House File 2109 S-5061 Amend House File 2109, as amended, passed, and 1 reprinted by the House, as follows: 2 1. By striking everything after the enacting clause 3 and inserting: 4 < Section 1. Section 142A.6, subsection 6, paragraph 5 d, Code 2014, is amended to read as follows: 6 d. For the purpose of this subsection , 7 manufacturer, distributor, wholesaler, retailer, and 8 distributing agent mean as defined in section 453A.1 9 or 453A.42 . 10 Sec. 2. Section 232C.4, subsection 3, Code 2014, is 11 amended to read as follows: 12 3. An emancipated minor shall remain subject 13 to voting restrictions under chapter 48A , gambling 14 restrictions under chapter 99B , 99D , 99F , 99G , or 725 , 15 alcohol restrictions under chapter 123 , compulsory 16 attendance requirements under chapter 299 , and 17 cigarette tobacco , tobacco products, simulated smoking 18 devices, and cigarette restrictions under chapter 453A . 19 Sec. 3. Section 321.216C, Code 2014, is amended to 20 read as follows: 21 321.216C Use of driver’s license or nonoperator’s 22 identification card by underage person to obtain 23 cigarettes or tobacco , tobacco products , simulated 24 smoking devices, or cigarettes . 25 A person who is under the age of eighteen, who 26 alters or displays or has in the person’s possession 27 a fictitious or fraudulently altered driver’s license 28 or nonoperator’s identification card and who uses 29 the license or card to violate or attempt to violate 30 section 453A.2, subsection 2 , commits a simple 31 misdemeanor punishable as a scheduled violation under 32 section 805.8A, subsection 4 . The court shall forward 33 a copy of the conviction to the department. 34 Sec. 4. Section 453A.1, subsections 19 and 21, Code 35 2014, are amended to read as follows: 36 19. “Place of business” is construed to mean and 37 include any place where cigarettes or simulated smoking 38 devices are sold or where cigarettes or simulated 39 smoking devices are stored within or without the state 40 of Iowa by the holder of an Iowa permit or kept for the 41 purpose of sale or consumption; or if sold from any 42 vehicle or train, the vehicle or train on which or from 43 which such cigarettes or simulated smoking devices are 44 sold shall constitute a place of business. 45 21. “Retailer” shall mean and include every person 46 in this state who shall sell, distribute, or offer for 47 sale for consumption or possess for the purpose of 48 sale for consumption, cigarettes or simulated smoking 49 devices irrespective of quantity or amount or the 50 -1- HF2109.3290 (3) 85 pf/rj 1/ 10 #1.

number of sales. 1 Sec. 5. Section 453A.1, Code 2014, is amended by 2 adding the following new subsection: 3 NEW SUBSECTION . 23A. “Simulated smoking device” 4 means any product containing or delivering nicotine 5 or any other similar substance intended for human 6 consumption that can be used by a person to simulate 7 smoking including through inhalation of vapor or 8 aerosol from the product. “Simulated smoking device” 9 includes any component part of such product whether or 10 not sold separately. “Simulated smoking device” does 11 not include any product that has been approved by the 12 United States food and drug administration for sale as 13 a tobacco cessation product and is being marketed and 14 sold solely for that approved purpose. 15 Sec. 6. Section 453A.2, subsections 1, 2, 3, and 8, 16 Code 2014, are amended to read as follows: 17 1. A person shall not sell, give, or otherwise 18 supply any tobacco, tobacco products, simulated smoking 19 devices, or cigarettes to any person under eighteen 20 years of age. 21 2. A person under eighteen years of age shall not 22 smoke, use, possess, purchase, or attempt to purchase 23 any tobacco, tobacco products, simulated smoking 24 devices, or cigarettes. 25 3. Possession of cigarettes or tobacco , tobacco 26 products , simulated smoking devices, or cigarettes 27 by an individual under eighteen years of age does 28 not constitute a violation under this section if the 29 individual under eighteen years of age possesses the 30 cigarettes or tobacco , tobacco products , simulated 31 smoking devices, or cigarettes as part of the 32 individual’s employment and the individual is employed 33 by a person who holds a valid permit under this chapter 34 or who lawfully offers for sale or sells cigarettes or 35 tobacco , tobacco products , simulated smoking devices, 36 or cigarettes . 37 8. a. A person shall not be guilty of a violation 38 of this section if conduct that would otherwise 39 constitute a violation is performed to assess 40 compliance with cigarette and tobacco , tobacco 41 products , simulated smoking devices, or cigarette laws 42 if any of the following applies: 43 (1) The compliance effort is conducted by or under 44 the supervision of law enforcement officers. 45 (2) The compliance effort is conducted with the 46 advance knowledge of law enforcement officers and 47 reasonable measures are adopted by those conducting the 48 effort to ensure that use of cigarettes or tobacco , 49 tobacco products , simulated smoking devices, or 50 -2- HF2109.3290 (3) 85 pf/rj 2/ 10

cigarettes by individuals under eighteen years of age 1 does not result from participation by any individual 2 under eighteen years of age in the compliance effort. 3 b. For the purposes of this subsection , “law 4 enforcement officer” means a peace officer as defined 5 in section 801.4 and includes persons designated under 6 subsection 4 to enforce this section . 7 Sec. 7. Section 453A.4, subsection 1, Code 2014, is 8 amended to read as follows: 9 1. If a person holding a permit under this chapter 10 or an employee of such a permittee has a reasonable 11 belief based on factual evidence that a driver’s 12 license as defined in section 321.1, subsection 13 20A, or nonoperator’s identification card issued 14 pursuant to section 321.190 offered by a person who 15 wishes to purchase cigarettes or tobacco , tobacco 16 products , simulated smoking devices, or cigarettes is 17 altered or falsified or belongs to another person, 18 the permittee or employee may retain the driver’s 19 license or nonoperator’s identification card. Within 20 twenty-four hours, the card shall be delivered to the 21 appropriate city or county law enforcement agency of 22 the jurisdiction in which the permittee’s premises are 23 located, and the permittee shall file a written report 24 of the circumstances under which the card was retained. 25 The local law enforcement agency may investigate 26 whether a violation of section 321.216 , 321.216A , or 27 321.216C has occurred. If an investigation is not 28 initiated or probable cause is not established by the 29 local law enforcement agency, the driver’s license or 30 nonoperator’s identification card shall be delivered 31 to the person to whom it was issued. The local law 32 enforcement agency may forward the card with the 33 report to the state department of transportation for 34 investigation, in which case, the state department of 35 transportation may investigate whether a violation of 36 section 321.216 , 321.216A , or 321.216C has occurred. 37 The state department of transportation shall return 38 the card to the person to whom it was issued if an 39 investigation is not initiated or probable cause is not 40 established. 41 Sec. 8. Section 453A.5, subsection 1, Code 2014, is 42 amended to read as follows: 43 1. The alcoholic beverages division of the 44 department of commerce shall develop a tobacco 45 compliance employee training program not to exceed 46 two hours in length for employees and prospective 47 employees of retailers, as defined in sections 453A.1 48 and 453A.42 , to inform the employees about state and 49 federal laws and regulations regarding the sale of 50 -3- HF2109.3290 (3) 85 pf/rj 3/ 10

cigarettes and tobacco , tobacco products , simulated 1 smoking devices, and cigarettes to persons under 2 eighteen years of age and compliance with and the 3 importance of laws regarding the sale of cigarettes and 4 tobacco , tobacco products , simulated smoking devices, 5 and cigarettes to persons under eighteen years of age. 6 Sec. 9. Section 453A.13, subsection 1, Code 2014, 7 is amended to read as follows: 8 1. Permits required. Every distributor, 9 wholesaler, cigarette vendor, and retailer, now engaged 10 or who desires to become engaged in the sale or use of 11 cigarettes, upon which a tax is required to be paid, 12 and every retailer now engaged or who desires to become 13 engaged in selling, offering for sale, or distributing 14 simulated smoking devices shall obtain a state or 15 retail cigarette permit as a distributor, wholesaler, 16 cigarette vendor, or retailer, as the case may be. 17 Sec. 10. Section 453A.13, subsection 2, paragraph 18 a, Code 2014, is amended to read as follows: 19 a. The department shall issue state permits to 20 distributors, wholesalers, and cigarette vendors 21 subject to the conditions provided in this division . 22 Cities may issue retail permits to dealers retailers 23 within their respective limits. County boards of 24 supervisors may issue retail permits to dealers 25 retailers in their respective counties, outside of the 26 corporate limits of cities. 27 Sec. 11. Section 453A.13, subsections 6, 9, and 10, 28 Code 2014, are amended to read as follows: 29 6. No sales without permit. No A distributor, 30 wholesaler, cigarette vendor, or retailer shall not 31 sell any cigarettes or simulated smoking devices until 32 such application has been filed and the fee prescribed 33 paid for a permit and until such permit is obtained and 34 only while such permit is unrevoked and unexpired. 35 9. Permit —— form and contents. Each permit issued 36 shall describe clearly the place of business for which 37 it is issued, shall be nonassignable, consecutively 38 numbered, designating the kind of permit, and shall 39 authorize the sale of cigarettes or simulated smoking 40 devices in this state subject to the limitations and 41 restrictions herein contained. The retail permits 42 shall be upon forms furnished by the department or on 43 forms made available or approved by the department. 44 10. Permit displayed. The permit shall, at all 45 times, be publicly displayed by the distributor, 46 wholesaler, or retailer at the place of business so 47 as to be easily seen by the public and the persons 48 authorized to inspect the place of business. The 49 proprietor or keeper of any building or place where 50 -4- HF2109.3290 (3) 85 pf/rj 4/ 10

cigarettes and other , simulated smoking devices, or 1 tobacco products are kept for sale, or with intent to 2 sell, shall upon request of any agent of the department 3 or any peace officer exhibit the permit. A refusal or 4 failure to exhibit the permit is prima facie evidence 5 that the cigarettes , simulated smoking devices, 6 tobacco, or other tobacco products are kept for sale or 7 with intent to sell in violation of this division . 8 Sec. 12. Section 453A.15, subsection 4, Code 2014, 9 is amended to read as follows: 10 4. Every permit holder or other person shall, when 11 requested by the department, make additional reports as 12 the department deems necessary and proper and shall at 13 the request of the department furnish full and complete 14 information pertaining to any transaction of the permit 15 holder or other person involving the purchase or sale 16 or use of cigarettes or simulated smoking devices, or 17 the purchase of cigarette stamps. 18 Sec. 13. Section 453A.36, subsections 6, 7, and 11, 19 Code 2014, are amended to read as follows: 20 6. Any sales of cigarettes or tobacco , tobacco 21 products , simulated smoking devices, or cigarettes 22 made through a cigarette vending machine are subject 23 to rules and penalties relative to retail sales of 24 cigarettes and tobacco , tobacco products , simulated 25 smoking devices, and cigarettes provided for in this 26 chapter . Cigarettes shall not be sold through any 27 cigarette vending machine unless the cigarettes have 28 been properly stamped or metered as provided by this 29 division , and in case of violation of this provision, 30 the permit of the dealer authorizing retail sales of 31 cigarettes shall be revoked. Payment of the permit fee 32 as provided in section 453A.13 authorizes a cigarette 33 vendor to sell cigarettes or tobacco , tobacco products , 34 simulated smoking devices, and cigarettes through 35 vending machines. However, cigarettes or tobacco , 36 tobacco products , simulated smoking devices, and 37 cigarettes shall not be sold through a vending machine 38 unless the vending machine is located in a place 39 where the retailer ensures that no person younger than 40 eighteen years of age is present or permitted to enter 41 at any time. Cigarettes or Tobacco, tobacco products , 42 simulated smoking devices, and cigarettes shall not 43 be sold through any cigarette vending machine if 44 such products are placed together with any nontobacco 45 product, other than matches, in the cigarette vending 46 machine. This section does not require a retail permit 47 holder to buy a cigarette vendor’s permit if the retail 48 permit holder is in fact the owner of the cigarette 49 vending machines and the machines are operated in the 50 -5- HF2109.3290 (3) 85 pf/rj 5/ 10

location described in the retail permit. 1 7. a. It shall be unlawful for a person other than 2 a holder of a retailer as defined in section 453A.1 3 or 453A.42 who holds a valid retail permit to sell 4 tobacco, tobacco products, simulated smoking devices, 5 or cigarettes at retail. 6 b. No A state permit holder shall not sell or 7 distribute cigarettes at wholesale to any person in the 8 state of Iowa who does not hold a permit authorizing 9 the retail sale of cigarettes or who does not hold a 10 state permit as a manufacturer, distributing agent, 11 wholesaler, or distributor. 12 11. Violation of this section by the holder 13 of a retailer’s, distributor’s, wholesaler’s or 14 manufacturer’s permit shall be grounds for the 15 revocation of such permit. 16 Sec. 14. Section 453A.36A, subsection 1, Code 2014, 17 is amended to read as follows: 18 1. Beginning January 1, 1999, except Except as 19 provided in section 453A.36, subsection 6 , a retailer 20 shall not sell or offer for sale cigarettes or tobacco , 21 tobacco products, in a quantity of less than a carton, 22 simulated smoking devices, or cigarettes through the 23 use of a self-service display. 24 Sec. 15. Section 453A.39, Code 2014, is amended to 25 read as follows: 26 453A.39 Tobacco product , tobacco products, simulated 27 smoking devices, and cigarette samples —— restrictions 28 —— administration. 29 1. A manufacturer, distributor, wholesaler, 30 retailer, or distributing agent, or agent thereof, 31 shall not give away cigarettes or tobacco , tobacco 32 products , simulated smoking devices, or cigarettes 33 at any time in connection with the manufacturer’s, 34 distributor’s, wholesaler’s, retailer’s, or 35 distributing agent’s business or for promotion of the 36 business or product, except as provided in subsection 37 2 . 38 2. a. All cigarette samples shall be shipped only 39 to a distributor that has a permit to stamp cigarettes 40 or little cigars with Iowa tax. All cigarette samples 41 must have a cigarette stamp. The manufacturer shipping 42 samples under this section shall send an affidavit 43 to the director stating the shipment information, 44 including the date shipped, quantity, and to whom 45 the samples were shipped. The distributor receiving 46 the shipment shall send an affidavit to the director 47 stating the shipment information, including the date 48 shipped, quantity, and from whom the samples were 49 shipped. These affidavits shall be duly notarized and 50 -6- HF2109.3290 (3) 85 pf/rj 6/ 10

submitted to the director at the time of shipment and 1 receipt of the samples. The distributor shall pay the 2 tax on samples by separate remittance along with the 3 affidavit. 4 b. A manufacturer, distributor, wholesaler, 5 retailer, or distributing agent or agent thereof 6 shall not give away any cigarettes or tobacco , tobacco 7 products , simulated smoking devices, or cigarettes 8 to any person under eighteen years of age, or within 9 five hundred feet of any playground, school, high 10 school, or other facility when such facility is being 11 used primarily by persons under age eighteen for 12 recreational, educational, or other purposes. 13 c. Proof of age shall be required if a reasonable 14 person could conclude on the basis of outward 15 appearance that a prospective recipient of a sample may 16 be under eighteen years of age. 17 Sec. 16. Section 453A.42, subsections 1, 2, 8, 9, 18 10, 11, 13, and 16, Code 2014, are amended to read as 19 follows: 20 1. “Business” means any trade, occupation, 21 activity, or enterprise engaged in for the purpose of 22 selling or distributing tobacco , tobacco products , or 23 simulated smoking devices in this state. 24 2. “Consumer” means any person who has title 25 to or possession of tobacco , tobacco products , or 26 simulated smoking devices in storage, for use or other 27 consumption in this state. 28 8. “Place of business” means any place where 29 tobacco , tobacco products , or simulated smoking 30 devices are sold or where tobacco , tobacco products , or 31 simulated smoking devices are manufactured, stored, or 32 kept for the purpose of sale or consumption, including 33 any vessel, vehicle, airplane, train, or vending 34 machine. 35 9. “Retail outlet” means each place of business 36 from which tobacco , tobacco products , or simulated 37 smoking devices are sold to consumers. 38 10. “Retailer” means any person engaged in the 39 business of selling tobacco , tobacco products , or 40 simulated smoking devices to ultimate consumers. 41 11. “Sale” means any transfer, exchange, or barter, 42 in any manner or by any means whatsoever, for a 43 consideration, and includes and means all sales made by 44 any person. It includes a gift by a person engaged in 45 the business of selling tobacco, tobacco products, or 46 simulated smoking devices for advertising, as a means 47 of evading the provisions of this division , or for any 48 other purposes whatsoever. 49 13. “Storage” means any keeping or retention of 50 -7- HF2109.3290 (3) 85 pf/rj 7/ 10

tobacco , tobacco products , or simulated smoking devices 1 for use or consumption in this state. 2 16. “Use” means the exercise of any right or 3 power incidental to the ownership of tobacco , tobacco 4 products , or simulated smoking devices . 5 Sec. 17. Section 453A.45, subsection 3, Code 2014, 6 is amended to read as follows: 7 3. Every retailer and subjobber shall procure 8 itemized invoices of all tobacco , tobacco products , 9 and simulated smoking devices purchased. The invoices 10 shall show the name and address of the seller and the 11 date of purchase. The retailer and subjobber shall 12 preserve a legible copy of each invoice for three years 13 from the date of purchase. Invoices shall be available 14 for inspection by the director or the director’s 15 authorized agents or employees at the retailer’s or 16 subjobber’s place of business. 17 Sec. 18. Section 453A.47A, subsections 1, 2, 4, 5, 18 and 10, Code 2014, are amended to read as follows: 19 1. Permits required. A person shall not engage 20 in the business of a retailer of tobacco , tobacco 21 products , or simulated smoking devices at any place of 22 business without first having received a permit as a 23 tobacco products retailer. 24 2. No sales without permit. A retailer shall 25 not sell any tobacco , tobacco products , or simulated 26 smoking devices until an application has been filed and 27 the fee prescribed paid for a permit and until such 28 permit is obtained and only while such permit is not 29 suspended, unrevoked, or unexpired. 30 4. Retailer —— cigarettes and tobacco , tobacco 31 products , and simulated smoking devices . A retailer, 32 as defined in section 453A.1 , who holds a permit under 33 division I of this chapter is not required to also 34 obtain a retail permit under this division . However, 35 if a retailer, as defined in section 453A.1 , only holds 36 a permit under division I of this chapter and that 37 permit is suspended, revoked, or expired, the retailer 38 shall not sell any cigarettes or tobacco , tobacco 39 products , or simulated smoking devices during the time 40 which the permit is suspended, revoked, or expired. 41 5. Separate permit. A separate retail permit 42 shall be required of a distributor or subjobber if 43 the distributor or subjobber sells tobacco , tobacco 44 products , or simulated smoking devices at retail. 45 10. Records and reports of retailers. 46 a. The director shall prescribe the forms necessary 47 for the efficient administration of this section 48 and may require uniform books and records to be used 49 and kept by each retailer or other person as deemed 50 -8- HF2109.3290 (3) 85 pf/rj 8/ 10

necessary. 1 b. Every retailer shall, when requested by the 2 department, make additional reports as the department 3 deems necessary and proper and shall at the request of 4 the department furnish full and complete information 5 pertaining to any transaction of the retailer involving 6 the purchase or sale or use of tobacco , tobacco 7 products , or simulated smoking devices . 8 Sec. 19. Section 805.8C, subsection 3, Code 2014, 9 is amended to read as follows: 10 3. Smoking violations Violations related to smoking, 11 tobacco, tobacco products, simulated smoking devices, 12 and cigarettes . 13 a. For violations described in section 142D.9, 14 subsection 1 , the scheduled fine is fifty dollars, 15 and is a civil penalty, and the criminal penalty 16 surcharge under section 911.1 shall not be added to 17 the penalty, and the court costs pursuant to section 18 805.9, subsection 6 , shall not be imposed. If the 19 civil penalty assessed for a violation described in 20 section 142D.9, subsection 1 , is not paid in a timely 21 manner, a citation shall be issued for the violation 22 in the manner provided in section 804.1 . However, a 23 person under age eighteen shall not be detained in a 24 secure facility for failure to pay the civil penalty. 25 The complainant shall not be charged a filing fee. 26 b. For violations of section 453A.2, subsection 1 , 27 by an employee of a retailer, the scheduled fine is as 28 follows: 29 (1) If the violation is a first offense, the 30 scheduled fine is one hundred dollars. 31 (2) If the violation is a second offense, the 32 scheduled fine is two hundred fifty dollars. 33 (3) If the violation is a third or subsequent 34 offense, the scheduled fine is five hundred dollars. 35 c. For violations of section 453A.2, subsection 36 2 , the scheduled fine is as follows and is a civil 37 penalty, and the criminal penalty surcharge under 38 section 911.1 shall not be added to the penalty, and 39 the court costs pursuant to section 805.9, subsection 40 6 , shall not be imposed: 41 (1) If the violation is a first offense, the 42 scheduled fine is fifty dollars. 43 (2) If the violation is a second offense, the 44 scheduled fine is one hundred dollars. 45 (3) If the violation is a third or subsequent 46 offense, the scheduled fine is two hundred fifty 47 dollars. 48 Sec. 20. APPLICATION TO EXISTING PRODUCTS. Nothing 49 in this Act shall be construed to prohibit the 50 -9- HF2109.3290 (3) 85 pf/rj 9/ 10

department of revenue from collecting taxes imposed 1 on cigarettes or tobacco products subject to taxation 2 under chapter 453A prior to July 1, 2014. 3 Sec. 21. CODE EDITOR DIRECTIVE. The Code 4 editor shall modify the title of chapter 453A to 5 read “Cigarette and Tobacco Taxes and Regulation of 6 Simulated Smoking Devices”. > 7 2. Title page, lines 1 and 2, by striking < vapor 8 products and alternative nicotine products > and 9 inserting < simulated smoking devices > 10 ______________________________ COMMITTEE ON HUMAN RESOURCES AMANDA RAGAN, CHAIRPERSON -10- HF2109.3290 (3) 85 pf/rj 10/ 10 #2.