RELATES TO: KRS 131.600-131.630.
NECESSITY, FUNCTION, AND CONFORMITY: To promote compliance with
KRS
131.602,
KRS
131.620(2) authorizes the
Attorney General to require nonparticipating tobacco manufacturers to quarterly
certify their compliance with Kentucky's Nonparticipating Tobacco Manufacturers
Act. The Attorney General may also require nonparticipating manufacturers to
make the escrow payments required by
KRS
131.602 in quarterly installments. This
administrative regulation establishes quarterly escrow deposit and
certification requirements for nonparticipating manufacturers.
Section 1. Criteria for Quarterly Escrow
Deposits. The Attorney General may require quarterly escrow deposits and
certifications of nonparticipating manufacturers who meet any of the following
criteria:
(1) No previous escrow deposit.
Nonparticipating manufacturers that have not previously established and funded
a qualified escrow fund in Kentucky;
(2) No escrow deposit for more than one (1)
year. Nonparticipating manufacturers that have not made any escrow deposits for
more than one (1) year;
(3)
Untimely or incomplete deposits. Nonparticipating manufacturers that have
failed to make a timely and complete escrow deposit for any prior calendar
year;
(4) Outstanding judgments.
Nonparticipating manufacturers that have failed to pay any judgment, including
any civil penalty;
(5) Large sales
volume. Nonparticipating manufacturers that have more than 2,500,000 of their
cigarettes sold in Kentucky during a quarter; and
(6) Other reasonable cause. In addition to
the reasons specified above, the Attorney General may require quarterly escrow
deposits from a nonparticipating manufacturer if the Attorney General has
reasonable cause to believe the nonparticipating manufacturer may not make its
full required escrow deposit by April 15 of the year following the year in
which the cigarette sales were made.
Section 2. Deadline for Quarterly Escrow
Deposits. Nonparticipating manufacturers who are required to make quarterly
escrow deposits shall do so no later than thirty (30) days after the end of the
quarter in which the sales are made. For example, the deadline for making a
quarterly escrow deposit for cigarette sales that occurred during the first
quarter of the year (January through March) is April 30 of the same
year.
Section 3. Deadline for
Submitting Quarterly Certification and Notice to Attorney General.
Nonparticipating manufacturers who are required to make quarterly escrow
deposits shall provide the Attorney General with their quarterly certifications
and official notification of the quarterly escrow deposit no later than ten
(10) days after the deadline for which an escrow deposit is required. For
example, the deadline for certifying and officially notifying the Attorney
General of a quarterly escrow deposit for sales of cigarettes that occurred
during the first quarter of the year (January through March) is May 10 of the
same year.
Section 4. Quarterly
Periods Defined. For purposes of this administrative regulation, the calendar
year shall be divided into the following quarters: January 1 through March 31;
April 1 through June 30; July 1 through September 30; and October 1 through
December 31.
Section 5. Notice to
Nonparticipating Manufacturers. Any nonparticipating manufacturer required to
make quarterly escrow deposits and to certify its compliance with this rule
shall be notified of those requirements by first class mail sent to its last
known address.
Section 6.
Decertification. If the required quarterly escrow deposit is not timely made in
full, or the required quarterly certification is not provided to the Attorney
General, or the Attorney General does not receive timely official notice of the
quarterly escrow deposit, the nonparticipating manufacturer and its brand
families may be decertified and removed from Kentucky's Directory of Tobacco
Products Approved for Sale in Kentucky.
