The multi-state agreement calls for reductions in the settlement payments to the states if the participating manufacturers' combined market share declines. But each state can eliminate the risk of any such payment reductions if it passes a "Qualifying Statute" that neutralizes the cost disadvantage of the participating manufacturers vs. nonparticipating manufacturers. Passing a Qualifying Statute does not automatically increase or decrease the amounts paid to a state, it just protects against a reduction in payments in the event a nonparticipating manufacturer gains market share. Exhibit F to the agreement sets forth a model statute that automatically qualifies as a Qualifying Statute upon passage if it is neither changed nor added to prior to its implementation. The model statute requires nonparticipating manufacturers to make payments into a special escrow account in amounts equal to what they would pay the states if they signed onto the settlement agreement. The escrow amounts can be used only to satisfy any judgments or settlements the states happen to obtain against the nonparticipating manufacturers, and are otherwise returned to the nonparticipating manufacturers 25 years after going into escrow. Back to Top Home Settlement Points: [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13]
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