H.F. _____ Section 1. Section 453A.1, subsection 21, Code 2014, is 1 amended to read as follows: 2 21. “Retailer” shall mean and include every person in 3 this state who shall sell, distribute, or offer for sale for 4 consumption or possess for the purpose of sale for consumption, 5 cigarettes , alternative nicotine products, or vapor products 6 irrespective of quantity or amount or the number of sales. 7 Sec. 2. Section 453A.1, Code 2014, is amended by adding the 8 following new subsections: 9 NEW SUBSECTION . 01. “Alternative nicotine product” means 10 a product, not consisting of or containing tobacco, that 11 provides for the ingestion into the body of nicotine, whether 12 by chewing, absorbing, dissolving, inhaling, snorting, or 13 sniffing, or by any other means. “Alternative nicotine product” 14 does not include cigarettes, tobacco products, or vapor 15 products, or a product that is regulated as a drug or device by 16 the United States food and drug administration under chapter V 17 of the federal Food, Drug, and Cosmetic Act. 18 NEW SUBSECTION . 26A. “Vapor product” means a noncombustible 19 product containing nicotine that employs a mechanical heating 20 element, battery, or circuit, regardless of shape or size, that 21 can be used to heat a nicotine solution, and includes but is 22 not limited to a cartridge or other container of such nicotine 23 solution, an electronic cigarette, an electronic cigar, an 24 electronic cigarillo, or an electronic pipe. “Vapor product” 25 does not include a product regulated as a drug or device by the 26 United States food and drug administration under chapter V of 27 the federal Food, Drug, and Cosmetic Act. 28 Sec. 3. Section 453A.2, subsections 1, 2, 3, and 8, Code 29 2014, are amended to read as follows: 30 1. A person shall not sell, give, or otherwise supply any 31 tobacco, tobacco products, alternative nicotine products, vapor 32 products, or cigarettes to any person under eighteen years of 33 age. 34 2. A person under eighteen years of age shall not smoke, 35 -1- LSB 5228YC (12) 85 pf/rj 1/ 8

H.F. _____ use, possess, purchase, or attempt to purchase any tobacco, 1 tobacco products, alternative nicotine products, vapor 2 products, or cigarettes. 3 3. Possession of cigarettes or tobacco , tobacco products , 4 alternative nicotine products, vapor products, or cigarettes by 5 an individual under eighteen years of age does not constitute a 6 violation under this section if the individual under eighteen 7 years of age possesses the cigarettes or tobacco , tobacco 8 products , alternative nicotine products, vapor products, or 9 cigarettes as part of the individual’s employment and the 10 individual is employed by a person who holds a valid permit 11 under this chapter or who lawfully offers for sale or sells 12 cigarettes or tobacco products. 13 8. a. A person shall not be guilty of a violation of 14 this section if conduct that would otherwise constitute a 15 violation is performed to assess compliance with cigarette and 16 tobacco , tobacco products , alternative nicotine products, vapor 17 products, or cigarette laws if any of the following applies: 18 (1) The compliance effort is conducted by or under the 19 supervision of law enforcement officers. 20 (2) The compliance effort is conducted with the advance 21 knowledge of law enforcement officers and reasonable measures 22 are adopted by those conducting the effort to ensure that 23 use of cigarettes or tobacco , tobacco products , alternative 24 nicotine products, vapor products, or cigarettes by individuals 25 under eighteen years of age does not result from participation 26 by any individual under eighteen years of age in the compliance 27 effort. 28 b. For the purposes of this subsection , “law enforcement 29 officer” means a peace officer as defined in section 801.4 and 30 includes persons designated under subsection 4 to enforce this 31 section . 32 Sec. 4. Section 453A.4, subsection 1, Code 2014, is amended 33 to read as follows: 34 1. If a person holding a permit under this chapter or an 35 -2- LSB 5228YC (12) 85 pf/rj 2/ 8

H.F. _____ employee of such a permittee has a reasonable belief based on 1 factual evidence that a driver’s license as defined in section 2 321.1, subsection 20A, or nonoperator’s identification card 3 issued pursuant to section 321.190 offered by a person who 4 wishes to purchase cigarettes or tobacco , tobacco products , 5 alternative nicotine products, vapor products, or cigarettes 6 is altered or falsified or belongs to another person, the 7 permittee or employee may retain the driver’s license or 8 nonoperator’s identification card. Within twenty-four hours, 9 the card shall be delivered to the appropriate city or county 10 law enforcement agency of the jurisdiction in which the 11 permittee’s premises are located, and the permittee shall file 12 a written report of the circumstances under which the card was 13 retained. The local law enforcement agency may investigate 14 whether a violation of section 321.216 , 321.216A , or 321.216C 15 has occurred. If an investigation is not initiated or probable 16 cause is not established by the local law enforcement agency, 17 the driver’s license or nonoperator’s identification card shall 18 be delivered to the person to whom it was issued. The local law 19 enforcement agency may forward the card with the report to the 20 state department of transportation for investigation, in which 21 case, the state department of transportation may investigate 22 whether a violation of section 321.216 , 321.216A , or 321.216C 23 has occurred. The state department of transportation shall 24 return the card to the person to whom it was issued if an 25 investigation is not initiated or probable cause is not 26 established. 27 Sec. 5. Section 453A.5, subsection 1, Code 2014, is amended 28 to read as follows: 29 1. The alcoholic beverages division of the department of 30 commerce shall develop a tobacco compliance employee training 31 program not to exceed two hours in length for employees and 32 prospective employees of retailers, as defined in sections 33 453A.1 and 453A.42 , to inform the employees about state and 34 federal laws and regulations regarding the sale of cigarettes 35 -3- LSB 5228YC (12) 85 pf/rj 3/ 8

H.F. _____ and tobacco , tobacco products , alternative nicotine products, 1 vapor products, and cigarettes to persons under eighteen 2 years of age and compliance with and the importance of laws 3 regarding the sale of cigarettes and tobacco , tobacco products , 4 alternative nicotine products, vapor products, and cigarettes 5 to persons under eighteen years of age. 6 Sec. 6. Section 453A.36, subsection 7, Code 2014, is amended 7 to read as follows: 8 7. a. It shall be unlawful for a person other than a holder 9 of a retailer as defined in section 453A.1 or 453A.42 who holds 10 a valid retail permit , as applicable, to sell tobacco, tobacco 11 products, alternative nicotine products, vapor products, or 12 cigarettes at retail. 13 b. No A state permit holder shall not sell or distribute 14 cigarettes at wholesale to any person in the state of Iowa 15 who does not hold a permit authorizing the retail sale 16 of cigarettes or who does not hold a state permit as a 17 manufacturer, distributing agent, wholesaler, or distributor. 18 Sec. 7. Section 453A.36A, subsection 1, Code 2014, is 19 amended to read as follows: 20 1. Beginning January 1, 1999, except Except as provided in 21 section 453A.36, subsection 6 , a retailer shall not sell or 22 offer for sale cigarettes or tobacco , tobacco products, in a 23 quantity of less than a carton, alternative nicotine products, 24 vapor products, or cigarettes through the use of a self-service 25 display. 26 Sec. 8. Section 453A.39, Code 2014, is amended to read as 27 follows: 28 453A.39 Tobacco product , tobacco products, alternative 29 nicotine products, vapor products, and cigarette samples —— 30 restrictions —— administration. 31 1. A manufacturer, distributor, wholesaler, retailer, or 32 distributing agent, or agent thereof, shall not give away 33 cigarettes or tobacco products at any time in connection with 34 the manufacturer’s, distributor’s, wholesaler’s, retailer’s, or 35 -4- LSB 5228YC (12) 85 pf/rj 4/ 8

H.F. _____ distributing agent’s business or for promotion of the business 1 or product, except as provided in subsection 2 . 2 2. a. All cigarette samples shall be shipped only to a 3 distributor that has a permit to stamp cigarettes or little 4 cigars with Iowa tax. All cigarette samples must have a 5 cigarette stamp. The manufacturer shipping samples under this 6 section shall send an affidavit to the director stating the 7 shipment information, including the date shipped, quantity, and 8 to whom the samples were shipped. The distributor receiving 9 the shipment shall send an affidavit to the director stating 10 the shipment information, including the date shipped, quantity, 11 and from whom the samples were shipped. These affidavits shall 12 be duly notarized and submitted to the director at the time of 13 shipment and receipt of the samples. The distributor shall 14 pay the tax on samples by separate remittance along with the 15 affidavit. 16 b. A manufacturer, distributor, wholesaler, retailer, or 17 distributing agent or agent thereof shall not give away any 18 cigarettes or tobacco , tobacco products , alternative nicotine 19 products, vapor products, or cigarettes to any person under 20 eighteen years of age, or within five hundred feet of any 21 playground, school, high school, or other facility when such 22 facility is being used primarily by persons under age eighteen 23 for recreational, educational, or other purposes. 24 c. Proof of age shall be required if a reasonable person 25 could conclude on the basis of outward appearance that a 26 prospective recipient of a sample may be under eighteen years 27 of age. 28 Sec. 9. Section 453A.42, subsection 10, Code 2014, is 29 amended to read as follows: 30 10. “Retailer” means any person engaged in the business 31 of selling tobacco , tobacco products , alternative nicotine 32 products, or vapor products to ultimate consumers. 33 Sec. 10. Section 805.8C, subsection 3, Code 2014, is amended 34 to read as follows: 35 -5- LSB 5228YC (12) 85 pf/rj 5/ 8

H.F. _____ 3. Smoking violations Violations related to smoking, tobacco, 1 tobacco products, alternative nicotine products, vapor products, 2 and cigarettes . 3 a. For violations described in section 142D.9, subsection 1 , 4 the scheduled fine is fifty dollars, and is a civil penalty, 5 and the criminal penalty surcharge under section 911.1 shall 6 not be added to the penalty, and the court costs pursuant 7 to section 805.9, subsection 6 , shall not be imposed. If 8 the civil penalty assessed for a violation described in 9 section 142D.9, subsection 1 , is not paid in a timely manner, 10 a citation shall be issued for the violation in the manner 11 provided in section 804.1 . However, a person under age 12 eighteen shall not be detained in a secure facility for failure 13 to pay the civil penalty. The complainant shall not be charged 14 a filing fee. 15 b. For violations of section 453A.2, subsection 1 , by an 16 employee of a retailer, the scheduled fine is as follows: 17 (1) If the violation is a first offense, the scheduled fine 18 is one hundred dollars. 19 (2) If the violation is a second offense, the scheduled fine 20 is two hundred fifty dollars. 21 (3) If the violation is a third or subsequent offense, the 22 scheduled fine is five hundred dollars. 23 c. For violations of section 453A.2, subsection 2 , the 24 scheduled fine is as follows and is a civil penalty, and the 25 criminal penalty surcharge under section 911.1 shall not be 26 added to the penalty, and the court costs pursuant to section 27 805.9, subsection 6 , shall not be imposed: 28 (1) If the violation is a first offense, the scheduled fine 29 is fifty dollars. 30 (2) If the violation is a second offense, the scheduled fine 31 is one hundred dollars. 32 (3) If the violation is a third or subsequent offense, the 33 scheduled fine is two hundred fifty dollars. 34 Sec. 11. EFFECTIVE UPON ENACTMENT. This Act, being deemed 35 -6- LSB 5228YC (12) 85 pf/rj 6/ 8

H.F. _____ of immediate importance, takes effect upon enactment. 1 Sec. 12. CODE EDITOR DIRECTIVE. The Code editor shall 2 modify the title of chapter 453A to read “Cigarette and Tobacco 3 Taxes and Regulation of Alternative Nicotine Products and Vapor 4 Products”. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 This bill relates to the regulation of alternative nicotine 9 products and vapor products. The bill defines “alternative 10 nicotine products” and “vapor products” separately from 11 cigarettes and tobacco products under Code chapter 453A 12 (cigarette and tobacco taxes). 13 The bill includes alternative nicotine products and 14 vapor products under the prohibitions relating to persons 15 under legal age. Under the bill, a person shall not sell, 16 give, or otherwise supply any tobacco, tobacco products, 17 alternative nicotine products, vapor products, or cigarettes 18 to any person under 18 years of age; and a person under 18 19 years of age is prohibited from smoking, using, possessing, 20 purchasing, or attempting to purchase any tobacco, tobacco 21 products, alternative nicotine products, vapor products, 22 or cigarettes. However, possession of tobacco, tobacco 23 products, alternative nicotine products, vapor products, or 24 cigarettes by an individual under 18 years of age does not 25 constitute a violation if the individual under 18 possesses 26 the tobacco, tobacco products, alternative nicotine products, 27 vapor products, or cigarettes as part of the individual’s 28 employment and the individual is employed by a person who 29 holds a valid permit or who lawfully offers for sale or sells 30 cigarettes or tobacco products. Additionally, a person is 31 not guilty of a violation if conduct that would otherwise 32 constitute a violation is performed to assess compliance with 33 tobacco, tobacco products, alternative nicotine products, vapor 34 products, or cigarette laws under specified conditions. 35 -7- LSB 5228YC (12) 85 pf/rj 7/ 8

H.F. _____ The bill amends provisions relating to the suspected use of 1 a falsified driver’s license or nonoperator’s identification 2 card to purchase cigarettes and tobacco products, to also apply 3 to the purchase of tobacco, alternative nicotine products and 4 vapor products; and amends provisions relating to the tobacco 5 compliance employee training program developed by the alcoholic 6 beverages division of the department of commerce to address, 7 in addition to cigarettes and tobacco products, tobacco, 8 alternative nicotine products, and vapor products. 9 The bill provides that it is unlawful for a person other 10 than a retailer who holds a valid retail permit to sell 11 tobacco, tobacco products, alternative nicotine products, 12 vapor products, or cigarettes at retail. The bill redefines 13 “retailer” to include those who sell, in addition to cigarettes 14 or tobacco products, tobacco, alternative nicotine products, 15 or vapor products. The bill makes applicable to tobacco, 16 alternative nicotine products, and vapor products, in addition 17 to tobacco products and cigarettes, the prohibition against a 18 retailer selling or offering for sale these products through 19 the use of a self-service display. The bill includes tobacco, 20 alternative nicotine products, and vapor products in the 21 prohibition against giving away samples of these products to 22 any person under 18 years of age, or within 500 hundred feet 23 of any playground, school, high school, or other facility when 24 such facility is being used primarily by persons under age 18 25 for recreational, educational, or other purposes. 26 The bill amends the headnote of the scheduled violations 27 provision relating to smoking to include violations relating 28 to smoking, tobacco, tobacco products, alternative nicotine 29 products, vapor products, and cigarettes. 30 The bill directs the Code editor to modify the title 31 of Code chapter 453A to read “Cigarette and Tobacco Taxes 32 and Regulation of Alternative Nicotine Products and Vapor 33 Products”. 34 The bill takes effect upon enactment. 35 -8- LSB 5228YC (12) 85 pf/rj 8/ 8