50-6a09. Non-participating manufacturers; required to post bond, conditions; amount; elevated risk, circumstances.
50-6a09
50-6a09. Non-participating manufacturers; requiredto post bond, conditions; amount; elevated risk, circumstances.(a) Notwithstanding any other provision of law, if a newlyqualified non-participating manufacturer is to be listed in the directory, orif the attorney general reasonably determines that any non-participatingmanufacturer who has filed a certification pursuant to subsection (c) of K.S.A.50-6a04, and amendments thereto, poses an elevated risk for noncompliance withthis act neither such non-participating manufacturer nor any of its brandfamilies shall be included or retained in the directory unless and until suchnon-participating manufacturer, or its United States importer that undertakesjoint and several liability for the manufacturer's performance in accordancewith subsection (c)(3)(I) of K.S.A. 50-6a04, and amendments thereto, has posteda bond in accordance with this section.
(b) The bond required by this section shall be posted by corporate suretylocated within the United States in an amount equal to the greater of $50,000or the amount of escrow the non-participatingmanufacturer in either its current or predecessorform was required to deposit for sales of cigarettes in this state during theprevious calendar year. The bond shall be written in favor of the state ofKansas and shall be conditioned on the performance by the non-participatingmanufacturer, or its United States importer that undertakes joint and severalliability for the manufacturer's performance in accordance with subsection(c)(3)(I) of K.S.A. 50-6a04, and amendments thereto, of all of its duties andobligations under this act during the year in which the certification is filedand the next succeeding calendar year.
(c) A non-participating manufacturer may be deemed to pose an elevated riskfor noncompliance with this act if:
(1) The non-participating manufacturer, or any affiliate thereof, hasunderpaid an escrow obligation with respect to any other state or jurisdictionthat is a party to the master settlement agreement at any time within the threecalendar years prior to the date of submission or approval of the most recentcertification, unless:
(A) The non-participating manufacturer did not make the underpaymentknowingly or recklessly and the non-participating manufacturer promptly curedthe underpayment within 180 calendar days of notice of the underpayment; or
(B) the underpayment or lack of payment is the subject of a good faithdispute as documented to the satisfaction of the attorney general and theunderpayment is cured within 90 calendar days of entry of a final orderestablishing the amount of the required escrow payment;
(2) any state or jurisdiction that is party to the master settlementagreement has removed the non-participating manufacturer, or its brands orbrand families, or an affiliate, or such affiliate's brands or brand families,from the state's directory for noncompliance with the corresponding laws ofsuch other state or jurisdiction at any time within three calendar years priorto the date of submission or approval of the most recent certification; or
(3) any state or jurisdiction that is party to the master settlementagreement has pending litigation, or an unsatisfied judgment against thenon-participating manufacturer, or any affiliate thereof, for unpaid escrowobligations, or associated penalties, costs or attorney fees.
(d) As used in this section, "newly qualified non-participating manufacturer"means a non-participating manufacturer that has not previously been listed inthe directory. Such non-participating manufacturer may be required to post abond in accordance with this section for the first five years of its listing,or longer, if they have been deemed to pose an elevated risk fornoncompliance.
History: L. 2009, ch. 110, § 5; July 1.