1 South Carolina General Assembly 2 116th Session, 2005-2006 3 4 S. 416 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senators Leatherman, Land, Alexander, Grooms, Matthews, Verdin, Ritchie, Rankin, Williams, 10 Ryberg, Campsen, Setzler, J. Verne Smith, Knotts, Scott, Fair, Mescher, Lourie and Gregory 11 Document Path: l:\council\bills\gjk\20219htc05.doc 12 Companion/Similar bill(s): 3304 13 14 Introduced in the Senate on February 8, 2005 15 Currently residing in the Senate Committee on Finance 16 17 Summary: Tobacco Escrow Fund 18 19 20 HISTORY OF LEGISLATIVE ACTIONS 21 22 Date Body Action Description with journal page number 23 2/8/2005 Senate Introduced and read first time SJ-9 24 2/8/2005 Senate Referred to Committee on Finance SJ-9 25 3/23/2005 Senate Referred to Subcommittee: Hayes (ch), Alexander, Land, Matthews, Grooms, 26 Richardson 27 28 29 VERSIONS OF THIS BILL 30 31 2/8/2005 32 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND TITLE 11, CODE OF LAWS OF SOUTH 12 CAROLINA, 1976, BY ADDING CHAPTER 48 SO AS TO 13 PROVIDE FOR FURTHER ENFORCEMENT OF THE 14 TOBACCO ESCROW FUND ACT, INCLUDING BOTH CIVIL 15 AND CRIMINAL PENALTIES FOR VIOLATIONS, TO 16 AMEND SECTION 11-47-30, RELATING TO THE 17 REQUIREMENT FOR A TOBACCO PRODUCT 18 MANUFACTURER TO EITHER PARTICIPATE IN THE 19 MASTER SETTLEMENT AGREEMENT OR DEPOSIT 20 MONIES INTO A QUALIFIED ESCROW FUND, SO AS TO 21 PROVIDE THAT ESCROW PAYMENTS REQUIRED OF A 22 NONPARTICIPATING TOBACCO PRODUCTS 23 MANUFACTURER AND ANY REFUND OF AN ESCROW 24 OVERPAYMENT BY SUCH A MANUFACTURER ARE 25 BASED ON UNITS SOLD IN THIS STATE COMPARED WITH 26 MASTER SETTLEMENT AGREEMENT PAYMENTS 27 RATHER THAN AN ALLOCABLE SHARE, TO AMEND 28 SECTIONS 11-49-60 AND 11-49-150, RELATING TO THE 29 POWERS OF THE BOARD OF THE TOBACCO SETTLEMENT 30 REVENUE MANAGEMENT AUTHORITY ACT AND THE 31 CONSENT TO AND APPROVED BY THE GENERAL 32 ASSEMBLY TO THE TOBACCO MASTER SETTLEMENT 33 AGREEMENT, SO AS TO DELETE THE REQUIREMENT 34 THAT THE GENERAL ASSEMBLY APPROVE ANY 35 AMENDMENT TO THE AGREEMENT BEFORE THE BOARD 36 MAY APPROVE SUCH AN AMENDMENT AND TO ALLOW 37 THE BOARD OF THE AUTHORITY TO APPROVE SUCH 38 AMENDMENTS ON BEHALF OF THE STATE IF SUCH 39 AMENDMENTS DO NOT DIMINISH THE RIGHTS AND 40 REMEDIES OF THE AUTHORITY AND BONDHOLDERS. 41

1 [416] 1 1 Be it enacted by the General Assembly of the State of South 2 Carolina: 3 4 SECTION 1. A.Title 11 of the 1976 Code is amended by adding: 5 6 “CHAPTER 48 7 8 Tobacco Qualified Escrow Fund Enforcement 9 10 Section 11-48-10. The General Assembly finds that: 11 (1) potential violations of Chapter 47 of this title, The 12 Tobacco Escrow Fund Act, may threaten the integrity of the 13 Tobacco Master Settlement Agreement, the financial interests of 14 the State, and the public health; and 15 (2) enacting procedural enhancements may deter potential 16 violations and promote the enforcement of The Tobacco Escrow 17 Fund Act, safeguard the Master Settlement Agreement, the 18 financial interests of the State, and the public health. 19 20 Section 11-48-20. As used in this chapter: 21 (1) ‘Brand family’ means all styles of cigarettes sold under 22 the same trademark and differentiated from one another by means 23 of additional modifiers or descriptors, including, but not limited to, 24 menthol, lights, kings, and 100s and includes the use of a brand 25 name alone or in conjunction with another word, trademark, logo, 26 symbol, motto, selling message, recognizable pattern of colors, or 27 any other indicia of product identification identical or similar to, or 28 identifiable with, a previously known brand of cigarettes. 29 (2) ‘Cigarette’ has the same meaning as in Section 30 11-47-20(d). 31 (3) ‘Nonparticipating manufacturer’ means a tobacco 32 product manufacturer that is not a participating manufacturer. 33 (4) ‘Participating manufacturer’ has the meaning given that 34 term in Section 11(jj) of the Master Settlement Agreement and all 35 amendments to it. 36 (5) ‘Qualified escrow fund’ has the same meaning as that 37 term is defined in Section 11-47-20(f). 38 (6) ‘Cigarette distributor’ means a person required to pay the 39 tax imposed by Section 12-21-620 or authorized to affix a tax 40 stamp to a cigarette package pursuant to Title 12. 41 (7) ‘Tobacco product manufacturer’ has the same meaning 42 as that term is defined in Section 11-47-20(i).

1 [416] 2 1 (8) ‘Units sold’ has the same meaning as that term is defined 2 in Section 11-47-20(j). 3 4 Section 11-48-30. (A) Each tobacco product manufacturer 5 whose cigarettes are sold in this State, whether directly or through 6 a distributor, retailer, or similar intermediary or intermediaries 7 shall execute and deliver on a form or in the manner prescribed by 8 the Attorney General a certification to the Attorney General no 9 later than the thirtieth day of April each year, certifying under 10 penalty of perjury that, as of the date of this certification, the 11 tobacco product manufacturer either is a participating 12 manufacturer or is in full compliance with Section 11-47-30. 13 (1) A participating manufacturer shall include in its 14 certification a list of its brand families. The participating 15 manufacturer shall update the list thirty days before any addition to 16 or modification of its brand families by executing and delivering a 17 supplemental certification to the Attorney General. 18 (2) A nonparticipating manufacturer shall include in its 19 certification a complete list of all of its brand families: 20 (a) separately listing brand families of cigarettes and the 21 number of units sold for each brand family in the State during the 22 preceding calendar year; 23 (b) listing all of its brand families that have been sold in 24 the State at any time during the current calendar year; 25 (c) indicating by an asterisk a brand family sold in the 26 State during the preceding calendar year that is no longer being 27 sold in the State as of the date of the certification; and 28 (d) identifying by name and address any other 29 manufacturer of the brand families in the preceding or current 30 calendar year. The nonparticipating manufacturer shall update the 31 list thirty days before any addition to or modification of its brand 32 families by executing and delivering a supplemental certification 33 to the Attorney General. 34 (3) In the case of a nonparticipating manufacturer, the 35 certification must certify further that: 36 (a) it is registered to do business in the State or has 37 appointed an agent resident within South Carolina for service of 38 process and provided notice of the appointment; 39 (b) it has established and continues to maintain a qualified 40 escrow fund governed by an executed qualified escrow fund 41 agreement that has been reviewed and approved by the Attorney 42 General;

1 [416] 3 1 (c) it is in full compliance with Section 11-47-30 and this 2 chapter and regulations promulgated pursuant to them; and 3 (d) the following information is accurate and complete: 4 (i) name, address, and telephone number of the 5 financial institution where the nonparticipating manufacturer has 6 established the qualified escrow fund required pursuant to Section 7 11-47-30(b) and its regulations; 8 (ii) the account number of the qualified escrow fund 9 and subaccount number for the State of South Carolina; 10 (iii) amount the nonparticipating manufacturer placed in 11 the qualified escrow fund for cigarettes sold in the State during the 12 preceding calendar year, the date, and amount of each deposit, and 13 evidence or verification considered necessary by the Attorney 14 General to confirm that information; and 15 (iv) amounts of and dates of a withdrawal or transfer of 16 funds the nonparticipating manufacturer made at any time from the 17 qualified escrow fund or from another qualified escrow fund into 18 which it made qualified escrow fund payments pursuant to Section 19 11-47-30(b) and its regulations. 20 (4)(a) A tobacco product manufacturer may not include a 21 brand family in its certification unless: 22 (i) in the case of a participating manufacturer, it 23 affirms that the brand family is to be considered its cigarettes for 24 purposes of calculating its payments under the Master Settlement 25 Agreement for the relevant year, in the volume and shares 26 determined pursuant to the Master Settlement Agreement; and 27 (ii) in the case of a nonparticipating manufacturer, it 28 affirms that the brand family is considered its cigarettes for 29 purposes of Chapter 47 of this title. 30 (b) This item does not limit or otherwise affect the state’s 31 right to maintain that a brand family constitutes cigarettes of a 32 different tobacco product manufacturer for purposes of calculating 33 payments under the Master Settlement Agreement or for purposes 34 of Chapter 47 of this title. 35 (5) The tobacco product manufacturers shall maintain all 36 invoices and documentation of sales and other information relied 37 upon for the certification for a period of five years, unless 38 otherwise required by law to maintain them for a greater period of 39 time. 40 (B) The Attorney General shall develop and make available for 41 public inspection or publish on the office web site a directory 42 listing all tobacco product manufacturers that have provided 43 current and accurate certifications conforming to the requirements

1 [416] 4 1 of subsection (A) and all brand families that are listed in the 2 certifications except: 3 (1) The Attorney General shall not include or retain in the 4 directory the name or brand families of a nonparticipating 5 manufacturer that fails to provide the required certification or 6 whose certification the Attorney General determines is not in 7 compliance with items (2) and (3) of subsection (A), unless the 8 Attorney General determines that the violation is cured to his 9 satisfaction. 10 (2) Neither a tobacco product manufacturer nor brand family 11 may be included or retained in the directory if the Attorney 12 General concludes in the case of a nonparticipating manufacturer 13 that: 14 (a) all qualified escrow fund payments required pursuant 15 to Section 11-47-30(b) for any period for a brand family, whether 16 or not listed by the nonparticipating manufacturer, have not been 17 paid fully into a qualified escrow fund governed by a qualified 18 escrow fund agreement approved by the Attorney General; or 19 (b) all outstanding final judgments, including interest on 20 them, for violations of Section 11-47-30(b) have not been fully 21 satisfied for the brand family and the manufacturer. 22 (3) The Attorney General shall update the directory as 23 necessary to correct mistakes, to add or remove a tobacco product 24 manufacturer or brand families, and to keep the directory in 25 conformity with the requirements of this chapter. 26 (4) A cigarette distributor shall provide and update as 27 necessary an electronic mail address to the Attorney General for 28 the purpose of receiving notifications required by this chapter. 29 (5) Notwithstanding the provisions of items (1) and (2) of 30 this subsection, in the case of a nonparticipating manufacturer who 31 has established a qualified escrow fund account that has been 32 approved by the Attorney General, the manufacturer or its brand 33 families must not be removed from the directory unless the 34 manufacturer has been given at least fourteen days notice of the 35 intended action. For the purposes of this section, notice is 36 considered sufficient if it is sent either electronically to an 37 electronic-mail address or by first class to a postal mailing address 38 provided by the manufacturer in its most recent certification filed 39 pursuant to this section. The notified nonparticipating 40 manufacturer has fourteen days from the receipt of the notice to 41 comply. At the time that the Attorney General sends notice of its 42 intent to remove the manufacturer from the directory, the Attorney 43 General shall post the notice directly.

1 [416] 5 1 (C)(1) It is unlawful for any person to: 2 (a) affix a stamp to a package or other container of 3 cigarettes of a tobacco product manufacturer or brand family not 4 included in the directory if such a stamp is required by law; or 5 (b) sell, offer, acquire, hold, own, possess, transport, 6 import or cause to be imported, for sale in this State cigarettes of a 7 tobacco product manufacturer or brand family not included in the 8 directory, or to import such cigarettes for personal consumption. 9 (2) A person who violates the provisions of item (1) of this 10 subsection engages in an unfair and deceptive trade practice in 11 violation of Chapter 5, Title 39. 12 (3) A person who, with knowledge of the prohibitions 13 provided in item (1) of this section violates the provisions of item 14 (1) of this section, is guilty of a misdemeanor and, upon 15 conviction, must be punished by a fine not to exceed one thousand 16 dollars or imprisoned for not more than one year, or both. Each 17 day a violation occurs constitutes a separate offense. 18 19 Section 11-48-40. (A) A nonresident or foreign 20 nonparticipating manufacturer that has not registered to do 21 business in the State as a foreign corporation or business entity, as 22 a condition precedent to having its brand families listed or retained 23 in the directory, shall appoint and continually engage without 24 interruption the services of an agent in this State to act as agent for 25 the service of process on whom all process and action or 26 proceeding against it concerning or arising out of the enforcement 27 of Chapter 47 of this title, may be served in a manner authorized 28 by law. That service is legal and valid service of process on the 29 nonparticipating manufacturer. The nonparticipating manufacturer 30 shall provide the name, address, phone number, and proof of the 31 appointment and availability of the agent to, and to the satisfaction 32 of the Attorney General. 33 (B) The nonparticipating manufacturer shall provide notice to 34 the Attorney General thirty calendar days before termination of the 35 authority of an agent and proof to the satisfaction of the Attorney 36 General of the appointment of a new agent no fewer than five 37 calendar days before the termination of an existing agent 38 appointment. If an agent terminates an agency appointment, the 39 nonparticipating manufacturer shall notify the Attorney General of 40 the termination within five calendar days and shall include proof to 41 the satisfaction of the Attorney General of the appointment of a 42 new agent.

1 [416] 6 1 (C) A nonparticipating manufacturer whose cigarettes are sold 2 in this State without appointing or designating an agent as required 3 by this section is deemed to have appointed the Secretary of State 4 as the agent and may be proceeded against in courts of this State 5 by service of process upon the Secretary of State; except that, 6 appointment of the Secretary of State as the agent does not satisfy 7 the condition precedent to having its brand families listed or 8 retained in the directory. 9 10 Section 11-48-50. (A) No later than twenty days after the end 11 of each calendar quarter, and more frequently if so directed by the 12 Attorney General, a cigarette distributor shall submit information 13 the Attorney General requires to facilitate compliance with this 14 chapter including, but not limited to, a list by brand family of the 15 total number of cigarettes or in the case of roll-your-own, the 16 equivalent stick count for which the cigarette distributor affixed 17 stamps during the previous calendar quarter or otherwise paid the 18 tax due for the cigarettes. The cigarette distributor shall maintain, 19 and make available to the Attorney General, all invoices and 20 documentation of sales of all nonparticipating manufacturer 21 cigarettes and other information relied upon in reporting to the 22 Attorney General for a period of five years. The distributors also 23 shall provide this information and documentation to the 24 Department of Revenue and any other documentation requested by 25 the Department of Revenue. The Department of Revenue shall 26 process this information as needed by that agency and as needed 27 by the Attorney General for the purposes of this chapter and the 28 Tobacco Escrow Fund Act. 29 (B) The Attorney General may share the information received 30 pursuant to this chapter with other federal, state, or local agencies 31 only for purposes of enforcement of this chapter, Chapter 47 of 32 this title, or corresponding laws of other states. The Attorney 33 General is further authorized to disclose to a cigarette 34 manufacturer any information that has been provided by a tobacco 35 product distributor as required by this act regarding the purchases 36 from that manufacturer. 37 (C) The Attorney General may require at any time from the 38 nonparticipating manufacturer, proof from the financial institution 39 in which the manufacturer has established a qualified escrow fund 40 for the purpose of compliance with Chapter 47 of this title of the 41 amount of money in the qualified escrow fund exclusive of 42 interest, the dates of deposits, and the amounts and dates of all 43 withdrawals from the qualified escrow fund.

1 [416] 7 1 (D) In addition to the information required to be submitted 2 pursuant to Section 11-48-30, the Attorney General may require a 3 cigarette distributor or tobacco product manufacturer to submit 4 additional information including, but not limited to, samples of the 5 packaging or labeling of each brand family, as is necessary to 6 enable the Attorney General to determine if a tobacco product 7 manufacturer is in compliance with this chapter. 8 (E) To promote compliance with the provisions of this chapter, 9 the Attorney General may promulgate regulations requiring a 10 tobacco product manufacturer subject to the requirements of item 11 (2) of Section 11-48-30(A) to make the qualified escrow fund 12 deposits required in quarterly installments during the year in which 13 the sales covered by such deposits are made. The Attorney 14 General may require production of information sufficient to enable 15 the Attorney General to determine the adequacy of the amount of 16 the installment deposit. 17 18 Section 11-48-60. (A) In addition to or instead of another civil 19 or criminal remedy provided by law, upon a determination that a 20 cigarette distributor has violated Section 11-48-30(C) or a 21 regulation promulgated pursuant to it, the Attorney General may 22 cause to be revoked or suspended the license of a cigarette 23 distributor in the manner provided by Sections 12-60-1310 through 24 12-60-1350. Each stamp affixed, should such a stamp be required 25 by law, and each offer to sell cigarettes in violation of Section 26 11-48-30(C) constitutes a separate violation. The Attorney 27 General also may impose a civil penalty for each violation in an 28 amount not to exceed the greater of five times the retail value of 29 the cigarettes or five thousand dollars upon a determination of 30 violation of Section 11-48-30(C). 31 (B) Cigarettes that have been sold, offered, or possessed for 32 sale in this State or imported for personal consumption in this State 33 in a civil or criminal violation of Section 11-48-30(C) are declared 34 contraband, and may be seized pending adjudication of the 35 violation. Upon a determination of violation, the cigarettes are 36 forfeited and must be destroyed. 37 (C) The Attorney General may seek an injunction to restrain a 38 threatened or actual violation of Sections 11-48-30(C)(1), 39 11-48-50(A), or 11-48-50(D) by a cigarette distributor and to 40 compel the cigarette distributor to comply with the sections. In an 41 action brought pursuant to this section, the State may recover the 42 costs of investigation, costs of the action, and reasonable 43 attorney’s fees.

1 [416] 8 1 2 Section 11-48-70. A determination of the Attorney General to 3 not list in, or to remove from, the directory a brand family or 4 tobacco product manufacturer is subject to review in the manner 5 provided pursuant to Article 3, Chapter 23 of Title 1. 6 7 Section 11-48-80. (A) A person must not be issued a license or 8 granted a renewal of a license to act as a cigarette distributor 9 unless the person has certified in writing, under penalty of perjury, 10 that he intends to comply fully with this chapter. 11 (B) For the year 2005, the first report of cigarette distributors 12 required by Section 11-48-50(A) is due thirty days after the 13 effective date of this chapter; the certifications by a tobacco 14 product manufacturer described in Section 11-48-30(A) are due 15 forty-five days after the effective date of this chapter; and the 16 directory described in Section 11-48-30(B) must be published or 17 made available within ninety days after the effective date of this 18 chapter. 19 (C) The Attorney General may promulgate regulations 20 necessary to effect the purposes of this chapter. 21 (D) In any action brought by the State to enforce this chapter, 22 the Office of the Attorney General is entitled to recover the costs 23 of investigation, expert witness fees, costs of the action, and 24 reasonable attorney fees for a successful investigation or action. 25 (E) Unless otherwise expressly provided, the remedies or 26 penalties provided by this chapter are cumulative to each other and 27 to the remedies or penalties available under all other laws of this 28 State. 29 (F) If a court of competent jurisdiction finds that the provisions 30 of this chapter and Chapter 47 conflict and cannot be harmonized, 31 then the provisions of Chapter 47 must control. If any section, 32 paragraph, item, or subitem, sentence, clause, or phrase of this 33 chapter causes Chapter 47 of Title 11 to no longer constitute a 34 Qualifying or Model Statute, as those terms are defined in the 35 Master Settlement Agreement, then that portion of this chapter is 36 invalid. If any section, paragraph, item, subitem, subsubitem, 37 sentence, clause, or phrase of this chapter is held to be invalid, 38 unlawful, or unconstitutional, that decision does not affect the 39 validity of the remaining portions of this chapter or any part of it. 40 41 Section 11-48-90. (A) It is unlawful for a cigarette 42 manufacturer, cigarette importer, cigarette distributor, or cigarette 43 retailer to sell or possess counterfeit cigarettes. A person who

1 [416] 9 1 violates this subsection is guilty of a felony and, upon conviction, 2 must be punished as follows for a: 3 (1) first violation with a total quantity of fewer than two 4 cartons of cigarettes, by a fine of one thousand dollars or five 5 times the retail value of the cigarettes involved, whichever is 6 greater, or imprisonment not to exceed five years, or both; 7 (2) subsequent violation with a total quantity of fewer than 8 two cartons of cigarettes, by a fine of five thousand dollars or five 9 times the retail value of the cigarettes involved, whichever is 10 greater, or imprisonment not to exceed five years, or both the fine 11 and imprisonment, and the revocation by the Department of 12 Revenue of any license required pursuant to Article 5, Chapter 21, 13 of Title 12, held by the cigarette manufacturer, cigarette importer, 14 cigarette distributor, or cigarette retailer; 15 (3) first violation with a total quantity of two cartons of 16 cigarettes or more by a fine of two thousand dollars or five times 17 the retail value of the cigarettes involved, whichever is greater, or 18 imprisonment not to exceed five years, or both; or 19 (4) subsequent violation with a quantity of two cartons of 20 cigarettes or more by a fine of fifty thousand dollars or five times 21 the retail value of the cigarettes involved, whichever is greater, or 22 imprisonment not to exceed five years, or both the fine and 23 imprisonment, and revocation by the Department of Revenue of 24 any license required pursuant to Article 5, Chapter 21, of Title 12 25 held by the cigarette manufacturer, cigarette importer, cigarette 26 distributor, or cigarette retailer license. 27 (B)(1) For purposes of this section, counterfeit cigarettes 28 includes cigarettes with false manufacturing labels or packages of 29 cigarettes bearing counterfeit tax stamps. 30 (2) Counterfeit cigarettes and related machinery encountered 31 by a law enforcement agency in connection with a charged 32 violation of this section are declared contraband and must be 33 seized by the law enforcement agency and held by it pending 34 adjudication of the charges. Upon conviction, the counterfeit 35 cigarettes and related machinery are forfeited and must be 36 destroyed. 37 38 Section 11-48-100. It is unlawful for any person knowingly to 39 violate any provision of this chapter and any regulations 40 promulgated pursuant to this chapter. Where no specific criminal 41 penalty is provided in this chapter, such a violation is a 42 misdemeanor, and upon conviction, the person must be fined not

1 [416] 10 1 more than one thousand dollars or imprisoned for not more than 2 one year, or both. 3 4 Section 11-48-110. This Chapter 48 is intended as an aid to the 5 enforcement of, and not as an amendment or modification to, 6 Chapter 47 of this title. The General Assembly hereby finds and 7 declares that any agreement of the State to enforce Chapter 47 of 8 this title pursuant to the Master Settlement Agreement shall not be 9 modified, varied, amended, supplemented, increased, or extended 10 by the enactment and enforcement of this Chapter 48. Without 11 limiting the generality of the foregoing, the interpretation and the 12 method or degree of enforcement of this Chapter 48 shall not be 13 allowed to serve as evidence that the provisions of Chapter 47 of 14 this title are not being diligently enforced as contemplated by the 15 Master Settlement Agreement.” 16 17 B.Section 11-47-30(b)(2)(B) of the 1976 Code, as added by Act 47 18 of 1999, is amended to read: 19 20 “(B) to the extent that a tobacco product manufacturer 21 establishes that the amount it was required to place into escrow on 22 account of units sold in this State in a particular year was greater 23 than the state’s allocable share of the total payments that such 24 manufacturer would have been required to make in that year under 25 the Master Settlement Agreement (as determined pursuant to 26 section IX(i)(2) of the Master Settlement Agreement, and before 27 any of the adjustments or offsets described in section IX(i)(3) of 28 that agreement other than the Inflation Adjustment) the Master 29 Settlement Agreement payments, as determined pursuant to 30 Section IX(i) of that agreement including after final determination 31 of all adjustments that such manufacturer would have been 32 required to make on account of such units sold had it been a 33 participating manufacturer, the excess shall must be released from 34 escrow and revert back to such tobacco product manufacturer; or” 35 36 C.If any part of the amendment to Section 11-47-30(b)(2)(B) of 37 the 1976 Code made by this section is held by a court of competent 38 jurisdiction to be unconstitutional, then Section 11-47-30(b)(2) of 39 the 1976 Code is deemed to have been amended by deleting 40 subsubitem (B) in its entirety. If thereafter a court of competent 41 jurisdiction holds that Section 11-47-30(b)(2) as then in effect is 42 unconstitutional, then Section 11-47-30(b)(2)(B) of the 1976 Code 43 is deemed to have been amended to the form in which that

1 [416] 11 1 subsubitem existed before its amendment by this section. Neither 2 a holding of unconstitutionality nor the deleting of Section 3 11-47-30(b)(2)(B) as contemplated by this section affects, impairs, 4 or invalidates any other part of Section 11-47-30 on the application 5 of that section to any person or circumstance and the remaining 6 parts of Section 11-47-30 continue in effect. 7 8 SECTION 2. Section 11-49-60(16) of the 1976 Code, as added by 9 Act 387 of 2000, is amended to read: 10 11 “(16) direct the Attorney General of this State to enforce in the 12 name of the State of South Carolina, and if permissible to enforce 13 directly through its own attorneys in the name of the State, the 14 master settlement agreement, but the board may not give any 15 approval of any amendment to the agreement without the approval 16 of the General Assembly. This power is a part of the contractual 17 obligation owed to the holders of any bonds; and” 18 19 SECTION 3. Section 11-49-150 of the 1976 Code, as added by 20 Act 387 of 2000, is amended to read: 21 22 “Section 11-49-150. The General Assembly consents to and 23 approves the master settlement agreement on behalf of this State 24 and all of its agencies, departments, offices, political subdivisions, 25 and other instrumentalities and bodies politic; and no such 26 agencies, departments, offices, political subdivisions, and other 27 instrumentalities or bodies politic of the State shall have any power 28 or authority to bring suit against the participating manufacturers 29 for claims in the nature of those settled by the master settlement 30 agreement. At any time when bonds are outstanding and for one 31 year and one day thereafter, the State must not agree to the 32 amendment of the master settlement agreement without the 33 approval of the authority; during that period, the authority may 34 approve on behalf of the State amendments to the master 35 settlement agreement if such amendments do not diminish the 36 rights and remedies of the authority or the holders or any 37 outstanding bonds. and This restriction on amendment of the 38 master settlement agreement is a part of the covenant with the 39 bondholders.” 40 41 SECTION 4. This act takes effect upon approval by the 42 Governor. 43 ----XX----

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