H.F. 306 Section 1. Section 453A.1, subsections 1, 22, 27, and 28, 1 Code 2015, are amended to read as follows: 2 1. “Alternative nicotine product” means a product, not 3 consisting of or containing tobacco, that provides for the 4 ingestion into the body of nicotine, whether by chewing, 5 absorbing, dissolving, inhaling, snorting, or sniffing, or 6 by any other means. “Alternative nicotine product” does not 7 include cigarettes , tobacco products, or vapor products, or a 8 product that is regulated approved as a drug or device by the 9 United States food and drug administration under chapter V of 10 the federal Food, Drug, and Cosmetic Act. 11 22. “Retailer” shall mean and include every person in 12 this state who shall sell, distribute, or offer for sale for 13 consumption or possess for the purpose of sale for consumption, 14 cigarettes , alternative nicotine products, or vapor products 15 irrespective of quantity or amount or the number of sales. 16 27. “Tobacco products” means any product, or component, 17 part, or accessory of such product, containing, made in 18 whole or in part from, ordinarily derived from, or designed 19 to deliver tobacco, a tobacco substitute, or nicotine, and 20 intended for human consumption whether by chewing, absorbing, 21 dissolving, inhaling, snorting, sniffing, ingesting, or 22 vaporizing or by any other means. “Tobacco products” includes 23 but is not limited to alternative nicotine products and vapor 24 products; cigars; little cigars as defined in section 453A.42, 25 subsection 5 ; cheroots; stogies; periques; granulated ; , plug 26 cut, crimp cut, ready rubbed, and other smoking tobacco; 27 snuff , ; snuff flour; cavendish; plug and twist tobacco; 28 fine-cut and other chewing tobaccos; shorts; or refuse scraps, 29 clippings, cuttings , and sweepings of tobacco , ; and other kinds 30 and forms of tobacco , prepared in such manner as to be suitable 31 for chewing or smoking in a pipe or otherwise, or both for 32 chewing and smoking ; but does not mean include cigarettes. 33 28. “Vapor product” means any noncombustible product, 34 which may or may not contain nicotine, that employs a heating 35 -1- LSB 2273HH (5) 86 pf/nh 1/ 10

H.F. 306 element, power source, electronic circuit, or other electronic, 1 chemical, or mechanical means, regardless of shape or size, 2 that can be used to produce vapor from a solution or other 3 substance. “Vapor product” includes an electronic cigarette, 4 electronic cigar, electronic cigarillo, electronic pipe, or 5 similar product or device, and any cartridge or other container 6 of a solution or other substance, which may or may not contain 7 nicotine, that is intended to be used with or in an electronic 8 cigarette, electronic cigar, electronic cigarillo, electronic 9 pipe, or similar product or device. “Vapor product” does not 10 include a product regulated approved as a drug or device by the 11 United States food and drug administration under chapter V of 12 the federal Food, Drug, and Cosmetic Act. 13 Sec. 2. Section 453A.2, subsections 1, 2, 3, and 8, Code 14 2015, are amended to read as follows: 15 1. A person shall not sell, give, or otherwise supply any 16 tobacco, tobacco products, alternative nicotine products, vapor 17 products, or cigarettes to any person under eighteen years of 18 age. 19 2. A person under eighteen years of age shall not smoke, 20 use, possess, purchase, or attempt to purchase any tobacco, 21 tobacco products, alternative nicotine products, vapor 22 products, or cigarettes. 23 3. Possession of tobacco, tobacco products, alternative 24 nicotine products, vapor products, or cigarettes by an 25 individual under eighteen years of age does not constitute 26 a violation under this section if the individual under 27 eighteen years of age possesses the tobacco, tobacco products, 28 alternative nicotine products, vapor products, or cigarettes 29 as part of the individual’s employment and the individual 30 is employed by a person who holds a valid permit under this 31 chapter or who lawfully offers for sale or sells cigarettes or 32 tobacco products. 33 8. a. A person shall not be guilty of a violation of this 34 section if conduct that would otherwise constitute a violation 35 -2- LSB 2273HH (5) 86 pf/nh 2/ 10

H.F. 306 is performed to assess compliance with tobacco, tobacco 1 products, alternative nicotine products, vapor products, or 2 cigarette laws if any of the following applies: 3 (1) The compliance effort is conducted by or under the 4 supervision of law enforcement officers. 5 (2) The compliance effort is conducted with the advance 6 knowledge of law enforcement officers and reasonable measures 7 are adopted by those conducting the effort to ensure that 8 use of tobacco, tobacco products, alternative nicotine 9 products, vapor products, or cigarettes by individuals under 10 eighteen years of age does not result from participation by 11 any individual under eighteen years of age in the compliance 12 effort. 13 b. For the purposes of this subsection , “law enforcement 14 officer” means a peace officer as defined in section 801.4 and 15 includes persons designated under subsection 4 to enforce this 16 section . 17 Sec. 3. Section 453A.4, subsection 1, Code 2015, is amended 18 to read as follows: 19 1. If a person holding a permit under this chapter or an 20 employee of such a permittee has a reasonable belief based on 21 factual evidence that a driver’s license as defined in section 22 321.1, subsection 20A, or nonoperator’s identification card 23 issued pursuant to section 321.190 offered by a person who 24 wishes to purchase tobacco, tobacco products, alternative 25 nicotine products, vapor products, or cigarettes is altered 26 or falsified or belongs to another person, the permittee or 27 employee may retain the driver’s license or nonoperator’s 28 identification card. Within twenty-four hours, the card shall 29 be delivered to the appropriate city or county law enforcement 30 agency of the jurisdiction in which the permittee’s premises 31 are located, and the permittee shall file a written report of 32 the circumstances under which the card was retained. The local 33 law enforcement agency may investigate whether a violation 34 of section 321.216 , 321.216A , or 321.216C has occurred. If 35 -3- LSB 2273HH (5) 86 pf/nh 3/ 10

H.F. 306 an investigation is not initiated or probable cause is not 1 established by the local law enforcement agency, the driver’s 2 license or nonoperator’s identification card shall be delivered 3 to the person to whom it was issued. The local law enforcement 4 agency may forward the card with the report to the state 5 department of transportation for investigation, in which 6 case, the state department of transportation may investigate 7 whether a violation of section 321.216 , 321.216A , or 321.216C 8 has occurred. The state department of transportation shall 9 return the card to the person to whom it was issued if an 10 investigation is not initiated or probable cause is not 11 established. 12 Sec. 4. Section 453A.5, subsection 1, Code 2015, is amended 13 to read as follows: 14 1. The alcoholic beverages division of the department of 15 commerce shall develop a tobacco compliance employee training 16 program not to exceed two hours in length for employees and 17 prospective employees of retailers, as defined in sections 18 453A.1 and 453A.42 , to inform the employees about state and 19 federal laws and regulations regarding the sale of tobacco, 20 tobacco products, alternative nicotine products, vapor 21 products, and cigarettes to persons under eighteen years of 22 age and compliance with and the importance of laws regarding 23 the sale of tobacco, tobacco products, alternative nicotine 24 products, vapor products, and cigarettes to persons under 25 eighteen years of age. 26 Sec. 5. Section 453A.13, subsections 1, 6, 9, and 10, Code 27 2015, are amended to read as follows: 28 1. Permits required. Every distributor, wholesaler, 29 cigarette vendor, and retailer, now engaged or who desires to 30 become engaged in the sale or use of cigarettes, upon which a 31 tax is required to be paid, and every retailer now engaged or 32 who desires to become engaged in selling, offering for sale, or 33 distributing alternative nicotine products or vapor products 34 shall obtain a state or retail permit as a distributor, 35 -4- LSB 2273HH (5) 86 pf/nh 4/ 10

H.F. 306 wholesaler, cigarette vendor, or retailer, as the case may be. 1 6. No sales without permit. A distributor, wholesaler, 2 cigarette vendor, or retailer shall not sell any cigarettes , 3 alternative nicotine products, or vapor products until such 4 application has been filed and the fee prescribed paid for a 5 permit and until such permit is obtained and only while such 6 permit is unrevoked and unexpired. 7 9. Permit —— form and contents. Each permit issued shall 8 describe clearly the place of business for which it is issued, 9 shall be nonassignable, consecutively numbered, designating the 10 kind of permit, and shall authorize the sale of cigarettes , 11 alternative nicotine products, or vapor products in this 12 state subject to the limitations and restrictions herein 13 contained. The retail permits shall be upon forms furnished by 14 the department or on forms made available or approved by the 15 department. 16 10. Permit displayed. The permit shall, at all times, 17 be publicly displayed by the distributor, wholesaler, or 18 retailer at the place of business so as to be easily seen by 19 the public and the persons authorized to inspect the place 20 of business. The proprietor or keeper of any building or 21 place where cigarettes , alternative nicotine products, vapor 22 products, or tobacco products are kept for sale, or with intent 23 to sell, shall upon request of any agent of the department or 24 any peace officer exhibit the permit. A refusal or failure to 25 exhibit the permit is prima facie evidence that the cigarettes, 26 alternative nicotine products, vapor products, tobacco, or 27 tobacco products are kept for sale or with intent to sell in 28 violation of this division . 29 Sec. 6. Section 453A.36, subsection 6, Code 2015, is amended 30 to read as follows: 31 6. Any sales of tobacco, tobacco products, alternative 32 nicotine products, vapor products, or cigarettes made through a 33 cigarette vending machine are subject to rules and penalties 34 relative to retail sales of tobacco, tobacco products, 35 -5- LSB 2273HH (5) 86 pf/nh 5/ 10

H.F. 306 alternative nicotine products, vapor products, and cigarettes 1 provided for in this chapter . Cigarettes shall not be sold 2 through any cigarette vending machine unless the cigarettes 3 have been properly stamped or metered as provided by this 4 division , and in case of violation of this provision, the 5 permit of the dealer authorizing retail sales of cigarettes 6 shall be revoked. Payment of the permit fee as provided 7 in section 453A.13 authorizes a cigarette vendor to sell 8 tobacco, tobacco products, alternative nicotine products, vapor 9 products, and cigarettes through vending machines. However, 10 tobacco, tobacco products, alternative nicotine products, vapor 11 products, and cigarettes shall not be sold through a vending 12 machine unless the vending machine is located in a place where 13 the retailer ensures that no person younger than eighteen 14 years of age is present or permitted to enter at any time. 15 Tobacco, tobacco products, alternative nicotine products, 16 vapor products, and cigarettes shall not be sold through 17 any cigarette vending machine if such products are placed 18 together with any nontobacco product, other than matches, in 19 the cigarette vending machine. This section does not require 20 a retail permit holder to buy a cigarette vendor’s permit if 21 the retail permit holder is in fact the owner of the cigarette 22 vending machines and the machines are operated in the location 23 described in the retail permit. 24 Sec. 7. Section 453A.36, subsection 7, paragraph a, Code 25 2015, is amended to read as follows: 26 a. It shall be unlawful for a person other than a retailer 27 as defined in section 453A.1 or 453A.42 who holds a valid 28 retail permit, as applicable, to sell tobacco, tobacco 29 products, alternative nicotine products, vapor products, or 30 cigarettes at retail. 31 Sec. 8. Section 453A.36A, subsection 1, Code 2015, is 32 amended to read as follows: 33 1. Except as provided in section 453A.36, subsection 6 , 34 a retailer shall not sell or offer for sale tobacco, tobacco 35 -6- LSB 2273HH (5) 86 pf/nh 6/ 10

H.F. 306 products, alternative nicotine products, vapor products, or 1 cigarettes through the use of a self-service display. 2 Sec. 9. Section 453A.39, Code 2015, is amended to read as 3 follows: 4 453A.39 Tobacco, tobacco products, alternative nicotine 5 products, vapor products, and cigarette samples —— restrictions 6 —— administration. 7 1. A manufacturer, distributor, wholesaler, retailer, or 8 distributing agent, or agent thereof, shall not give away 9 cigarettes or tobacco products at any time in connection with 10 the manufacturer’s, distributor’s, wholesaler’s, retailer’s, or 11 distributing agent’s business or for promotion of the business 12 or product, 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 tobacco, tobacco products, alternative nicotine products, vapor 30 products, or cigarettes to any person under eighteen years of 31 age, or within five hundred feet of any playground, school, 32 high school, or other facility when such facility is being 33 used primarily by persons under age eighteen for recreational, 34 educational, or other purposes. 35 -7- LSB 2273HH (5) 86 pf/nh 7/ 10

H.F. 306 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. 10. Section 453A.42, subsections 10 and 15, Code 2015, 5 are amended to read as follows: 6 10. “Retailer” means any person engaged in the business 7 of selling tobacco , or tobacco products , alternative nicotine 8 products, or vapor products to ultimate consumers. 9 15. “Tobacco products” means any product, or component, 10 part, or accessory of such product, containing, made in 11 whole or in part from, ordinarily derived from, or designed 12 to deliver tobacco, a tobacco substitute, or nicotine, and 13 intended for human consumption whether by chewing, absorbing, 14 dissolving, inhaling, snorting, sniffing, ingesting, or 15 vaporizing or by any other means. “Tobacco products” includes 16 but is not limited to alternative nicotine products and 17 vapor products; cigars; little cigars as defined herein ; 18 cheroots; stogies; periques; granulated, plug cut, crimp 19 cut, ready rubbed, and other smoking tobacco; snuff ; snuff 20 flour ; cavendish; plug and twist tobacco; fine-cut and other 21 chewing tobaccos; shorts; refuse scraps, clippings, cuttings , 22 and sweepings of tobacco , ; and other kinds and forms of 23 tobacco , prepared in such manner as to be suitable for chewing 24 or smoking in a pipe or otherwise, or both for chewing and 25 smoking ; but shall not include cigarettes as defined in section 26 453A.1, subsection 4 . 27 Sec. 11. Section 453A.47A, subsections 1, 2, 4, and 5, Code 28 2015, are amended to read as follows: 29 1. Permits required. A person shall not engage in the 30 business of a retailer of tobacco , or tobacco products , 31 alternative nicotine products, or vapor products at any 32 place of business without first having received a permit as a 33 retailer. 34 2. No sales without permit. A retailer shall not sell any 35 -8- LSB 2273HH (5) 86 pf/nh 8/ 10

H.F. 306 tobacco , or tobacco products , alternative nicotine products, or 1 vapor products until an application has been filed and the fee 2 prescribed paid for a permit and until such permit is obtained 3 and only while such permit is not suspended, unrevoked, or 4 unexpired. 5 4. Retailer —— multiple permits not required —— effect of 6 suspension. A retailer, as defined in section 453A.1 , who holds 7 a permit under division I of this chapter is not required to 8 also obtain a retail permit under this division . However, 9 if a retailer, as defined in section 453A.1 , only holds a 10 permit under division I of this chapter and that permit is 11 suspended, revoked, or expired, the retailer shall not sell any 12 tobacco , or tobacco products , alternative nicotine products, or 13 vapor products during the time which the permit is suspended, 14 revoked, or expired. 15 5. Separate permit. A separate retail permit shall be 16 required of a distributor or subjobber if the distributor or 17 subjobber sells tobacco , or tobacco products , alternative 18 nicotine products, or vapor products at retail. 19 Sec. 12. Section 453A.47A, subsection 10, paragraph b, Code 20 2015, is amended to read as follows: 21 b. Every retailer shall, when requested by the department, 22 make additional reports as the department deems necessary and 23 proper and shall at the request of the department furnish full 24 and complete information pertaining to any transaction of the 25 retailer involving the purchase or sale or use of tobacco , 26 or tobacco products , alternative nicotine products, or vapor 27 products . 28 Sec. 13. CODE EDITOR DIRECTIVE. The Code editor shall do 29 all of the following: 30 1. Modify the title of chapter 453A to read “Cigarette and 31 Tobacco Taxes and Regulation”. 32 2. Modify the subheading of division I of chapter 453A to 33 read “Cigarettes”. 34 3. Modify the subheading of division II of chapter 453A to 35 -9- LSB 2273HH (5) 86 pf/nh 9/ 10

H.F. 306 read “Cigars, Tobacco, and Tobacco Products”. 1 4. Modify the heading of section 805.8C, subsection 3, to 2 read “Violations related to smoking, tobacco products, and 3 cigarettes”. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill redefines alternative nicotine and vapor products 8 as tobacco products, thereby making applicable to alternative 9 nicotine products and vapor products all provisions applicable 10 to tobacco products including taxation of such products. The 11 bill makes conforming changes throughout the Code to redefine 12 these products. 13 -10- LSB 2273HH (5) 86 pf/nh 10/ 10