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The new provision clarifies that all TPMs that are not listed on the Directory must submit an initial certification that is governed by the same requirements and review process as its annual certification counterpart. Additionally, NPMs may be refused inclusion or retention on the Arizona Cigarette Directory who: (1) provide incorrect, false or misleading statements on any Certification to the State pursuant to the Escrow Statute or Section 3 of the Directory Statute, or (2) were not or are not in compliance with any State or Federal laws.

Importantly, a TPM’s cigarettes cannot be legally stamped, sold or even possessed for sale in Arizona until after the request to be added to the Directory has been approved by AGO and the addition is reflected on the Directory itself.

Lastly, section 3(a)(2) is amended to clarify that NPMs must conform to sections 3(c) and 6(d) of the Directory Statute until after the Directory modification request is approved by AGO and the alteration is reflected on the Directory that is published on AGO’s website. Further, a violation of this law constitutes a felony. The fact that a Tobacco Product Manufacturer and its Brand Families are listed in the Directory does not mean that they are compliant with other State or federal laws applicable to the sale and/or distribution of Cigarettes.Fourth, HB2674 adds section 3(a)(3)(e) of the Directory Statute to codify that, unless the NPM or its affiliate is a licensed Arizona tobacco distributor, NPMs must certify that all sales or shipments made by the NPM or its affiliates within or into Arizona are made to a tobacco distributor that is licensed in Arizona. § 42-3201, or a retailer ordering from a person so licensed, to order or purchase, or cause to be ordered or purchased, a tobacco product via mail, phone, the Internet, or any electronic means (except for pipe tobacco and cigars). Moreover, a Common Carrier shall not knowingly transport a tobacco product for a person who is in violation of the Delivery Sales Statute. Fifth, HB2674 adds section 3(a)(3)(f) to the Directory Statute. Delivery Sales of Tobacco Products Are Prohibited (Except Pipe Tobacco and Cigars): Pursuant to A. S 36-798.06 ("Delivery Sales Statute") it is unlawful for any person, other than a person licensed under A. Simply put, under this law, Arizona consumers must buy tobacco products in a face-to-face transaction at a retail establishment (except for pipe tobacco and cigars). Finally, section 3(e) is amended to require that NPMs submit its bond certifications as an attachment to an initial, annual, or supplemental certification as required by the Directory Statute. § 44-7101): The most notable change to the Escrow Statute is the change to the “units sold” definition. That are sold by an Indian tribe, or by a federally licensed Indian trader, on an Indian reservation to Indians who are enrolled members of the Indian tribe for whose benefit the Indian reservation was established. The second major change to the Escrow Statute is chaptered at A. The new law allows the State to take possession of the escrowed funds in the event the NPM no longer wishes to maintain the account. First, in certain situations outlined in the new law, the State requires NPMs to post a bond of at least ,000 against which outstanding escrow may be collected in the future. Tenth, HB2674 amends section 3(h) of the Directory Statute to require that all NPMs submit the importer declaration required by section 3(h) as an attachment to an initial, annual, or supplemental certification as required by the Directory Statute. Senate Bill 1312 Changes Regarding the Escrow Statute (A. The new definition, has the effect of classifying as “units sold” most cigarettes (the definition of cigarettes includes RYO) distributed in Arizona, including those on which the state excise tax is fully offset by a tribal tax. 3 That are exempt from tax under 26 United States Code section 5701 and that are distributed according to federal regulations.” Further, “Tribal luxury taxes” is defined as “those taxes referenced in section 42-3302, subsection C.” A. However, until such time as AGO formally agrees to an assignment, the account must remain properly funded and maintained. § 44-7111): The Directory Statute changes are chaptered at A.

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