TITLE LV
PROCEEDINGS IN SPECIAL CASES
Chapter 541-D
TOBACCO PRODUCT MANUFACTURERS' FAILURE TO COMPLY
Section 541-D:1
541-D:1 Findings and Purpose. –
The legislature finds that violations of RSA 541-C threaten the integrity of the tobacco Master Settlement Agreement. The legislature finds that enacting procedural enhancements will safeguard the Master Settlement Agreement. The provisions of this act are not intended to and shall not be interpreted to amend RSA 541-C.
Source. 2003, 152:1, eff. Jan. 1, 2004.
Section 541-D:2
541-D:2 Definitions. –
In this chapter:
I. "Brand family" means all styles of cigarettes sold under the same trade mark 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 use of a 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.
II. "Cigarette" has the same meaning as in RSA 541-C:2, IV.
III. "Commissioner" means the commissioner of revenue administration.
IV. "Non-participating manufacturer" means any tobacco product manufacturer that is not a participating manufacturer.
V. "Participating manufacturer" has the meaning given that term in Section II(jj) of the Master Settlement Agreement and all amendments thereto.
VI. "Qualified escrow fund" has the same meaning as that term is defined in RSA 541-C:2, VI.
VII. "Stamping agent" means a person that is authorized to affix tax stamps to packages or other containers or cigarettes under RSA 78 or any person that is required to pay the tobacco tax imposed pursuant to RSA 78 on cigarettes.
VIII. "Tobacco product manufacturer" has the same meaning as that term is defined in RSA 541-C:2, IX.
IX. "Units sold" has the same meaning as that term is defined in RSA 541-C:2, X.
Source. 2003, 152:1, eff. Jan. 1, 2004.
Section 541-D:3
541-D:3 Certifications; Directory; Tax Stamps. –
I. 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 attorney general a certification to the attorney general 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 RSA 541-C.
(a) A participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update such list 30 days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the attorney general.
(b) (1) A non-participating manufacturer shall include in its certification, a complete list of all of its brand families:
(A) Separately listing brand families of cigarettes and the number of units sold for each brand family that were sold in the state during the preceding calendar year;
(B) All of its brand families that have been sold in the state at any time during the current calendar year;
(C) Indicating by an asterisk, 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
(D) Identifying by name and address any other manufacturer of such brand families in the preceding calendar year.
(2) The non-participating manufacturer shall update such list 30 days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the attorney general.
(c) In the case of a non-participating manufacturer, such certification shall further certify:
(1) That such non-participating manufacturer is registered to do business in the state or has appointed an agent for service of process and provided notice thereof as required by subparagraph (d).
(2) That such non-participating manufacturer has:
(A) Established and continues to maintain a qualified escrow fund as that term is defined in RSA 541-C:2, VI; and
(B) Executed a qualified escrow agreement that has been reviewed and approved by the attorney general and that governs the qualified escrow fund.
(3) That such non-participating manufacturer is in full compliance with RSA 541-C and this section, and any rules adopted pursuant thereto;
(4) The name, address and telephone number of the financial institution where the non-participating manufacturer has established such qualified escrow fund, required pursuant to RSA 541-C:2, VI and all rules adopted thereunder; the account number of such qualified escrow fund and sub-account number for the state of New Hampshire; the amount such non-participating 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 to confirm the foregoing; and the amounts of and dates of any withdrawal or transfer of funds the non-participating manufacturer made at any time from such fund or from any other qualified escrow fund into which it ever made escrow payments pursuant to RSA 541-C and all rules adopted thereunder.
(d) A tobacco product manufacturer may not include a brand family in its certification unless:
(1) In the case of a participating manufacturer, said participating manufacturer affirms that the brand family is to be 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
(2) In the case of a non-participating manufacturer, said non-participating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of RSA 541-C.
(e) 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 RSA 541-C.
(f) The tobacco product manufacturers shall maintain all invoices and documentation of sales and other such information relied upon for such certification for a period of 5 years, unless otherwise required by law to maintain them for a greater period of time.
II. Not later than January 1, 2004 the attorney general shall develop and publish on the state website a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of paragraph I and all brand families that are listed in such certifications ("the directory"), except as otherwise provided in this paragraph.
(a) The attorney general shall not include or retain in such directory the name or brand families of any non-participating manufacturer that fails to provide the required certification or whose certification the attorney general determines is not in compliance with subparagraphs I(b) and (c), unless the attorney general has determined that such violation has been cured to the satisfaction of the attorney general.
(b) Neither a tobacco product manufacturer nor brand family shall be included or retained in the directory if the attorney general concludes that:
(1) In the case of a non-participating manufacturer all escrow payments required pursuant to RSA 541-C:3 for any period for any brand family, whether or not listed by such non-participating manufacturer, have not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the attorney general; or
(2) All outstanding final judgments, including interest thereon, for violations of RSA 541-C have not been fully satisfied for such brand family and such manufacturer.
(c) The attorney general shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand families to keep the directory in conformity with the requirements of this chapter.
(d) Every stamping agent shall provide and update as necessary an electronic mail address to the attorney general for the purpose of receiving any notifications as may be required by this chapter.
III. Prohibition against stamping or sale or import of cigarettes not in the directory. It shall be unlawful for any person:
(a) To affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory; and
(b) To 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.
Source. 2003, 152:1, eff. Jan. 1, 2004.
Section 541-D:4
541-D:4 Agent for Service of Process. –
I. Any non-resident or foreign non-participating manufacturer that has not registered to do business in the state as a foreign corporation or business entity shall, as a condition precedent to having its brand families listed or retained in the directory, appoint and continually engage without interruption the services of an agent in this state to act as agent for the service of process on whom all process, and any action or proceeding against it concerning or arising out of the enforcement of the Master Settlement Agreement and RSA 541-C, may be served in any manner authorized by law. Such service shall constitute legal and valid service of process on the non-participating manufacturer. The non-participating manufacturer shall provide the name, address, phone number, and proof of the appointment and availability of such agent to and to the satisfaction of the attorney general.
II. The non-participating manufacturer shall provide notice to the attorney general 30 calendar days prior to termination of the authority of an agent and shall further provide proof to the satisfaction of the attorney general of the appointment of a new agent no less than 5 calendar days prior to the termination of an existing agent appointment. In the event an agent terminates an agency appointment, the non-participating manufacturer shall notify the attorney general of said termination within 5 calendar days and shall include proof to the satisfaction of the attorney general of the appointment of a new agent.
III. Any non-participating manufacturer whose products are sold in this state, without appointing or designating an agent as herein required 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 upon the secretary of state; however, the appointment of the secretary of state as such agent shall not satisfy the condition precedent to having its brand families listed or retained in the directory.
Source. 2003, 152:1, eff. Jan. 1, 2004.
Section 541-D:5
541-D:5 Reporting of Information; Escrow Installments. –
I. Not later than 20 days after the end of each calendar quarter, and more frequently if so directed by the attorney general, each stamping agent shall submit such information as the attorney general requires to facilitate compliance with this section, including, but not limited to, a list by brand family of the total number of cigarettes or in the case of roll your own, the equivalent stick count for which the stamping agent affixed stamps during the previous calendar quarter or otherwise paid the tax due for such cigarettes. The stamping agent shall maintain, and make available to the attorney general, all invoices and documentation of sales of all non-participating manufacturer cigarettes and any other information relied upon in reporting to the attorney general for a period of 5 years.
II. As provided under RSA 21-J:14, XII, the commissioner is authorized to disclose to the attorney general or designee any information received under this chapter and requested by the attorney general or designee for purposes of determining compliance with and enforcing the provisions of this chapter. The commissioner and attorney general shall share with each other the information received under this chapter, and may share such information with other federal, state or local agencies only for purposes of enforcement of this chapter, the Master Settlement Agreement, RSA 541-C, or corresponding laws of other states.
III. The attorney general may require at any time from the non-participating manufacturer, proof from the financial institution in which such manufacturer has established a qualified escrow fund for the purpose of compliance with RSA 541-C of the amount of money in such fund being held on behalf of the state and the dates of deposits, and listing the amounts of all withdrawals from such fund and the dates thereof.
IV. In addition to the information required to be submitted pursuant to this section, the attorney general may require a stamping agent, distributor or tobacco product manufacturer to submit any additional information including, but not limited to, samples of the packaging or labeling of each brand family, as is necessary to enable the attorney general to determine whether a tobacco product manufacturer is in compliance with this chapter.
V. To promote compliance with the provisions of this chapter, the attorney general may adopt rules requiring a tobacco product manufacturer subject to the requirements of RSA 541-C:3, I(b) to make the escrow deposits required in quarterly installments during the year in which the sales covered by such deposits are made. The attorney general may require production of information sufficient to enable the attorney general to determine the adequacy of the amount of the installment deposit.
Source. 2003, 152:1, eff. Jan. 1, 2004.
Section 541-D:6
541-D:6 Penalties and Other Remedies. –
I. In addition to or in lieu of any other civil or criminal remedy provided by law, upon a determination that any person has violated RSA 541-D:3, III or any rule adopted pursuant thereto, the commissioner may revoke or suspend the license of any stamping agent in the manner provided by RSA 78:20. Each stamp affixed and each offer to sell cigarettes in violation of RSA 541-D:3, III shall constitute a separate violation. For each violation hereof, the commissioner may also impose a civil penalty in an amount not to exceed the greater of 500 percent of the retail value of the cigarettes sold or $5,000 upon a determination of violation of RSA 541-D:3, III or any rules adopted pursuant thereto. Such penalty shall be imposed in the manner provided by RSA 78 or RSA 21-J.
II. Any cigarettes that have been sold, offered for sale, or possessed for sale in this state, in violation of RSA 541-D:3, III shall be deemed contraband under RSA 78:18 and such cigarettes shall be subject to seizure and forfeiture as provided in such section, and all such cigarettes so seized and forfeited shall be destroyed and not resold.
III. The attorney general, on behalf of the commissioner, may seek an injunction to restrain a threatened or actual violation of RSA 541-D:3, III, 541-D:5, I, or 541-D:5, IV, by a stamping agent and to compel the stamping agent to comply with such provisions. In any action brought pursuant to this section, the state shall be entitled to recover the costs of investigation, costs of the action, and reasonable attorney's fees.
Source. 2003, 152:1, eff. Jan. 1, 2004. 2019, 178:7, eff. Jan. 1, 2020.
Section 541-D:7
541-D:7 Notice and Review of Determination. –
A determination of the attorney general to not list or to remove from the directory a brand family or tobacco product manufacturer shall be subject to review in the manner prescribed by RSA 541.
Source. 2003, 152:1, eff. Jan. 1, 2004.
Section 541-D:8
541-D:8 Recovery of Costs and Fees by Attorney General. –
In any action brought by the state to enforce this chapter, the state shall be entitled to recover the costs of investigation, expert witness fees, costs of the action, and reasonable attorney's fees.
Source. 2003, 152:1, eff. Jan. 1, 2004.
Section 541-D:9
541-D:9 Rulemaking. –
The attorney general shall adopt rules, pursuant to RSA 541-A, necessary to effect the purposes of this chapter.
Source. 2003, 152:1, eff. Jan. 1, 2004.