(1) become a participating manufacturer, as that term is defined in
section II(jj) of the Master Settlement Agreement, and perform the generally perform
its financial obligations for participating manufacturers under the Master Settlement
Agreement; or

(2) deposit place into a qualified escrow fund by April 15 of the year after
the year specified in each of items (i) through (v) of this paragraph following the year
in question the following amounts, as such amounts are adjusted for inflation:

(i) for 1999, $.0094241 per unit sold after the effective date date of
enactment of this Act;

(ii) for 2000, $.0104712 per unit sold after the effective date date of
enactment of this Act;

(iii) for each of 2001 and 2002, $.0136125 per unit sold after the
effective date date of enactment of this Act;

(iv) for each of 2003, 2004, 2005, and 2006, $.0167539 per unit sold
after the effective date date of enactment of this Act; and

(v) for 2007 and each year thereafter, $.0188482 per unit sold after
the effective date date of enactment of this Act.

(b) (1) A tobacco product manufacturer that deposits places funds into escrow
in accordance with subsection (a)(2) of this section shall receive the interest or other
appreciation on the funds as earned.

(2) The funds themselves shall be released from escrow only under the
following circumstances:

(i) to pay a judgment or settlement on any released claim brought
against such tobacco product manufacturer by the State or any releasing party
located or residing in the State, provided that funds. Funds shall be released from
escrow under this subparagraph:

1. in the order in which they were placed into escrow; and

2. only to the extent and at the time necessary to make
payments required under the such judgment or settlement; or

(ii) to allow the reversion of excess funds to the tobacco product
manufacturer to the extent that the manufacturer establishes that the amount it was
required to deposit into escrow in a particular year, had the manufacturer been a
participating manufacturer, was greater than the State's allocable share of the total
payments that the manufacturer would have been required to make in that year
under the Master Settlement Agreement, as determined in accordance with section
IX(i)(2) of the Master Settlement Agreement and before any of the adjustments or
effects described in section IX(i)(3) of that Agreement other than the inflation
adjustment.

(ii) to the extent that a tobacco product manufacturer establishes
that the amount it was required to place into escrow in a particular year was greater