HF 306 (LSB 2273HH (5) 86)

HOUSE FILE 306

BY  MASCHER

A BILL FOR

An Act relating to tobacco products, including taxation of such products.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 453A.1, subsections 1, 22, 27, and 28, Code 2015, are amended to read as follows:
   1.  “Alternative nicotine product” means a product, not consisting of or containing tobacco, that provides for the ingestion into the body of nicotine, whether by chewing, absorbing, dissolving, inhaling, snorting, or sniffing, or by any other means. “Alternative nicotine product” does not include cigarettes, tobacco products, or vapor products, or a product that is regulated approved as a drug or device by the United States food and drug administration under chapter V of the federal Food, Drug, and Cosmetic Act.
   22.  “Retailer” shall mean and include every person in this state who shall sell, distribute, or offer for sale for consumption or possess for the purpose of sale for consumption, cigarettes, alternative nicotine products, or vapor products irrespective of quantity or amount or the number of sales.
   27.  “Tobacco products” means any product, or component, part, or accessory of such product, containing, made in whole or in part from, ordinarily derived from, or designed to deliver tobacco, a tobacco substitute, or nicotine, and intended for human consumption whether by chewing, absorbing, dissolving, inhaling, snorting, sniffing, ingesting, or vaporizing or by any other means. “Tobacco products” includes but is not limited to alternative nicotine products and vapor products; cigars; little cigars as defined in section 453A.42, subsection 5; cheroots; stogies; periques; granulated;, plug cut, crimp cut, ready rubbed, and other smoking tobacco; snuff,; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing tobaccos; shorts; or refuse scraps, clippings, cuttings, and sweepings of tobacco,; and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking; but does not mean include cigarettes.
   28.  “Vapor product” means any noncombustible product, which may or may not contain nicotine, that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size, that can be used to produce vapor from a solution or other substance. “Vapor product” includes an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device, and any cartridge or other container of a solution or other substance, which may or may not contain nicotine, that is intended to be used with or in an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device. “Vapor product” does not include a product regulated approved as a drug or device by the United States food and drug administration under chapter V of the federal Food, Drug, and Cosmetic Act.
    Sec. 2.  Section 453A.2, subsections 1, 2, 3, and 8, Code 2015, are amended to read as follows:
   1.  A person shall not sell, give, or otherwise supply any tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes to any person under eighteen years of age.
   2.  A person under eighteen years of age shall not smoke, use, possess, purchase, or attempt to purchase any tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes.
   3.  Possession of tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes by an individual under eighteen years of age does not constitute a violation under this section if the individual under eighteen years of age possesses the tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes as part of the individual’s employment and the individual is employed by a person who holds a valid permit under this chapter or who lawfully offers for sale or sells cigarettes or tobacco products.
   8.  a.  A person shall not be guilty of a violation of this section if conduct that would otherwise constitute a violation is performed to assess compliance with tobacco, tobacco products, alternative nicotine products, vapor products, or cigarette laws if any of the following applies:
   (1)  The compliance effort is conducted by or under the supervision of law enforcement officers.
   (2)  The compliance effort is conducted with the advance knowledge of law enforcement officers and reasonable measures are adopted by those conducting the effort to ensure that use of tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes by individuals under eighteen years of age does not result from participation by any individual under eighteen years of age in the compliance effort.
   b.  For the purposes of this subsection, “law enforcement officer” means a peace officer as defined in section 801.4 and includes persons designated under subsection 4 to enforce this section.
    Sec. 3.  Section 453A.4, subsection 1, Code 2015, is amended to read as follows:
   1.  If a person holding a permit under this chapter or an employee of such a permittee has a reasonable belief based on factual evidence that a driver’s license as defined in section 321.1, subsection 20A, or nonoperator’s identification card issued pursuant to section 321.190 offered by a person who wishes to purchase tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes is altered or falsified or belongs to another person, the permittee or employee may retain the driver’s license or nonoperator’s identification card. Within twenty-four hours, the card shall be delivered to the appropriate city or county law enforcement agency of the jurisdiction in which the permittee’s premises are located, and the permittee shall file a written report of the circumstances under which the card was retained. The local law enforcement agency may investigate whether a violation of section 321.216, 321.216A, or 321.216C has occurred. If an investigation is not initiated or probable cause is not established by the local law enforcement agency, the driver’s license or nonoperator’s identification card shall be delivered to the person to whom it was issued. The local law enforcement agency may forward the card with the report to the state department of transportation for investigation, in which case, the state department of transportation may investigate whether a violation of section 321.216, 321.216A, or 321.216C has occurred. The state department of transportation shall return the card to the person to whom it was issued if an investigation is not initiated or probable cause is not established.
    Sec. 4.  Section 453A.5, subsection 1, Code 2015, is amended to read as follows:
   1.  The alcoholic beverages division of the department of commerce shall develop a tobacco compliance employee training program not to exceed two hours in length for employees and prospective employees of retailers, as defined in sections 453A.1 and 453A.42, to inform the employees about state and federal laws and regulations regarding the sale of tobacco, tobacco products, alternative nicotine products, vapor products, and cigarettes to persons under eighteen years of age and compliance with and the importance of laws regarding the sale of tobacco, tobacco products, alternative nicotine products, vapor products, and cigarettes to persons under eighteen years of age.
    Sec. 5.  Section 453A.13, subsections 1, 6, 9, and 10, Code 2015, are amended to read as follows:
   1.  Permits required.  Every distributor, wholesaler, cigarette vendor, and retailer, now engaged or who desires to become engaged in the sale or use of cigarettes, upon which a tax is required to be paid, and every retailer now engaged or who desires to become engaged in selling, offering for sale, or distributing alternative nicotine products or vapor products shall obtain a state or retail permit as a distributor, wholesaler, cigarette vendor, or retailer, as the case may be.
   6.  No sales without permit.  A distributor, wholesaler, cigarette vendor, or retailer shall not sell any cigarettes, alternative nicotine products, or vapor products until such application has been filed and the fee prescribed paid for a permit and until such permit is obtained and only while such permit is unrevoked and unexpired.
   9.  Permit —— form and contents.  Each permit issued shall describe clearly the place of business for which it is issued, shall be nonassignable, consecutively numbered, designating the kind of permit, and shall authorize the sale of cigarettes, alternative nicotine products, or vapor products in this state subject to the limitations and restrictions herein contained. The retail permits shall be upon forms furnished by the department or on forms made available or approved by the department.
   10.  Permit displayed.  The permit shall, at all times, be publicly displayed by the distributor, wholesaler, or retailer at the place of business so as to be easily seen by the public and the persons authorized to inspect the place of business. The proprietor or keeper of any building or place where cigarettes, alternative nicotine products, vapor products, or tobacco products are kept for sale, or with intent to sell, shall upon request of any agent of the department or any peace officer exhibit the permit. A refusal or failure to exhibit the permit is prima facie evidence that the cigarettes, alternative nicotine products, vapor products, tobacco, or tobacco products are kept for sale or with intent to sell in violation of this division.
    Sec. 6.  Section 453A.36, subsection 6, Code 2015, is amended to read as follows:
   6.  Any sales of tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes made through a cigarette vending machine are subject to rules and penalties relative to retail sales of tobacco, tobacco products, alternative nicotine products, vapor products, and cigarettes provided for in this chapter. Cigarettes shall not be sold through any cigarette vending machine unless the cigarettes have been properly stamped or metered as provided by this division, and in case of violation of this provision, the permit of the dealer authorizing retail sales of cigarettes shall be revoked. Payment of the permit fee as provided in section 453A.13 authorizes a cigarette vendor to sell tobacco, tobacco products, alternative nicotine products, vapor products, and cigarettes through vending machines. However, tobacco, tobacco products, alternative nicotine products, vapor products, and cigarettes shall not be sold through a vending machine unless the vending machine is located in a place where the retailer ensures that no person younger than eighteen years of age is present or permitted to enter at any time. Tobacco, tobacco products, alternative nicotine products, vapor products, and cigarettes shall not be sold through any cigarette vending machine if such products are placed together with any nontobacco product, other than matches, in the cigarette vending machine. This section does not require a retail permit holder to buy a cigarette vendor’s permit if the retail permit holder is in fact the owner of the cigarette vending machines and the machines are operated in the location described in the retail permit.
    Sec. 7.  Section 453A.36, subsection 7, paragraph a, Code 2015, is amended to read as follows:
   a.  It shall be unlawful for a person other than a retailer as defined in section 453A.1 or 453A.42 who holds a valid retail permit, as applicable, to sell tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes at retail.
    Sec. 8.  Section 453A.36A, subsection 1, Code 2015, is amended to read as follows:
   1.   Except as provided in section 453A.36, subsection 6, a retailer shall not sell or offer for sale tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes through the use of a self-service display.
    Sec. 9.  Section 453A.39, Code 2015, is amended to read as follows:
   453A.39  Tobacco, tobacco products, alternative nicotine products, vapor products, and cigarette samples —— restrictions —— administration.
   1.  A manufacturer, distributor, wholesaler, retailer, or distributing agent, or agent thereof, shall not give away cigarettes or tobacco products at any time in connection with the manufacturer’s, distributor’s, wholesaler’s, retailer’s, or distributing agent’s business or for promotion of the business or product, except as provided in subsection 2.
   2.  a.  All cigarette samples shall be shipped only to a distributor that has a permit to stamp cigarettes or little cigars with Iowa tax. All cigarette samples must have a cigarette stamp. The manufacturer shipping samples under this section shall send an affidavit to the director stating the shipment information, including the date shipped, quantity, and to whom the samples were shipped. The distributor receiving the shipment shall send an affidavit to the director stating the shipment information, including the date shipped, quantity, and from whom the samples were shipped. These affidavits shall be duly notarized and submitted to the director at the time of shipment and receipt of the samples. The distributor shall pay the tax on samples by separate remittance along with the affidavit.
   b.  A manufacturer, distributor, wholesaler, retailer, or distributing agent or agent thereof shall not give away any tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes to any person under eighteen years of age, or within five hundred feet of any playground, school, high school, or other facility when such facility is being used primarily by persons under age eighteen for recreational, educational, or other purposes.
   c.  Proof of age shall be required if a reasonable person could conclude on the basis of outward appearance that a prospective recipient of a sample may be under eighteen years of age.
    Sec. 10.  Section 453A.42, subsections 10 and 15, Code 2015, are amended to read as follows:
   10.  “Retailer” means any person engaged in the business of selling tobacco, or tobacco products, alternative nicotine products, or vapor products to ultimate consumers.
   15.  “Tobacco products” means any product, or component, part, or accessory of such product, containing, made in whole or in part from, ordinarily derived from, or designed to deliver tobacco, a tobacco substitute, or nicotine, and intended for human consumption whether by chewing, absorbing, dissolving, inhaling, snorting, sniffing, ingesting, or vaporizing or by any other means. “Tobacco products” includes but is not limited to alternative nicotine products and vapor products; cigars; little cigars as defined herein; cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing tobaccos; shorts; refuse scraps, clippings, cuttings, and sweepings of tobacco,; and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking; but shall not include cigarettes as defined in section 453A.1, subsection 4.
    Sec. 11.  Section 453A.47A, subsections 1, 2, 4, and 5, Code 2015, are amended to read as follows:
   1.  Permits required.  A person shall not engage in the business of a retailer of tobacco, or tobacco products, alternative nicotine products, or vapor products at any place of business without first having received a permit as a retailer.
   2.  No sales without permit.  A retailer shall not sell any tobacco, or tobacco products, alternative nicotine products, or vapor products until an application has been filed and the fee prescribed paid for a permit and until such permit is obtained and only while such permit is not suspended, unrevoked, or unexpired.
   4.  Retailer —— multiple permits not required —— effect of suspension.  A retailer, as defined in section 453A.1, who holds a permit under division I of this chapter is not required to also obtain a retail permit under this division. However, if a retailer, as defined in section 453A.1, only holds a permit under division I of this chapter and that permit is suspended, revoked, or expired, the retailer shall not sell any tobacco, or tobacco products, alternative nicotine products, or vapor products during the time which the permit is suspended, revoked, or expired.
   5.  Separate permit.  A separate retail permit shall be required of a distributor or subjobber if the distributor or subjobber sells tobacco, or tobacco products, alternative nicotine products, or vapor products at retail.
    Sec. 12.  Section 453A.47A, subsection 10, paragraph b, Code 2015, is amended to read as follows:
   b.  Every retailer shall, when requested by the department, make additional reports as the department deems necessary and proper and shall at the request of the department furnish full and complete information pertaining to any transaction of the retailer involving the purchase or sale or use of tobacco, or tobacco products, alternative nicotine products, or vapor products.
    Sec. 13.  CODE EDITOR DIRECTIVE.  The Code editor shall do all of the following:
   1.  Modify the title of chapter 453A to read “Cigarette and Tobacco Taxes and Regulation”.
   2.  Modify the subheading of division I of chapter 453A to read “Cigarettes”.
   3.  Modify the subheading of division II of chapter 453A to read “Cigars, Tobacco, and Tobacco Products”.
   4.  Modify the heading of section 805.8C, subsection 3, to read “Violations related to smoking, tobacco products, and cigarettes”.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill redefines alternative nicotine and vapor products as tobacco products, thereby making applicable to alternative nicotine products and vapor products all provisions applicable to tobacco products including taxation of such products. The bill makes conforming changes throughout the Code to redefine these products.