Section 6-12A-5

Reporting to commissioner; disclosure; escrow fund.

(a) Reporting by wholesalers and distributors. Not later than 20 days after the end of each month, and more frequently if so directed by the commissioner, each wholesaler and distributor shall submit all the information the commissioner requires to facilitate compliance with this chapter, including, but not limited to, a list by brand family of the total number of cigarettes or in the case of roll your own, the equivalent stick count for which the wholesalers and distributors affixed stamps during the previous month or otherwise paid the tax due for any cigarettes. The wholesaler or distributor shall maintain, and make available to the commissioner, all invoices and documentation of sales of all non-participating manufacturer cigarettes and any other information relied upon in reporting to the commissioner for a period of five years.

(b) Disclosure of information. Notwithstanding any other law or rule, including Section 40-2A-10, the commissioner is hereby authorized to disclose, in the commissioner’s discretion, any information received under this chapter, Chapter 12 of this title, or Chapter 25 of Title 40, for purposes of the proper administration of any matter administered by the Department of Revenue, including but not limited to determining compliance with and enforcing this chapter, Chapter 12 of this title and Chapter 25 of Title 40, and in determining the proper amount of any payment, offset, adjustment, or refund pursuant to the Master Settlement Agreement or any agreement related thereto.

(c) Verification of qualified escrow fund. The commissioner may require at any time from the non-participating manufacturer proof, from the financial institution in which the manufacturer has established a qualified escrow fund for the purpose of compliance with Section 6-12-3, of the amount of money in the fund, exclusive of interest, the amount and date of each deposit, and the amount and date of each withdrawal from the fund.

(d) Requests for additional information. In addition to the information required to be submitted herein, the commissioner may require a wholesaler or distributor or tobacco product manufacturer to submit any additional information including, but not limited to, samples of the packaging or labeling of each brand family, as is necessary to determine whether a tobacco product manufacturer is in compliance with this chapter.

(e) Quarterly escrow installments. To promote compliance with this chapter, the commissioner may promulgate regulations requiring a tobacco product manufacturer subject to the requirements of subdivision (2) of subsection (a) of Section 6-12A-3, to make the escrow deposits required in quarterly installments during the year in which the sales covered by the deposits are made. The commissioner may require production of information sufficient to determine the adequacy of the amount of the installment deposit.

(f)(1) A non-participating manufacturer shall post a bond for the benefit of the commissioner, in accordance with this section, which is conditioned that the non-participating manufacturer shall fully comply with the escrow obligations of this chapter.

(2) The bond shall be posted at least 10 days in advance of each calendar quarter as a condition to the non-participating manufacturer and its brand families being included in the state directory for that quarter. The amount of the bond shall be the greater of a. the greatest required escrow amount due from the non-participating manufacturer or its predecessor for any of the 12 preceding calendar quarters or b. $25,000.

(3) If a non-participating manufacturer that posted a bond has failed to make or have made on its behalf deposits equal to the full amount owed for a quarter within 15 days following the due date for the quarter under subsection (e), the commissioner may execute upon the bond in the amount equal to any remaining amount of the escrow due including any applicable penalties or other charges allowable by law. Amounts the commissioner or the state collects on a bond shall be deposited into the General Fund for the benefit of the state and shall reduce the amount of escrow due from that non-participating manufacturer in the dollar amount collected. Escrow obligations above the amount collected on the bond remain due from that non-participating manufacturer and any importer liable as provided in subsection (b) of Section 6-12-3.

(4) The bond required under this subsection must be a good and sufficient bond executed by a surety company licensed and authorized to do business in Alabama and shall be conditioned to pay the escrow requirements as well as any penalties or other charges under this chapter.

(5) The commissioner may promulgate rules necessary to implement this subsection including acceptable forms and types of bonds.

(Act 2003-372, p. 1049, §2; Act 2014-341, p. 1266, §1.)