Illinois Compiled Statutes
Chapter 30 - FINANCE
30 ILCS 168/ - Tobacco Product Manufacturers' Escrow Act.

(30 ILCS 168/1)
Sec. 1.
Short title.
This Act may be cited as the Tobacco Product Manufacturers' Escrow Act.

(Source: P.A. 91-41, eff. 6-30-99.)
 
(30 ILCS 168/5)
Sec. 5.
Findings and Purpose.
(a) Cigarette smoking presents serious public health concerns to the State
of Illinois and to the citizens of the State. The Surgeon General has
determined that smoking causes lung cancer, heart disease, and other serious
diseases, and that there are
hundreds of thousands of tobacco-related deaths in the United States each year.
These diseases most often do not appear until many years after the person in
question begins smoking.
(b) Cigarette smoking also presents serious financial concerns for the State
of Illinois. Under certain health care programs, the State may have a legal
obligation to provide medical assistance to eligible persons for health
conditions associated with cigarette smoking, and those persons may have a
legal entitlement to receive such medical assistance.
(c) Under these programs, the State pays millions of dollars each year to
provide medical assistance for these persons for health conditions associated
with cigarette smoking.
(d) It is the policy of the State of Illinois that financial burdens imposed
on the State by cigarette smoking be borne by tobacco product manufacturers
rather than by the State to the extent that such manufacturers either determine
to enter into a settlement with the State or are found culpable by the courts.
(e) On November 23, 1998, leading United States tobacco product
manufacturers entered into a settlement agreement, entitled the "Master
Settlement Agreement", with the State of Illinois. The Master Settlement
Agreement obligates these manufacturers, in return for a release of past,
present, and certain future claims against them as described in the Agreement,
to pay substantial sums to the State (tied in part to their volume of sales);
to fund a national foundation devoted to the interests of public health; and to
make substantial changes in their advertising and marketing practices and
corporate culture, with the intention of reducing underage smoking.
(f) It would be contrary to the policy of the State of Illinois if tobacco
product manufacturers who determine not to enter into such a settlement could
use a resulting cost advantage to derive large, short-term profits in the
years before liability may arise without ensuring that the State will have an
eventual source of recovery from them if they
are proven to have acted culpably. It is thus in the interest of the State of
Illinois to require that such manufacturers establish a reserve fund to
guarantee a source of compensation and to prevent such manufacturers from
deriving large, short-term
profits and then becoming judgment-proof before liability may arise.

(Source: P.A. 91-41, eff. 6-30-99.)
 
(30 ILCS 168/10)
Sec. 10.
Definitions.
As used in this Act:
"Adjusted for inflation" means increased in accordance with the formula for
inflation adjustment set forth in Exhibit C to the Master Settlement Agreement.
"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 purposes of this definition, the terms "owns", "is owned", and "ownership"
mean ownership of an equity interest, or the equivalent thereof,
of
10% or more, and the term "person" means an individual, partnership, committee,
association, corporation, or any other organization or group of persons.
"Allocable share" means Allocable Share as that term is defined in the Master
Settlement Agreement.
"Cigarette" means any product that contains nicotine, is intended to be
burned or heated under ordinary conditions of use, and consists of or contains:
"Master Settlement Agreement" means the settlement agreement (and related
documents) entered into on November 23, 1998 by the State of Illinois and
leading United States tobacco product manufacturers.
"Qualified escrow fund" means an escrow arrangement with a federally or State
chartered financial institution having no affiliation with any tobacco product
manufacturer and having assets of at least $1,000,000,000 where such
arrangement requires that such financial institution hold the escrowed funds'
principal for the benefit of releasing parties and prohibits the tobacco
product manufacturer placing the funds into escrow from using, accessing, or
directing the use of the funds' principal except as consistent with
subdivision (a)(2)(B) of Section 15 of this Act.
"Released claims" means Released Claims as that term is defined in the Master
Settlement Agreement.
"Releasing parties" means Releasing Parties as that term is defined in the
Master Settlement Agreement.
"Tobacco Product Manufacturer" means any entity that, after the
effective date of this Act directly (and not exclusively through any
affiliate):
"Units sold" means the number of individual cigarettes sold in the State of
Illinois by the applicable tobacco product manufacturer (whether directly or
through a distributor,
retailer, or similar intermediary or intermediaries) during the year in
question, as measured by excise taxes collected by the State on packs (or
"roll-your-own" tobacco containers) bearing the excise tax stamp of the State.
The Illinois Department of Revenue shall promulgate such rules as are
necessary to ascertain the amount of State excise tax paid on the cigarettes of
such tobacco product manufacturer for each year.

(Source: P.A. 91-41, eff. 6-30-99.)
 
(30 ILCS 168/15)
Sec. 15.
Requirements.
(a) Any tobacco product manufacturer selling cigarettes to consumers within
the State of Illinois (whether directly or through a distributor, retailer, or
similar intermediary or intermediaries) after the effective date of this
Act shall do one of the following:
(b) Each failure to make an annual deposit required under this Section shall
constitute a separate violation. If a tobacco product manufacturer is
successfully prosecuted by the Attorney General for a violation of subdivision
(a)(2), the tobacco
product manufacturer must pay, in addition to any fine imposed by a court, the
State's
costs and attorney's fees incurred in the prosecution.

(Source: P.A. 93-446, eff. 1-1-04.)
 
(30 ILCS 168/20)
Sec. 20.

If this amendatory Act of the 93rd General Assembly or any
portion of the amendment to
subdivision (2)(B)(ii) of subsection (a) of Section 15 made by this amendatory
Act of the
93rd General Assembly is held by a court of competent jurisdiction to be
unconstitutional, then such subdivision (2)(B)(ii) of subsection (a) of Section
15 shall be
deemed to be repealed in its entirety. If subdivision (2)(B)(ii) of
subsection (a) of Section 15 shall thereafter be held by a court of competent
jurisdiction to be
unconstitutional, then this amendatory Act of the 93rd General Assembly shall
be deemed repealed and subdivision (2)(B)(ii) of subsection (a) of Section 15
shall be
restored as if no such amendments had been made. Neither any holding of
unconstitutionality nor the
repeal of subdivision (2)(B)(ii) of subsection (a) of Section 15 shall affect,
impair, or
invalidate any other portion of Section 15 or the application of such Section
to any other
person or circumstance, and such remaining portions of Section 15 shall at all
times continue in full force and effect.

(Source: P.A. 93-446, eff. 1-1-04.)
 
(30 ILCS 168/999)
Sec. 999.
Effective Date.
This Act takes effect upon becoming law.

(Source: P.A. 91-41, eff. 6-30-99.)

Structure Illinois Compiled Statutes