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June 30, 1999


CHICAGO -- Governor George H. Ryan today signed legislation required to implement Illinois' portion of a landmark legal settlement with tobacco companies, an agreement that is expected to bring $9.1 billion to the state treasury over the next 25 years.

The legislation, authored by Attorney General Jim Ryan, sets up a mechanism that "levels the playing field" between tobacco companies named in the nationwide Master Settlement Agreement and those companies that are not named. The new law requires all manufacturers of cigarettes marketed in Illinois to contribute into a new reserve fund -- a pool of money that will pay for potential health-related costs associated with cigarettes sold in the state.

The new law is required of each state under the Master Settlement Agreement. Without the act in place, Illinois' share of the nationwide settlement could have been reduced by as much as 64 percent, or $5.8 billion.

"This bill will fulfill the state's requirements under the Tobacco Master Settlement Agreement and ensure that all tobacco companies are held accountable for the costs of smoking in Illinois," Ryan said. "I commend Attorney General Ryan for his dedication and support in helping to ensure that Illinois receives its fair share of this settlement."

Senate Bill 1183 establishes a new state reserve fund that will guarantee a source of compensation for tobacco-related health costs. The law prevents those tobacco companies who did not enter into the final agreement between the states and the tobacco industry from avoiding financial liability.

"This law is important because it will prevent tobacco companies not named in the lawsuit from unduly profiting from the terms of the historic settlement," Attorney General Jim Ryan said.

The new law complements the Master Settlement Agreement by ensuring the financial gains outlined in that settlement as well as the long-term health-related goals that sparked the state's legal challenge of the tobacco companies.

Under the new law, it is Illinois' policy that the financial burdens of health-related costs imposed upon the state by cigarette smoking will be shared by all tobacco product manufacturers. Companies that are not included in the master settlement will be required to set aside money in order to guarantee a source of compensation for future judgments or settlements brought against the manufacturers by the state, or any party in the state.


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