Guam § 221201 - Findings and Purpose.

§ 221201. Findings and Purpose.

(a) Cigarette smoking presents serious public health concerns

to the State and to the citizens of the State. 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 the person

in question 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.

(c) Under these programs, the State pays millions of dollars

each year to provide medical assistance for these persons for health

conditions associated with cigarette smoking.

(d) 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.

(e) On November 23, 1998, leading United States tobacco

product manufacturers entered into a settlement agreement, entitled

the “Master Settlement Agreement,” with the State. The Master

Settlement Agreement obligates these manufacturers, in return for

a release of past, present and certain future claims against them as

described therein, to pay substantial sums to the State (tied in part

to their volume of sales); to fund a national foundation devoted to

the interests of public health; and to make substantial changes in

their advertising and marketing practices and corporate culture,

with the intention of reducing underage smoking.

(f) 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,

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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. It is thus 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.