HB449 Alabama 2014 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

Regular Session 2014

Title

Tobacco tax, Master Settlement Agreement, certain definitions added and changed, to provide jointly and severally liability for importers as manufacturers for escrow deposits, seizure and forfeiture of cigarettes for failure to make escrow deposits, agents appointed for service of process, permit for nonparticipating manufacturer, Secs. 6-12-2, 6-12-3, 6-12A-2, 6-12A-3, 6-12A-5 am'd.

Summary

HB449 creates a shared escrow and enforcement system for cigarette payments tied to the Master Settlement Agreement, defining importers and expanding units sold, with potential seizure of cigarettes for non-compliance.

What This Bill Does

It defines who is an importer and expands what counts as units sold for tax and escrow purposes; it requires both non-participating manufacturers and importers to place escrow funds into a qualified escrow fund and makes them jointly and severally liable for those deposits. It allows seizure and forfeiture of cigarettes if escrow deposits are not made, and requires both non-participating manufacturers and importers to appoint agents for service of process, with non-participating manufacturers needing a valid federal permit under 26 U.S.C. § 5713 and bond requirements. It creates a certification and public directory system for manufacturers and brand families, with reporting requirements, potential penalties, and rules governing delisting and sale of non-listed brands.

Who It Affects

• Non-participating tobacco product manufacturers (NPM): must place required escrow funds, certify brand families, maintain escrow arrangements and bonds, and face penalties or delisting if non-compliant.
• Importers of cigarettes: jointly and severally liable for escrow deposits, may be sued for escrow noncompliance, and face seizure of all cigarettes imported if they fail to deposit after demand.
• Wholesalers, stamping agents, and distributors: must report monthly to the Department of Revenue, maintain records, and be notified of changes to the directory of compliant brands.
• State regulatory and enforcement bodies (Alabama Department of Revenue and Attorney General): responsible for enforcing escrow payments, bonds, directory compliance, and applying penalties.

Key Provisions

• Defines importer and expands units sold to include certain untaxed or non-taxed cigarette sales, tying these to Master Settlement Agreement obligations.
• Requires non-participating manufacturers and importers to place payments into a qualified escrow fund; sets inflation-adjusted per-unit escrow amounts and schedule (starting 1999 and continuing thereafter).
• Establishes joint and several liability of importers with manufacturers for escrow deposits and authorizes seizure/forfeiture of cigarettes if deposits are not made; allows penalties and civil actions for noncompliance.
• Requires both non-participating manufacturers and importers to appoint agents for service of process and requires the non-participating manufacturer to hold a valid 26 U.S.C. § 5713 permit; imposes bond requirements for non-participating manufacturers.
• Creates certification and directory requirements: manufacturers must certify status and brand families; the directory lists compliant brands and may delist noncompliant ones with notice and sell-off timelines.
• Imposes reporting and disclosure rules: wholesalers/distributors must report monthly, maintain records for five years, and the commissioner may disclose information for enforcement purposes; establishes penalties for late or improper escrow deposits and outlines bond enforcement and potential suspension penalties.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Tobacco Products