Section 445.10  Definitions

 

            "Affiliate" means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. Solely for purposes of this definition, the terms "owns," "is owned," and "ownership" mean ownership of an equity interest, or the equivalent thereof, of 10% or more, and the term "person" means an individual, partnership, committee, association, corporation, or any other organization or group of persons.

 

            "Distributor" means any and each of the following:

 

            Any person engaged in the business of selling cigarettes in this State who brings or causes to be brought into this State from outside this State any original packages of cigarettes, on which original packages there is no authorized evidence underneath a sealed transparent wrapper showing that the tax liability imposed by the Cigarette Tax Act has been paid or assumed by the out-of-State seller of such cigarettes, for sale or other disposition in the course of such business.

 

            Any person who makes, manufactures or fabricates cigarettes in this State for sale in this State.

 

            Any person who makes, manufactures or fabricates cigarettes outside this State, which cigarettes are placed in original packages contained in sealed transparent wrappers, for delivery or shipment into this State, and who elects to qualify and is accepted by the Department as a distributor under Section 4b of the Cigarette Tax Act.

 

            "Master Settlement Agreement" means the settlement agreement (and related documents) entered into on November 23, 1998 by the State of Illinois and leading United States tobacco product manufacturers.

 

            "Participating manufacturer" means a tobacco product manufacturer who participates in the Master Settlement Agreement as provided in Section II(jj) of the Master Settlement Agreement.

 

            "Qualified escrow fund" means an escrow arrangement with a federally or State chartered financial institution having no affiliation with any tobacco product manufacturer and having assets of at least $1,000,000,000 where such arrangement requires that such financial institution hold the escrowed funds' principal for the benefit of releasing parties and prohibits the tobacco product manufacturer placing the funds into escrow from using, accessing, or directing the use of the funds' principal except as consistent with subdivision (a)(2)(B) of Section 15 of the Tobacco Product Manufacturers' Escrow Act.

 

            "Tobacco product manufacturer":

 

            means any entity that, after June 30, 1999, directly (and not exclusively through any affiliate):

 

            manufactures cigarettes anywhere that such manufacturer intends to be sold  in  the  United  States, including cigarettes intended to be sold in the United States through an importer (except where such importer is an original participating manufacturer (as that term is defined in the Master Settlement Agreement) that will be responsible for the payments under the Master Settlement Agreement with respect to such cigarettes as a result of the provisions of subsection II(mm) of the Master Settlement Agreement and that pays the taxes specified in subsection II(z) of the Master Settlement Agreement, and provided that the manufacturer of such cigarettes does not market or advertise such cigarettes in the United States);

 

            is the first purchaser anywhere for resale in the United States of cigarettes manufactured anywhere that the manufacturer does not intend to be sold in the United States; or becomes a successor of an entity described in this definition.

 

            does not mean an affiliate of a tobacco product manufacturer unless the affiliate itself falls within this definition.

 

            "Unit sold" means an individual cigarette sold in the State of Illinois by the applicable tobacco product manufacturer (whether directly or through a distributor, retailer, or similar intermediary or intermediaries) during the year in question, as measured by excise taxes collected by the State on packs bearing the excise tax stamp of the State.

 

Section 445.20  Tobacco Product Escrow Reporting Requirements

 

a)         Any tobacco product manufacturer selling cigarettes to consumers within the State of Illinois (whether directly or through a distributor, retailer, or similar intermediary or intermediaries) after June 30, 1999 is required to do one of the following:

 

1)         become a participating manufacturer and generally perform its financial obligations under the Master Settlement Agreement; or

 

2)         place into a qualified escrow fund by April 15 of the year following the year in question the following amounts (as such amounts are adjusted for inflation):

 

A)        For 1999:  $0.0094241 per unit sold after June 30, 1999;

 

B)        For 2000:  $0.0104712 per unit sold;

 

C)        For each of 2001 and 2002:  $0.0136125 per unit sold;

 

D)        For each of 2003 through 2006:  $0.0167539 per unit sold;

 

E)        For each of 2007 and each year thereafter:  $0.0188482.

 

b)         Each tobacco product manufacturer that elects to place funds into escrow shall annually certify to the Attorney General the amount placed into escrow each year on or before April 15.  Such affidavit shall be filed upon forms furnished and prescribed by the Attorney General and contain such other information as the Attorney General may reasonably require.

 

c)         Every distributor who is not a manufacturer of cigarettes shall, on or before the 1st day of March, file a report with the Attorney General, showing the quantity of cigarettes sold bearing Illinois cigarette tax stamps during the preceding calendar year and the name and address of the non-participating manufacturer of the cigarettes sold.  Such report shall be filed upon forms furnished and prescribed by the Attorney General and shall contain such other information as the Attorney General may reasonably require.  Distributors are not required to file this report if the cigarettes sold were manufactured by a participating manufacturer.

 

d)         Every nonparticipating manufacturer of cigarettes shall keep at his licensed address complete and accurate records of cigarettes sold and shall preserve and keep at his licensed address all invoices, bills of lading, sales recorders, copies of bills of sale, inventory at the close of each period for which a report is required and other pertinent papers and documents relating to the manufacture, purchase, sale or disposition of cigarettes.

 

e)         All books and records and other papers and documents that are required to be kept shall be kept in the English language, and shall, at all times during the usual business hours of the day, be subject to inspection by the Office of the Attorney General or its duly authorized agents and employees.