116 3rd St SE
Cedar Rapids, Iowa 52401
DES MOINES — Iowa Attorney General Tom Miller said Friday Iowa’s share of the 1998 landmark settlement with U.S. tobacco companies has now exceeded $1.36 billion.
Officials within Miller’s office say the Iowa treasury has received an annual transfer payment of about $52.9 million from tobacco companies involved in the multistate Master Settlement Agreement — the largest settlement in U.S. history.
Iowa will continue to receive yearly settlement payments in perpetuity, based on the number of cigarettes sold in the United States. In the last 22 years, Iowa has received more than $1.36 billion in those payments.
“This settlement is nearly a quarter-century old, but our office must diligently monitor and enforce the agreement's provisions every year so Iowa gets its fair share of the settlement,” Miller said in a statement.
About $11.6 million of this year's payment — or 22 percent — will go to the state, according to the AG’s office. The remaining 78 percent will be used principally to pay bondholders who bought bonds issued by the Tobacco Settlement Authority.
State Treasurer Michael Fitzgerald announced Wednesday that Iowa refunded its tobacco settlement bonds this month, resulting in more than $167 million savings for the state over the life of the bonds.
In 1998, Miller and attorneys general of 45 states signed an agreement with the nation’s four largest tobacco companies to settle lawsuits and recover billions of dollars in state health care costs associated with treating smoking-related illnesses.
Since then, several other tobacco companies have signed onto the agreement. The 2020 payment came from 29 companies, including Philip Morris USA, R.J. Reynolds, Santa Fe Natural Tobacco, Vector and Commonwealth Brands.
The central purpose of the Master Settlement Agreement was to reduce smoking, particularly among youth.
The settlement created restrictions on the advertising, marketing and promotion of cigarettes, including a ban on targeting children through advertising.
It also includes prohibitions on outdoor advertising of cigarettes and the advertising of cigarettes in public transit facilities, as well as the use of cigarette brand names on merchandise, and a host of other restrictions.