The general assembly hereby finds, determines, and declares:
(a) That cigarette smoking presents serious public health concerns to the
state and to the citizens of the state. The surgeon general has determined
that smoking causes lung cancer, heart disease and other serious diseases,
and that there are hundreds of thousands of tobacco-related deaths in
the United States each year. These diseases most often do not appear until
many years after the person in question begins smoking.
(b) That cigarette smoking also presents serious financial concerns for
the state. Under certain health-care programs, the state may have a legal
obligation to provide medical assistance to eligible persons for health
conditions associated with cigarette smoking, and those persons may have
a legal entitlement to receive such medical assistance.
(c) That under these programs, the state pays millions of dollars each
year to provide medical assistance for these persons for health conditions
associated with cigarette smoking.
(d) That it is the policy of the state that financial burdens imposed on
the state by cigarette smoking be borne by tobacco product manufacturers
rather than by the state to the extent that such manufacturers either
determine to enter into a settlement with the state or are found culpable
by the courts.
(e) That on November 23, 1998, leading United States tobacco product manufacturers
entered into a settlement agreement, entitled the "master settlement
agreement," with the state. The master settlement agreement obligates
these manufacturers, in return for a release of past, present and certain
future claims against them as described therein, to pay substantial sums
to the state, tied in part to their volume of sales; to fund a national
foundation devoted to the interests of public health; and to make substantial
changes in their advertising and marketing practices and corporate culture,
with the intention of reducing underage smoking.
(f) That it would be contrary to the policy of the state if tobacco product
manufacturers who determine not to enter into such a settlement could
use a resulting cost advantage to derive large, short-term profits in
the years before liability may arise without ensuring that the state will
have an eventual source of recovery from them if they are proven to have
acted culpably. It is thus in the interest of the state to require that
such manufacturers establish a reserve fund to guarantee a source of compensation
and to prevent such manufacturers from deriving large, short-term profits
and then becoming judgment-proof before liability may arise.