2023 Code of Virginia › Title 3.2 - Agriculture, Animal Care, and Food › Chapter 42 - Implementation of Tobacco Master Settlement Agreement › § 3.2-4206.1. Bond requirement for newly qualified and elevated-risk nonparticipating manufacturers

A. Notwithstanding any other provision of law, if a newly qualified nonparticipating manufacturer is to be listed in the Virginia Tobacco Directory (the Directory), or if the Attorney General reasonably determines that any nonparticipating manufacturer who has filed a certification pursuant to § 3.2-4205 poses an elevated risk for noncompliance with this article or with Article 1 (§ 3.2-4200 et seq.), neither such nonparticipating manufacturer nor any of its brand families shall be included in the Directory unless and until such nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the manufacturer's performance in accordance with § 3.2-4208.1, has posted a bond in accordance with this section.
B. The bond shall be posted by corporate surety located within the United States in an amount equal to the greater of $50,000 or the amount of escrow the manufacturer in either its current or predecessor form was required to deposit as a result of its highest calendar year's sales in Virginia. The bond shall be written in favor of the Commonwealth of Virginia and shall be conditioned on the performance by the nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the manufacturer's performance in accordance with subsection A of § 3.2-4201, of all of its duties and obligations under this article and Article 1 (§ 3.2-4200 et seq.) during the year in which the certification is filed and the next succeeding calendar year.
C. A nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance with this article or Article 1 (§ 3.2-4200 et seq.) if:
1. The nonparticipating manufacturer or any affiliate thereof has underpaid an escrow obligation with respect to any state at any time during the calendar year or within the past three calendar years unless (i) the manufacturer did not make underpayment knowingly or recklessly and the manufacturer promptly cured the underpayment within 180 days of notice of it, or (ii) the underpayment or lack of payment is the subject of a good faith dispute as documented to the satisfaction of the Attorney General and the underpayment is cured within 180 days of entry of a final order establishing the amount of the required escrow payment;
2. Any state has removed the manufacturer or its brands or brand families or an affiliate or any of the affiliate's brands or brand families from the state's tobacco directory for noncompliance with the state law at any time during the calendar year or within the past three calendar years; or
3. Any state has litigation pending against, or an unsatisfied judgment against, the manufacturer or any affiliate thereof for escrow or for penalties, costs, or attorney fees related to noncompliance with state escrow laws.
D. As used in this section "newly qualified nonparticipating manufacturer" means a nonparticipating manufacturer that has not previously been listed in the Virginia Tobacco Directory. Such manufacturers may be required to post a bond in accordance with this section for the first three years of their listing, or longer if they have been determined to pose an elevated risk for noncompliance.
2008, c. 758, § 3.1-336.5:1; 2011, c. 297.