Senate File 2402 S-5181 Amend Senate File 2402 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < Section 1. Section 453A.19, Code 2024, is amended by adding 4 the following new subsection: 5 NEW SUBSECTION . 5. For the purpose of enabling the 6 department to determine compliance with subchapter III, the 7 department shall have the right to inspect any premises of the 8 holder of an Iowa permit located within the state of Iowa where 9 vapor products are stored, transported, sold, or offered for 10 sale or exchanged, to examine all stocks of vapor products of 11 the permit holder, and to examine all of the records required 12 to be kept or any other records that may be kept incident to 13 the conduct of the vapor products business of the permit holder 14 or any other person dealing in vapor products. It shall be 15 unlawful for any such permit holder to fail to produce upon 16 demand of the department any records required to be kept, or to 17 hinder or prevent in any manner the inspection of the records 18 or the examination of the premises or stock as specified in 19 this subsection. 20 Sec. 2. Section 453A.35, subsection 1, paragraph b, Code 21 2024, is amended to read as follows: 22 b. The revenues generated from the tax on cigarettes 23 pursuant to section 453A.6, subsection 1 , and from the tax on 24 tobacco products as specified in section 453A.43, subsections 25 1, 2, 3, and 4 , and from the fees and penalties specified in 26 subchapter III shall be credited to the health care trust fund 27 created in section 453A.35A . 28 Sec. 3. Section 453A.35A, Code 2024, is amended to read as 29 follows: 30 453A.35A Health care trust fund. 31 1. A health care trust fund is created in the office of 32 the treasurer of state. The fund consists of the revenues 33 generated from the tax on cigarettes pursuant to section 34 453A.6, subsection 1 , and from the tax on tobacco products 35 -1- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 1/ 9 #1.

as specified in section 453A.43, subsections 1, 2, 3, and 4 , 1 and from the fees and penalties specified in subchapter III, 2 that are credited to the health care trust fund, annually, 3 pursuant to section 453A.35 . Moneys in the fund shall be 4 separate from the general fund of the state and shall not be 5 considered part of the general fund of the state. However, the 6 fund shall be considered a special account for the purposes 7 of section 8.53 relating to generally accepted accounting 8 principles. Moneys in the fund shall be used only as specified 9 in this section and shall be appropriated only for the uses 10 specified. Moneys in the fund are not subject to section 8.33 11 and shall not be transferred, used, obligated, appropriated, 12 or otherwise encumbered, except as provided in this section . 13 Notwithstanding section 12C.7, subsection 2 , interest or 14 earnings on moneys deposited in the fund shall be credited to 15 the fund. 16 2. Moneys in the fund shall be used only for purposes 17 related to health care, substance use disorder treatment and 18 prevention, and tobacco use prevention, cessation, and control , 19 including but not limited to the administration and enforcement 20 of subchapter III . 21 Sec. 4. NEW SECTION . 453A.52 Vapor products directory —— 22 established —— requirements. 23 1. By August 1, annually, following the date the director 24 first makes the vapor products directory available as specified 25 in section 453A.52A, every vapor products manufacturer where 26 vapor products are sold in the state, whether directly or 27 through a distributor, wholesaler, retailer, or similar 28 intermediary or intermediaries, shall certify under penalty of 29 perjury on a form and in the manner prescribed by the director, 30 that the vapor products manufacturer agrees to comply with this 31 subchapter and to one of the following: 32 a. That the vapor products manufacturer has received a 33 marketing authorization or similar order for the vapor product 34 from the United States food and drug administration pursuant 35 -2- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 2/ 9 #1.

to 21 U.S.C. §387j. 1 b. That the vapor product was marketed in the United 2 States as of August 8, 2016, the vapor products manufacturer 3 submitted a premarket tobacco product application for the vapor 4 product to the United States food and drug administration 5 pursuant to 21 U.S.C. §387j on or before September 9, 2020, 6 and the application either remains under review by the United 7 States food and drug administration or a final decision on the 8 application has not otherwise taken effect. 9 2. A vapor products manufacturer shall submit a 10 certification form that separately lists each of the vapor 11 products manufacturer’s vapor products sold in this state. 12 3. Each initial and annual certification form required to 13 be submitted under this section shall be accompanied by both 14 of the following: 15 a. A copy of the marketing authorization or other order 16 for each vapor product issued by the United States food and 17 drug administration pursuant to 21 U.S.C. §387j, or evidence 18 that the premarket tobacco product application for each vapor 19 product was submitted to the United States food and drug 20 administration and a final authorization or order has not yet 21 taken effect. 22 b. A payment of one hundred dollars for each vapor product 23 listed in the certification. 24 4. A vapor products manufacturer required to submit a 25 certification form under this section shall notify the director 26 within thirty business days of any material change to the 27 certification form, including the issuance or denial of a 28 marketing authorization or other order by the United States 29 food and drug administration pursuant to 21 U.S.C. §387j, or 30 any other order or action by the United States food and drug 31 administration that affects the authorization of the vapor 32 product to be introduced or delivered into interstate commerce 33 for commercial distribution in the United States. 34 5. a. The director shall maintain and make publicly 35 -3- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 3/ 9

available a vapor products directory that lists all 1 vapor products manufacturers and vapor products for which 2 certification forms have been submitted. 3 b. The director shall make the directory available on the 4 department’s internet site. 5 c. The director shall update the directory as necessary in 6 order to correct mistakes, ensure accuracy, and add or remove 7 vapor products on at least a monthly basis. 8 d. The director shall notify each retailer, distributor, and 9 wholesaler of any change to the directory on at least a monthly 10 basis via electronic communication. 11 6. a. The director shall provide a vapor products 12 manufacturer with notice and an opportunity to cure 13 deficiencies before removing the vapor products manufacturer or 14 a vapor product from the directory. 15 b. The director shall not remove a vapor products 16 manufacturer or the vapor products manufacturer’s vapor product 17 from the directory until at least fifteen business days after 18 the vapor products manufacturer has been given notice of an 19 intended action. Notice shall be sufficient and be deemed 20 immediately received by a vapor products manufacturer if the 21 notice is sent either electronically or by facsimile to an 22 electronic mail address or facsimile number, as applicable, 23 provided by the vapor products manufacturer in the vapor 24 products manufacturer’s most recent certification filed under 25 this section. 26 c. The vapor products manufacturer shall have fifteen 27 business days from the date of service of the notice of 28 intended action to establish that the vapor products 29 manufacturer or the vapor product should be included in the 30 directory. 31 d. A determination by the director to not include or to 32 remove a vapor products manufacturer or a vapor product from 33 the directory shall be subject to review by the filing of a 34 civil action for prospective declaratory or injunctive relief. 35 -4- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 4/ 9

7. If a vapor product is removed from the directory, 1 the director shall notify each retailer, distributor, 2 and wholesaler of the removal of the vapor product and 3 the effective date of such removal from the directory via 4 electronic communication. 5 8. If a vapor product is removed from the directory, each 6 retailer, distributor, and wholesaler shall have twenty-one 7 business days from the day such vapor product is removed from 8 the directory to remove the vapor product from its inventory 9 and return the vapor product to the vapor products manufacturer 10 for disposal. After twenty-one business days following removal 11 from the directory, the vapor products of a vapor products 12 manufacturer identified in the notice of removal are contraband 13 and are subject to seizure, forfeiture, and destruction, and 14 shall not be purchased or sold in the state. The cost of such 15 seizure, forfeiture, and destruction shall be borne by the 16 person from whom the vapor products are confiscated. 17 Sec. 5. NEW SECTION . 453A.52A Vapor products —— 18 requirements. 19 Beginning October 1, 2024, or on the date the director 20 first makes the vapor products directory available for public 21 inspection on the department’s internet site, whichever is 22 later, all of the following shall apply to vapor products in 23 this state: 24 1. A person shall not sell or offer for sale a vapor product 25 in this state that is not included in the vapor products 26 directory, and a vapor products manufacturer shall not sell, 27 either directly or through a distributor, wholesaler, retailer, 28 or similar intermediary or intermediaries, a vapor product 29 in this state that is not included in the vapor products 30 directory. 31 2. A retailer shall purchase vapor products for resale to 32 consumers only from a distributor or subjobber with a valid 33 license issued pursuant to this chapter. 34 Sec. 6. NEW SECTION . 453A.52B Penalties. 35 -5- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 5/ 9

1. A retailer, distributor, or wholesaler who sells or 1 offers for sale a vapor product in this state that is not 2 included in the vapor products directory established in 3 this subchapter shall be subject to all of the following, as 4 applicable: 5 a. A civil penalty of three hundred dollars per day for each 6 vapor product offered for sale in violation of this subsection 7 until the offending vapor product is removed from the market 8 or until the offending vapor product is properly listed on the 9 directory. 10 b. For a second violation within a period of two years, a 11 retailer shall be assessed a civil penalty of one thousand five 12 hundred dollars or the retailer’s permit shall be suspended for 13 a period of thirty days. 14 c. For a third violation within a period of three years, a 15 retailer shall be assessed a civil penalty of one thousand five 16 hundred dollars and the retailer’s permit shall be suspended 17 for a period of thirty days. 18 d. For a fourth violation within a period of three years, a 19 retailer shall be assessed a civil penalty of one thousand five 20 hundred dollars and the retailer’s permit shall be suspended 21 for a period of sixty days. 22 e. For a fifth violation within a period of four years, the 23 retailer’s permit shall be revoked. 24 2. A vapor products manufacturer whose vapor products are 25 not listed in the vapor products directory and are sold in this 26 state, whether directly or through a distributor, wholesaler, 27 retailer, or similar intermediary or intermediaries, is subject 28 to a civil penalty of one thousand dollars per day for each 29 vapor product offered for sale in violation of this subsection 30 until the offending vapor product is removed from the market 31 or until the offending vapor product is properly listed on the 32 directory. 33 3. Any vapor products manufacturer that knowingly makes a 34 false representation in any of the information required by this 35 -6- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 6/ 9

subchapter is guilty of a serious misdemeanor for each false 1 representation. 2 4. Knowingly shipping or receiving vapor products in 3 violation of this subchapter is an unfair practice and a 4 violation of section 714.16. 5 5. In any action brought by the state to enforce this 6 subchapter, the state shall be entitled to recover the costs 7 of investigation and prosecution, expert witness fees, court 8 costs, and reasonable attorney fees. 9 Sec. 7. NEW SECTION . 453A.52C Compliance checks. 10 1. Each distributor or retailer that distributes or sells 11 vapor products in this state shall be subject to unannounced 12 compliance checks conducted by the department or peace officers 13 as defined in section 801.4 for purposes of enforcing this 14 subchapter. Peace officers who conduct compliance checks 15 pursuant to this section shall forward the results of any 16 compliance check to the department in a manner prescribed by 17 the department within thirty business days after the compliance 18 check is conducted. 19 2. Any unannounced follow-up compliance checks of a 20 noncompliant retailer or distributor shall be conducted within 21 thirty business days after any violation of this subchapter. 22 3. The director shall publish the results of all compliance 23 checks performed under this section at least annually and shall 24 make the results available to the public upon request. 25 Sec. 8. NEW SECTION . 453A.52D Agent for service of process. 26 1. A nonresident vapor products manufacturer that has not 27 registered to do business in the state as a foreign corporation 28 or business entity shall, as a condition precedent to being 29 included or retained in the vapor products directory, appoint 30 and continually engage without interruption the services of 31 an agent in this state to act as agent for service of process 32 on whom all process, and any action or proceeding against the 33 vapor products manufacturer concerning or arising out of the 34 enforcement of this subchapter, may be served in any manner 35 -7- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 7/ 9

authorized by law. Such service shall constitute legal and 1 valid service of process on the vapor products manufacturer. 2 The vapor products manufacturer shall provide the name, 3 address, telephone number, and proof of the appointment and 4 availability of such agent to the director. 5 2. The vapor products manufacturer shall provide notice 6 to the director thirty calendar days prior to termination of 7 the authority of an agent and shall further provide proof to 8 the satisfaction of the director of the appointment of a new 9 agent no less than five calendar days prior to the termination 10 of an existing agent appointment. In the event an agent 11 terminates an agency appointment, the manufacturer shall notify 12 the director of the termination within five calendar days and 13 shall include proof to the satisfaction of the director of the 14 appointment of a new agent. 15 3. A vapor products manufacturer whose vapor products 16 are sold in this state, who has not appointed and engaged 17 the services of an agent as required by this section, shall 18 be deemed to have appointed the secretary of state as its 19 agent for service of process. However, the appointment of the 20 secretary of state as agent shall not satisfy the condition 21 precedent for the vapor products manufacturer to be included or 22 retained in the vapor products directory. 23 Sec. 9. NEW SECTION . 453A.52E Proceeds paid to health care 24 trust fund. 25 The revenues generated from the payment of fees and 26 penalties provided for under this subchapter shall be credited 27 to the health care trust fund created in section 453A.35A and 28 used for the administration and enforcement of this subchapter. 29 Sec. 10. NEW SECTION . 453A.52F Annual reports. 30 By January 15, annually, following the date the director 31 first makes the vapor products directory available as specified 32 in section 453A.52A, the director shall submit a report to the 33 general assembly regarding the status of the vapor products 34 directory, vapor products manufacturers, the vapor products 35 -8- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 8/ 9

included in the directory, revenue and expenditures related to 1 administration of this subchapter, and enforcement activities 2 undertaken pursuant to this subchapter. 3 Sec. 11. NEW SECTION . 453A.52G Adoption of rules. 4 The director shall adopt rules pursuant to chapter 17A to 5 administer this subchapter. 6 Sec. 12. CODE EDITOR DIRECTIVES. 7 1. The Code editor is directed to create a new subchapter IV 8 in chapter 453A as follows: Subchapter IV shall be entitled 9 “Uniform Application of Chapter”. 10 2. The Code editor shall transfer section 453A.56 to the new 11 subchapter IV. 12 3. The Code editor is directed to create a new subchapter 13 III in chapter 453A as follows: Subchapter III shall be 14 entitled “Vapor Products Directory and Regulation” and include 15 sections 453A.52A through 453A.52G. 16 4. The Code editor may modify subchapter titles if necessary 17 and is directed to correct internal references in the Code as 18 necessary due to enactment of this section. > 19 ______________________________ CHRIS COURNOYER -9- SF 2402.4049 (2) 90 amending this SF 2402 to CONFORM to HF 2677 pf/jh 9/ 9