§ 68-360.9. Listing of nonparticipating manufacturers in the Oklahoma Tobacco Directory - Bond.

A.  Notwithstanding any other provision of law, if a newly qualified nonparticipating manufacturer is to be listed in the Oklahoma Tobacco Directory (the Directory), or if the Attorney General reasonably determines that any nonparticipating manufacturer who has filed a certification pursuant to Section 360.4 of Title 68 of the Oklahoma Statutes poses an elevated risk for noncompliance with the Master Settlement Agreement or with the Prevention of Youth Access to Tobacco Act, neither such nonparticipating manufacturer nor any of its brand families shall be included in the Directory unless and until such nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the performance of the manufacturer in accordance with Section 13 of this act, has posted a bond in accordance with this section.

B.  The bond shall be posted by corporate surety located within the United States in an amount equal to the greater of Fifty Thousand Dollars ($50,000.00) or the amount of escrow the manufacturer in either its current or predecessor form was required to deposit as a result of its sales in the previous calendar year in Oklahoma.  The bond shall be written in favor of the State of Oklahoma and shall be conditioned on the performance by the nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the performance of the manufacturer in accordance with Section 13 of this act, of all of its duties and obligations under the Prevention of Youth Access to Tobacco Act and the Master Settlement Agreement Complementary Act during the year in which the certification is filed and the next succeeding calendar year.

C.  A nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance with this section or the Prevention of Youth Access to Tobacco Act if:

1.  The nonparticipating manufacturer or any affiliate thereof has underpaid an escrow obligation with respect to any state at any time during the calendar year or within the past three (3) calendar years unless:

a.the manufacturer did not make underpayment knowingly or recklessly and the manufacturer promptly cured the underpayment within one hundred eighty (180) days’ notice of it, or

b.the underpayment or lack of payment is the subject of a good-faith dispute as documented to the satisfaction of the Attorney General and the underpayment is cured within one hundred eighty (180) days of entry of a final order establishing the amount of the required escrow payment;

2.  Any state has removed the manufacturer or its brands or brand families or an affiliate or any of the affiliate’s brands or brand families from the state’s tobacco directory for noncompliance with the state law at any time during the calendar year or within the past three (3) calendar years; or

3.  Any state has litigation pending against, or an unsatisfied judgment against, the manufacturer or any affiliate thereof for escrow or for penalties, costs, or attorney fees related to noncompliance with state escrow laws.

D.  As used in this section, “newly qualified nonparticipating manufacturer” means a nonparticipating manufacturer that has not previously been listed in the Oklahoma Tobacco Directory.  Such manufacturer may be required to post a bond in accordance with this section for the first three (3) years of their listing, or longer if they have been determined to pose an elevated risk for noncompliance.  Any other nonparticipating manufacturer that has been determined to pose an elevated risk for noncompliance shall be required to post a bond in accordance with this section for three (3) years or longer if such nonparticipating manufacturer still poses an elevated risk at the end of such three-year period.

Added by Laws 2009, c. 434, § 14, eff. Jan. 1, 2010.