S.F. 2038 Section 1. Section 453A.1, Code 2014, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 26A. “Vapor product” means a noncombustible 3 product containing nicotine that employs a mechanical heating 4 element, battery, or circuit, regardless of shape or size, that 5 can be used to heat a nicotine solution, and includes but is 6 not limited to a cartridge or other container of such nicotine 7 solution, an electronic cigarette, an electronic cigar, an 8 electronic cigarillo, or an electronic pipe. “Vapor product” 9 does not include a product regulated as a drug or device by the 10 United States food and drug administration under chapter V of 11 the federal Food, Drug, and Cosmetic Act. 12 Sec. 2. Section 453A.2, subsections 1, 2, 3, and 8, Code 13 2014, are amended to read as follows: 14 1. A person shall not sell, give, or otherwise supply any 15 tobacco, tobacco products, vapor products, or cigarettes to any 16 person under eighteen years of age. 17 2. A person under eighteen years of age shall not smoke, 18 use, possess, purchase, or attempt to purchase any tobacco, 19 tobacco products, vapor products, or cigarettes. 20 3. Possession of cigarettes or tobacco , tobacco products , 21 vapor products, or cigarettes by an individual under eighteen 22 years of age does not constitute a violation under this section 23 if the individual under eighteen years of age possesses the 24 cigarettes or tobacco , tobacco products , vapor products, or 25 cigarettes as part of the individual’s employment and the 26 individual is employed by a person who holds a valid permit 27 under this chapter or who lawfully offers for sale or sells 28 cigarettes or tobacco products. 29 8. a. A person shall not be guilty of a violation of this 30 section if conduct that would otherwise constitute a violation 31 is performed to assess compliance with cigarette and tobacco , 32 tobacco products , vapor products, or cigarette laws if any of 33 the following applies: 34 (1) The compliance effort is conducted by or under the 35 -1- LSB 5156XS (6) 85 pf/rj 1/ 7

S.F. 2038 supervision of law enforcement officers. 1 (2) The compliance effort is conducted with the advance 2 knowledge of law enforcement officers and reasonable measures 3 are adopted by those conducting the effort to ensure that use 4 of cigarettes or tobacco , tobacco products , vapor products, 5 or cigarettes by individuals under eighteen years of age does 6 not result from participation by any individual under eighteen 7 years of age in the compliance effort. 8 b. For the purposes of this subsection , “law enforcement 9 officer” means a peace officer as defined in section 801.4 and 10 includes persons designated under subsection 4 to enforce this 11 section . 12 Sec. 3. Section 453A.4, subsection 1, Code 2014, is amended 13 to read as follows: 14 1. If a person holding a permit under this chapter or an 15 employee of such a permittee has a reasonable belief based on 16 factual evidence that a driver’s license as defined in section 17 321.1, subsection 20A, or nonoperator’s identification card 18 issued pursuant to section 321.190 offered by a person who 19 wishes to purchase cigarettes or tobacco , tobacco products , 20 vapor products, or cigarettes is altered or falsified or 21 belongs to another person, the permittee or employee may 22 retain the driver’s license or nonoperator’s identification 23 card. Within twenty-four hours, the card shall be delivered to 24 the appropriate city or county law enforcement agency of the 25 jurisdiction in which the permittee’s premises are located, and 26 the permittee shall file a written report of the circumstances 27 under which the card was retained. The local law enforcement 28 agency may investigate whether a violation of section 321.216 , 29 321.216A , or 321.216C has occurred. If an investigation is not 30 initiated or probable cause is not established by the local 31 law enforcement agency, the driver’s license or nonoperator’s 32 identification card shall be delivered to the person to whom it 33 was issued. The local law enforcement agency may forward the 34 card with the report to the state department of transportation 35 -2- LSB 5156XS (6) 85 pf/rj 2/ 7

S.F. 2038 for investigation, in which case, the state department 1 of transportation may investigate whether a violation of 2 section 321.216 , 321.216A , or 321.216C has occurred. The 3 state department of transportation shall return the card to 4 the person to whom it was issued if an investigation is not 5 initiated or probable cause is not established. 6 Sec. 4. Section 453A.5, subsection 1, Code 2014, is amended 7 to read as follows: 8 1. The alcoholic beverages division of the department of 9 commerce shall develop a tobacco compliance employee training 10 program not to exceed two hours in length for employees and 11 prospective employees of retailers, as defined in sections 12 453A.1 and 453A.42 , to inform the employees about state and 13 federal laws and regulations regarding the sale of cigarettes 14 and tobacco , tobacco products , vapor products, and cigarettes 15 to persons under eighteen years of age and compliance with and 16 the importance of laws regarding the sale of cigarettes and 17 tobacco , tobacco products , vapor products, and cigarettes to 18 persons under eighteen years of age. 19 Sec. 5. Section 453A.36, subsection 7, Code 2014, is amended 20 to read as follows: 21 7. a. It shall be unlawful for a person other than a holder 22 of a retailer as defined in section 453A.1 or 453A.42 who holds 23 a valid retail permit , as applicable, to sell tobacco, tobacco 24 products, vapor products, or cigarettes at retail. 25 b. No A state permit holder shall not sell or distribute 26 cigarettes at wholesale to any person in the state of Iowa 27 who does not hold a permit authorizing the retail sale 28 of cigarettes or who does not hold a state permit as a 29 manufacturer, distributing agent, wholesaler, or distributor. 30 Sec. 6. Section 453A.36A, subsection 1, Code 2014, is 31 amended to read as follows: 32 1. Beginning January 1, 1999, except Except as provided in 33 section 453A.36, subsection 6 , a retailer shall not sell or 34 offer for sale cigarettes or tobacco , tobacco products, in a 35 -3- LSB 5156XS (6) 85 pf/rj 3/ 7

S.F. 2038 quantity of less than a carton, vapor products, or cigarettes 1 through the use of a self-service display. 2 Sec. 7. Section 453A.39, Code 2014, is amended to read as 3 follows: 4 453A.39 Tobacco product , tobacco products, vapor products, 5 and cigarette samples —— restrictions —— administration. 6 1. A manufacturer, distributor, wholesaler, retailer, or 7 distributing agent, or agent thereof, shall not give away 8 cigarettes or tobacco , tobacco products , vapor products, or 9 cigarettes at any time in connection with the manufacturer’s, 10 distributor’s, wholesaler’s, retailer’s, or distributing 11 agent’s business or for promotion of the business or product, 12 except as provided in subsection 2 . 13 2. a. All cigarette samples shall be shipped only to a 14 distributor that has a permit to stamp cigarettes or little 15 cigars with Iowa tax. All cigarette samples must have a 16 cigarette stamp. The manufacturer shipping samples under this 17 section shall send an affidavit to the director stating the 18 shipment information, including the date shipped, quantity, and 19 to whom the samples were shipped. The distributor receiving 20 the shipment shall send an affidavit to the director stating 21 the shipment information, including the date shipped, quantity, 22 and from whom the samples were shipped. These affidavits shall 23 be duly notarized and submitted to the director at the time of 24 shipment and receipt of the samples. The distributor shall 25 pay the tax on samples by separate remittance along with the 26 affidavit. 27 b. A manufacturer, distributor, wholesaler, retailer, or 28 distributing agent or agent thereof shall not give away any 29 cigarettes or tobacco , tobacco products , vapor products, or 30 cigarettes to any person under eighteen years of age, or within 31 five hundred feet of any playground, school, high school, or 32 other facility when such facility is being used primarily by 33 persons under age eighteen for recreational, educational, or 34 other purposes. 35 -4- LSB 5156XS (6) 85 pf/rj 4/ 7

S.F. 2038 c. Proof of age shall be required if a reasonable person 1 could conclude on the basis of outward appearance that a 2 prospective recipient of a sample may be under eighteen years 3 of age. 4 Sec. 8. Section 805.8C, subsection 3, Code 2014, is amended 5 to read as follows: 6 3. Smoking violations Violations related to smoking, tobacco, 7 tobacco products, vapor products, and cigarettes . 8 a. For violations described in section 142D.9, subsection 1 , 9 the scheduled fine is fifty dollars, and is a civil penalty, 10 and the criminal penalty surcharge under section 911.1 shall 11 not be added to the penalty, and the court costs pursuant 12 to section 805.9, subsection 6 , shall not be imposed. If 13 the civil penalty assessed for a violation described in 14 section 142D.9, subsection 1 , is not paid in a timely manner, 15 a citation shall be issued for the violation in the manner 16 provided in section 804.1 . However, a person under age 17 eighteen shall not be detained in a secure facility for failure 18 to pay the civil penalty. The complainant shall not be charged 19 a filing fee. 20 b. For violations of section 453A.2, subsection 1 , by an 21 employee of a retailer, the scheduled fine is as follows: 22 (1) If the violation is a first offense, the scheduled fine 23 is one hundred dollars. 24 (2) If the violation is a second offense, the scheduled fine 25 is two hundred fifty dollars. 26 (3) If the violation is a third or subsequent offense, the 27 scheduled fine is five hundred dollars. 28 c. For violations of section 453A.2, subsection 2 , the 29 scheduled fine is as follows and is a civil penalty, and the 30 criminal penalty surcharge under section 911.1 shall not be 31 added to the penalty, and the court costs pursuant to section 32 805.9, subsection 6 , shall not be imposed: 33 (1) If the violation is a first offense, the scheduled fine 34 is fifty dollars. 35 -5- LSB 5156XS (6) 85 pf/rj 5/ 7

S.F. 2038 (2) If the violation is a second offense, the scheduled fine 1 is one hundred dollars. 2 (3) If the violation is a third or subsequent offense, the 3 scheduled fine is two hundred fifty dollars. 4 Sec. 9. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 5 immediate importance, takes effect upon enactment. 6 Sec. 10. CODE EDITOR DIRECTIVE. The Code editor shall 7 modify the title of chapter 453A to read “Cigarette and Tobacco 8 Taxes and Regulation of Vapor Products”. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill relates to the regulation of vapor products. The 13 bill defines “vapor products” separately from cigarettes and 14 tobacco products under Code chapter 453A (cigarette and tobacco 15 taxes). 16 The bill includes vapor products under the prohibitions 17 relating to persons under legal age. Under the bill, a person 18 shall not sell, give, or otherwise supply any tobacco, tobacco 19 products, vapor products, or cigarettes to any person under 18 20 years of age; and a person under 18 years of age is prohibited 21 from smoking, using, possessing, purchasing, or attempting to 22 purchase any tobacco, tobacco products, vapor products, or 23 cigarettes. However, possession of tobacco, tobacco products, 24 vapor products, or cigarettes by an individual under 18 years 25 of age does not constitute a violation if the individual under 26 18 possesses the tobacco, tobacco products, vapor products, 27 or cigarettes as part of the individual’s employment and the 28 individual is employed by a person who holds a valid permit or 29 who lawfully offers for sale or sells cigarettes or tobacco 30 products. Additionally, a person is not guilty of a violation 31 if conduct that would otherwise constitute a violation is 32 performed to assess compliance with tobacco, tobacco products, 33 vapor products, or cigarette laws under specified conditions. 34 The bill amends provisions relating to the suspected use of 35 -6- LSB 5156XS (6) 85 pf/rj 6/ 7

S.F. 2038 a falsified driver’s license or nonoperator’s identification 1 card to purchase cigarettes and tobacco products, to also apply 2 to the purchase of tobacco and vapor products; and amends 3 provisions relating to the tobacco compliance employee training 4 program developed by the alcoholic beverages division of the 5 department of commerce to address, in addition to cigarettes 6 and tobacco products, tobacco, and vapor products. 7 The bill provides that it is unlawful for a person other 8 than a retailer of cigarettes or tobacco products who holds a 9 valid retail permit to sell tobacco, tobacco products, vapor 10 products, or cigarettes at retail. The bill makes applicable 11 to tobacco and vapor products, in addition to tobacco products 12 and cigarettes, the prohibition against a retailer selling 13 or offering for sale these products through the use of a 14 self-service display. The bill includes tobacco and vapor 15 products in the prohibition against giving away samples of 16 these products to any person under 18 years of age, or within 17 500 hundred feet of any playground, school, high school, or 18 other facility when such facility is being used primarily by 19 persons under age 18 for recreational, educational, or other 20 purposes. 21 The bill amends the headnote of the scheduled violations 22 provision relating to smoking to include violations relating 23 to smoking, tobacco, tobacco products, vapor products, and 24 cigarettes. 25 The bill directs the Code editor to modify the title of 26 Code chapter 453A to read “Cigarette and Tobacco Taxes and 27 Regulation of Vapor Products”. 28 The bill takes effect upon enactment. 29 -7- LSB 5156XS (6) 85 pf/rj 7/ 7