In 1998, the nation’s leading cigarette manufacturers, including Philip Morris USA, signed the Master Settlement Agreement (MSA) with 46 states, five U.S. territories and the District of Columbia.
The MSA was an historic agreement that imposed significant restrictions on a range of cigarette marketing activities and required the participating manufacturers to make billions of dollars of settlement payments to the states.
Legislation has been a critical element of the MSA. As part of the MSA, the states were encouraged to enact model legislation requiring non-participating manufacturers (NPMs) to make certain payments into an escrow account on each cigarette sold in the state. The purpose of the escrow account is to make funds available to satisfy state claims, such as for health care costs, in the event a state obtains a judgment against an NPM. Although all MSA states enacted this legislation many NPMs were simply not making the required payments. In addition, some NPMs exploit a loophole by withdrawing their escrow deposits in a way that conflicts with the legislation's intent.
To address these issues, the National Association of Attorneys General drafted additional model legislation:
Complementary Enforcement Legislation: This legislation provides enforcement tools to state attorneys general so they can act if NPMs don't make the required escrow payments. These tools include requiring NPMs to report cigarette sales volume; requiring state departments of revenue to publish lists of non-compliant NPMs and their brands; and prohibiting wholesalers and retailers from stamping or selling NPM cigarette brands that do not comply with their escrow obligations.
Allocable Share Legislation: This legislation closes a loophole in the state escrow statutes by preventing NPMs from withdrawing escrow payments in a way that was never contemplated when those statutes were enacted.
PM USA strongly supports the enactment of complementary enforcement and allocable share legislation to support the original purpose and effectiveness of the MSA.
Altria's tobacco operating companies support two websites: