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Missouri to lose out on more than $70 million in tobacco settlement dispute

It appears the state is set to lose about $70 million it had coming from the national tobacco settlement.

Attorney General Chris Koster warned legislators in a letter in January that the state could lose a portion of, or all of its share of the settlement because the General Assembly had not passed legislation in the works since before 2003.

In 1998, 46 states, including Missouri, agreed to dismiss pending lawsuits against the nation’s largest tobacco manufacturers for the health care costs associated with tobacco in exchange for perpetual payments to the states from the companies in excess of $6 billion per year. Missouri’s share was 2.27%, or about $130 million a year.

But not all tobacco product producing companies signed on to the larger agreement. Those companies were to make payments into smaller escrow accounts. Two pieces of legislation were drafted for use in enforcing the escrow agreements with the smaller companies, and most states passed them within a couple of years, except Missouri.

One bill was not passed by the Missouri General Assembly until 2010…another is still pending…making Missouri the only one of the original 46 states to not completely comply with the Master Tobacco Settlement.

Earlier this week, a three judge arbitration panel ruled that Missouri failed to diligently enforce state tobacco laws in the year 2003, and docked the state $70 million of its $130 million share of the settlement.

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