thousand dollars ($50,000) or the amount of escrow the manufacturer in either its current form or predecessor form was required to deposit as a result of its previous two (2) calendar quarters sales in the state.
(2) The bond required under subsection (a) of this section shall be written in favor of the state 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 under § 26-57-1307 of all of the nonparticipating manufacturer's duties and obligations under § 26-57-1305 or §§ 26-57-260 and 26-57-261.
(c) A nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance with this section if:
(1) The nonparticipating manufacturer or any affiliate thereof has underpaid an escrow obligation with respect to any state during the calendar year or within the past three (3) calendar years unless:
(A) The manufacturer did not knowingly or recklessly make an underpayment, and the manufacturer promptly cured the underpayment within one hundred eighty (180) days of receiving the notice of the underpayment; or
(B) The underpayment or lack of payment is the subject of a good faith dispute as documented to the satisfaction of the Attorney General, and the underpayment is cured within one hundred eighty (180) days of entry of a final order establishing the amount of the required escrow payment;
(2) A state has removed the manufacturer, the manufacturer's brands or brand families, an affiliate of the manufacturer, or any of the affiliate's brands or brand families from the state's tobacco directory for noncompliance with the state's law during the calendar year or within the past three (3) calendar years; or
(3) A state has litigation pending against, or an unsatisfied judgment against, the manufacturer or any affiliate of the manufacturer for escrow, penalties, costs, or attorney's fees related to noncompliance with state escrow laws.
(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.
Section: Previous 26-57-1302 26-57-1303 26-57-1304 26-57-1305 26-57-1306 26-57-1307 26-57-1308Last modified: November 15, 2016