Tobacco Master Settlement Agreement: qualified escrow funds.

Under existing law, states' attorneys general and various tobacco product manufacturers have entered into a Master Settlement Agreement (MSA) , in settlement of various lawsuits, that provides for the allocation of money to the states and certain territories. Existing law requires a tobacco product manufacturer selling cigarettes to consumers within the state to either become a participating manufacturer, as defined, and generally perform its financial obligations under the MSA, or to place specified amounts into a qualified escrow fund, which are calculated on a per unit sold basis, as specified. For each tobacco product manufacturer that places amounts into a qualified escrow fund, existing law requires that manufacturer to certify to the Attorney General that the manufacturer has complied with existing law, and the failure to place all required funds into escrow subjects the manufacturer to civil penalties, as specified. This bill would, for the purposes of calculating the amount a tobacco product manufacturer is required to place in the qualified escrow fund, revise the definition of "units sold" to specify that it means the number of cigarettes sold to a consumer, regardless of whether the state excise tax was due or collected, but would exclude, among other things, cigarettes sold at federal military installations.