HB 1274 Summary

• Redefines "units sold" for escrow deposit purposes to include all cigarettes sold in North Dakota based on state excise taxes collected, excluding only those exempt from state excise tax under federal law.

• Allows tobacco product manufacturers to make irrevocable assignments of their escrow account interests to the state, with assigned funds deposited into the general fund and credited dollar-for-dollar against any future judgments or settlements.

• Establishes sell-through periods after removal from the directory: retailers have 20 days to sell or send cigarettes outside state borders, and in-state distributors have 30 days; out-of-state distributors cannot sell removed products.

• Shifts burden to nonparticipating manufacturers to prove sales are exempt from state excise tax under federal law in order to avoid escrow deposit requirements, requiring submission of supporting documentation to the attorney general.

• Imposes civil penalties up to 500 percent of retail value or $5,000 (whichever is greater) for each violation of directory requirements, with provisions for license revocation and criminal penalties for knowing distribution of unlisted cigarettes.