§ 1912. Findings and purpose
(a) Cigarette smoking presents serious public health concerns to the State of Vermont
and to the citizens of Vermont. 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 a person begins smoking.
(b) 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. Under these
programs, the State pays millions of dollars each year to provide medical assistance
to these persons for health conditions associated with cigarette smoking.
(c) 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.
(d) On November 23, 1998, leading U.S. tobacco product manufacturers entered into a settlement
agreement, entitled the “Master Settlement Agreement,” with the State. In return for
a release of past, present, and certain future claims against these manufacturers
as described therein, the Master Settlement Agreement obligates these manufacturers
to:
(1) pay substantial sums to the State, tied in part to their volume of sales;
(2) fund a national foundation devoted to the interests of public health; and
(3) make substantial changes in their advertising and marketing practices and corporate
culture, with the intention of reducing underage smoking.
(e) 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. Consequently, it is 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. (Added 1999, No. 130 (Adj. Sess.), § 1, eff. May 12, 2000.)