Brand family: means all styles of cigarettes sold under the same trademark and differentiated from one another by means of additional modifiers or descriptors, including, but not limited to, "menthol" "lights" "kings" and "100s" and includes any brand name, alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicia of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes. See Tennessee Code 67-4-2601
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Escrow: Money given to a third party to be held for payment until certain conditions are met.
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Financial institution: means a holding company, any regulated financial corporation, a subsidiary of a holding company or a regulated financial corporation, an investment entity that is indirectly more than fifty percent (50%) owned by a holding company or a regulated financial corporation, or any other person that is carrying on the business of a financial institution. See Tennessee Code 67-4-2004
Fraud: Intentional deception resulting in injury to another.
Importer: means any person in the United States to whom cigarettes manufactured in a foreign country are shipped or consigned or any person who removes cigarettes for sale or consumption in the United States from a customs bonded warehouse. See Tennessee Code 67-4-2601
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
Licensed agent: means a person who is authorized to affix tax stamps to packages or other containers of cigarettes under §. See Tennessee Code 67-4-2601
Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
Nonparticipating manufacturer: means any tobacco product manufacturer that is not a participating manufacturer. See Tennessee Code 67-4-2601
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Participating manufacturer: has the meaning given that term in Section II(jj) of the master settlement agreement and all amendments thereto. See Tennessee Code 67-4-2601
Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
Reporter: Makes a record of court proceedings and prepares a transcript, and also publishes the court's opinions or decisions (in the courts of appeals).
Sales: means all gross receipts of the taxpayer not allocated under this part. See Tennessee Code 67-4-2004
Service of process: The service of writs or summonses to the appropriate party.
Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
State: means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States and any foreign country or political subdivision thereof. See Tennessee Code 67-4-2004
Statute: A law passed by a legislature.
United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Every tobacco product manufacturer whose cigarettes are sold in this state, whether directly or through a distributor, retailer or similar intermediary or intermediaries, shall execute and deliver on a form prescribed by the commissioner a certification to the commissioner and attorney general and reporter, no later than the thirtieth day of April each year, certifying under penalty of perjury that, as of the date of such certification, such tobacco product manufacturer either is a participating manufacturer, or is in full compliance with § 47-31-103.(2) A participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update such list thirty (30) calendar days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the attorney general and reporter and commissioner.(3)(A) A nonparticipating manufacturer shall include in its certification:
(i) A list of all of its brand families and the number of units sold for each brand family that were sold in the state during the preceding calendar year;(ii) A list of all of its brand families that have been sold in the state at any time during the current calendar year;(iii) Indication, by an asterisk, of any brand family sold in the state during the preceding calendar year that is no longer being sold in the state as of the date of such certification; and(iv) Identification by name and address of any other manufacturer of such brand families in the preceding or current calendar year.(B) The nonparticipating manufacturer shall update such list thirty (30) calendar days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the attorney general and reporter and commissioner.(4) In the case of a nonparticipating manufacturer, such certification shall further certify:
(A) That such nonparticipating manufacturer is registered to do business in the state or has appointed a resident agent for service of process and provided notice thereof as required by § 67-4-2603;(B) That such nonparticipating manufacturer:
(i) Has established and continues to maintain a qualified escrow fund; and(ii) Has executed a qualified escrow agreement that has been reviewed and approved by the attorney general and reporter and that governs the qualified escrow fund;(C) That such nonparticipating manufacturer is in full compliance with title 47, chapter 31 and this part, and any regulations promulgated pursuant thereto;(D)(i) The name, address and telephone number of the financial institution where the nonparticipating manufacturer has established such qualified escrow fund required pursuant to § 47-31-103 and all regulations promulgated thereto;(ii) The account number of such qualified escrow fund and any sub-account number for Tennessee;(iii) The amount such nonparticipating manufacturer placed in such fund for cigarettes sold in the state during the preceding calendar year, the date and amount of each such deposit, and such evidence or verification as may be deemed necessary by the attorney general and reporter to confirm the foregoing; and(iv) The amount and date of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from such fund or from any other qualified escrow fund into which it ever made escrow payments pursuant to § 47-31-103 and all regulations promulgated thereto; and(E) That the nonparticipating manufacturer has certified in writing on a form approved by the commissioner that it consents to be sued in the circuit or chancery courts in the state for purposes of enforcing this statute or for an action to enforce § 47-31-103.(5) In the case of a nonparticipating manufacturer located outside of the United States, the certification shall further certify that the nonparticipating manufacturer has provided a declaration from each of its importers into the United States of any of its brand families to be sold in this state. The declaration shall be on a form prescribed by the attorney general and reporter and shall state the following:
(A) The importer accepts joint and several liability with the nonparticipating manufacturer for all obligations to place funds into a qualified escrow fund, for payment of all civil penalties and for payment of all reasonable costs and expenses of investigation and prosecution, including attorneys’ fees, authorized in accordance with the Tennessee Tobacco Manufacturers’ Escrow Fund Act of 1999, compiled in title 47, chapter 31;(B) The importer consents to personal jurisdiction in Tennessee for the purpose of claims by the state for any obligation to place funds into a qualified escrow fund, for payment of any civil penalties and for payment of any reasonable costs and expenses of investigation or prosecution, including attorneys’ fees, authorized in accordance with the Tennessee Tobacco Manufacturers’ Escrow Fund Act of 1999; and(C) The importer has appointed a registered agent for service of process in this state according to the same requirements as established in this part for any nonresident or foreign nonparticipating manufacturer that has not registered to do business in this state as a foreign corporation or business entity.(6) A tobacco product manufacturer may not include a brand family in its certification unless:
(A) In the case of a participating manufacturer, said participating manufacturer affirms that the brand family is deemed to be its cigarettes for purposes of calculating its payments under the master settlement agreement for the relevant year, in the volume and shares determined pursuant to the master settlement agreement; and(B) In the case of a nonparticipating manufacturer, said nonparticipating manufacturer affirms that the brand family is deemed to be its cigarettes for purposes of § 47-31-103. Nothing in this section shall be construed as limiting or otherwise affecting the state’s right to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the master settlement agreement or for purposes of § 47-31-103.(7) Tobacco product manufacturers shall maintain all invoices and documentation of sales and other such information relied upon for such certification for a period of five (5) years, unless otherwise required by law to maintain them for a greater period of time.(b) Not later than May 31, 2003, the commissioner shall develop and make available for public inspection a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of subsection (a) and all brand families that are listed in such certifications (the “directory”), except that:
(1) The commissioner shall not include or retain in such directory the name or brand families of any nonparticipating manufacturer that has failed to provide the required certification or whose certification the commissioner determines is not in compliance with subdivisions (a)(2) and (3), unless the commissioner has determined that such violation has been cured to the satisfaction of the commissioner;(2) Neither a tobacco product manufacturer nor brand family shall be included or retained in the directory, if the commissioner concludes, in the case of a nonparticipating manufacturer, that:
(A) Any escrow payment required pursuant to § 47-31-103 for any period for any brand family, whether or not listed by such nonparticipating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the attorney general and reporter;(B) Any outstanding final judgment, including interest on the judgment, for a violation of § 47-31-103 has not been fully satisfied for such brand family or such manufacturer; or(C) Such nonparticipating manufacturer has underpaid escrow obligations in this state or any state unless such underpayment is cured within sixty (60) days of entry of a final order establishing the required escrow payment amount; however, such cure shall have no such effect if such underpayment is the result of fraud or deceit;(3) A nonparticipating tobacco product manufacturer may be removed from the state’s directory of approved tobacco product manufacturers, if the commissioner determines such action is in the best interest of the state and the operation of the directory, if the tobacco product manufacturer or any of its affiliates, officers, directors, or owners has:
(A) Been removed from any state’s directory of approved tobacco product manufacturers based on any acts or omissions that would, if done in this state, be grounds for removal from the directory, except that if the basis for removal is a good faith dispute regarding the amount of escrow required for units sold in other states, the nonparticipating manufacturer shall have the opportunity to cure the underpayment of escrow within sixty (60) days of entry of a final order establishing the required escrow payment amount;(B) Plead guilty or nolo contendere to or has been found guilty of a crime relating to the reporting, distribution, sale or taxation of cigarettes or tobacco products; or(C) Failed to cooperate with any request for information from the commissioner made pursuant to § 67-4-2604(d) to the satisfaction of the commissioner;(4) The commissioner shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of this part; and(5) Every licensed agent shall provide and update as necessary an electronic mail address to the commissioner for the purpose of receiving any notifications as may be required by this part.(c) It shall be unlawful for any person to:
(1) Affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory; or(2) Sell, offer, or possess for sale, in this state, or import for personal consumption in this state, cigarettes of a tobacco product manufacturer or brand family not included in the directory.(d)(1) A nonparticipating manufacturer shall not be included or retained in the directory of approved tobacco product manufacturers until it has posted a bond in accordance with this subsection (d), in addition to any other requirements for inclusion in the directory contained in this part.(2) The bond required by this subsection (d) shall be posted by corporate surety located within the United States. The amount of the bond shall be the greater of one hundred thousand dollars ($100,000) or the greatest required escrow amount due from the nonparticipating manufacturer or its predecessor for any of the twelve (12) preceding calendar quarters. The bond shall be posted at least ten (10) days in advance of each calendar quarter.(3) The bond shall be written in favor of the state of Tennessee and shall be conditioned on the performance by the nonparticipating manufacturer of all of its escrow deposit and other financial obligations under this part and § 47-31-103.(4) If the nonparticipating manufacturer has failed to make or have made on its behalf escrow deposits equal to the full amount owed for a quarter within fifteen (15) days following the due date for the quarter, the state may execute upon the bond in the amount equal to any remaining amount of escrow due. The amount collected may be deposited into the state treasury and shall reduce the amount of escrow due from that nonparticipating manufacturer by the dollar amount collected.(5) If the state obtains a judgment against the nonparticipating manufacturer for the nonparticipating manufacturer’s failure to make an escrow deposit, the state may also execute on the bond to recover the amount of civil penalties and attorneys’ fees obtained in that judgment. Funds collected from such bonds shall be counted first toward the amount of escrow due but not deposited into escrow by the nonparticipating manufacturer.(e) For each nonparticipating manufacturer located outside of the United States, each importer into the United States of any such nonparticipating manufacturer’s brand families that are sold in this state shall bear joint and several liability with such nonparticipating manufacturer for all obligations to place funds into a qualified escrow fund, for payment of all civil penalties and for payment of all reasonable costs and expenses of investigation and prosecution, including attorneys’ fees, authorized in accordance with the Tennessee Tobacco Manufacturers’ Escrow Fund Act of 1999.(f)Service of process on the importer’s appointed registered agent for service of process may be served in any manner authorized by law and shall constitute legal and valid service of process on the importer. The importer is subject to the same requirements in this part as nonparticipating manufacturers regarding notice of termination of the agency appointment. Any importer that has not appointed and engaged an agent as required in this section shall be deemed to have appointed the secretary of state as such agent and may be proceeded against in courts of this state by service of process on the secretary of state.
