SB334 Alabama 2014 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Vivian Davis FiguresSenator
Democrat
Co-Sponsors: Arthur Orr Priscilla Dunn Del Marsh William “Bill” M. Beasley Bryan Taylor Dick Brewbaker Tom Whatley Linda Coleman-Madison Quinton Ross Greg J. Reed Mark Slade Blackwell Tammy Irons Phillip W. Williams Gerald H. Allen Rodger Smitherman J.T. Waggoner Bill Holtzclaw Bobby D. Singleton Jimmy Holley Clay Scofield George M. “Marc” Keahey Gerald O. Dial
Session: Regular Session 2014
Title: Tobacco Master Settlement agreement, deposit of funds into escrow, certain cigarette sales included, tobacco importers liable for escrow deposit obligations under certain conditions, seizure and forfeiture of cigarettes under certain conditions, permitting and bond requirements, Secs. 6-12-2, 6-12-3, 6-12A-2, 6-12A-3, 6-12A-5 am'd.
Summary: SB334 updates Alabama's tobacco escrow rules by adding cigarette importers to escrow liability, widening what counts as units sold, and enabling seizure and bonding to enforce compliance.
What This Bill Does
It defines an importer of tobacco products and expands units sold to include cigarettes sold without paying the state cigarette excise tax. It makes importers jointly and severally liable with tobacco product manufacturers for escrow deposits and allows seizure and forfeiture of cigarettes if those deposits are not made. It requires both non-participating manufacturers and importers to appoint agents for service of process, ensures a valid federal permit for non-participating manufacturers, and establishes bond requirements to secure escrow obligations. It also sets up certification and directory rules, plus reporting, monitoring, and enforcement provisions related to escrow funds and brand families.

Who It Affects
Non-participating tobacco product manufacturers: must place funds into escrow, certify compliance, track brand families, and may be subject to bonds, penalties, and enforcement actions.
Cigarette importers: become jointly and severally liable for escrow deposits, may face penalties and seizure/forfeiture if deposits are not made, must obtain appropriate permits and appoint service of process agents.

Key Provisions
Defines importer of tobacco products and expands 'units sold' to include certain untaxed cigarette sales and tax-exempt transactions.
Imposes joint and several liability on importers with manufacturers for required escrow deposits under Section 6-12-3.
Authorizes seizure and forfeiture of cigarettes imported or sold in Alabama when escrow deposits are not deposited as required.
Requires both non-participating manufacturers and importers to appoint agents for service of process and for non-participating manufacturers to hold a valid 26 U.S.C. § 5713 permit; establishes bond requirements for non-participating manufacturers.
Creates a Qualified Escrow Fund framework with inflation-adjusted deposit rates, interest on funds, and specific release rules tied to judgments, overpayments, or time-based reversions.
Enables the Department of Revenue to enforce compliance through certifications, a public directory of compliant manufacturers and brand families, and penalties for noncompliance.
Imposes reporting requirements on wholesalers and distributors, including monthly/quarterly disclosures and five-year record retention.
Provides for potential penalties, including civil fines and suspension of sales, for failures to deposit escrow funds or to comply with the act.

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 Settlement