H.F. 2523 Section 1. Section 321.216C, Code 2022, is amended to read 1 as follows: 2 321.216C Use of driver’s license or nonoperator’s 3 identification card by underage person to obtain tobacco, tobacco 4 products, alternative nicotine products, vapor products, or 5 cigarettes. 6 A person who is under the age of twenty-one, who alters 7 or displays or has in the person’s possession a fictitious 8 or fraudulently altered driver’s license or nonoperator’s 9 identification card and who uses the license or card to violate 10 or attempt to violate section 453A.2, subsection 2 , commits a 11 simple misdemeanor punishable as a scheduled violation under 12 section 805.8A, subsection 4 . The court shall forward a copy 13 of the conviction to the department. 14 Sec. 2. Section 423.3, subsection 57, paragraph h, Code 15 2022, is amended to read as follows: 16 h. “Tobacco” means cigarettes , cigars, chewing or pipe 17 tobacco, or any other item that contains and tobacco products 18 as defined in section 453A.1 . 19 Sec. 3. Section 453A.1, subsections 1, 23, and 28, Code 20 2022, are amended to read as follows: 21 1. “Alternative nicotine product” means a product, not 22 consisting of or containing tobacco, that provides for the 23 ingestion into the body of nicotine, whether by chewing, 24 absorbing, dissolving, inhaling, snorting, or sniffing, or 25 by any other means. “Alternative nicotine product” does not 26 include cigarettes, tobacco products, or vapor products, or a 27 product that is regulated as a drug or device approved by the 28 United States food and drug administration under chapter V of 29 the federal Food, Drug, and Cosmetic Act for sale as a tobacco 30 cessation product, as a tobacco dependence product, or for 31 other medical purpose, and that is marketed and sold solely for 32 that approved purpose . 33 23. “Retailer” shall mean and include every person in 34 this state who shall sell, distribute, or offer for sale for 35 -1- LSB 1515HV (4) 89 pf/jh 1/ 15

H.F. 2523 consumption or possess for the purpose of sale for consumption, 1 cigarettes , alternative nicotine products, or vapor products 2 irrespective of quantity or amount or the number of sales ; and 3 every person within or without the state that conducts delivery 4 sales . 5 28. “Tobacco products” means cigars; little cigars as 6 defined in section 453A.42, subsection 6 ; alternative nicotine 7 products; vapor products; cheroots; stogies; periques; 8 granulated ; , plug cut, crimp cut, ready rubbed, and other 9 smoking tobacco; snuff, snuff flour; cavendish; plug and twist 10 tobacco; fine-cut and other chewing tobaccos; shorts; or refuse 11 scraps, clippings, cuttings and sweepings of tobacco, and other 12 kinds and forms of tobacco, prepared in such manner as to be 13 suitable for chewing or smoking in a pipe or otherwise, or both 14 for chewing and smoking; but does not mean cigarettes. 15 Sec. 4. Section 453A.2, subsections 1, 2, 3, and 8, Code 16 2022, are amended to read as follows: 17 1. A person shall not sell, give, or otherwise supply any 18 tobacco, tobacco products, alternative nicotine products, vapor 19 products, or cigarettes to any person under twenty-one years 20 of age. 21 2. A person under twenty-one years of age shall not 22 smoke, use, possess, purchase, or attempt to purchase any 23 tobacco, tobacco products, alternative nicotine products, vapor 24 products, or cigarettes. 25 3. Possession of tobacco, tobacco products, alternative 26 nicotine products, vapor products, or cigarettes by an 27 individual under twenty-one years of age does not constitute a 28 violation under this section if the individual under twenty-one 29 years of age possesses the tobacco, tobacco products, 30 alternative nicotine products, vapor products, or cigarettes 31 as part of the individual’s employment and the individual 32 is employed by a person who holds a valid permit under this 33 chapter or who lawfully offers for sale or sells cigarettes or 34 tobacco products. 35 -2- LSB 1515HV (4) 89 pf/jh 2/ 15

H.F. 2523 8. a. A person shall not be guilty of a violation of this 1 section if conduct that would otherwise constitute a violation 2 is performed to assess compliance with tobacco, tobacco 3 products, alternative nicotine products, vapor products, or 4 cigarette laws if any of the following applies: 5 (1) The compliance effort is conducted by or under the 6 supervision of law enforcement officers. 7 (2) The compliance effort is conducted with the advance 8 knowledge of law enforcement officers and reasonable measures 9 are adopted by those conducting the effort to ensure that use 10 of tobacco, tobacco products, alternative nicotine products, 11 vapor products, or cigarettes by individuals under twenty-one 12 years of age does not result from participation by any 13 individual under twenty-one years of age in the compliance 14 effort. 15 b. For the purposes of this subsection , “law enforcement 16 officer” means a peace officer as defined in section 801.4 and 17 includes persons designated under subsection 4 to enforce this 18 section . 19 Sec. 5. Section 453A.4, subsection 1, Code 2022, is amended 20 to read as follows: 21 1. If a person holding a permit under this chapter or an 22 employee of such a permittee has a reasonable belief based on 23 factual evidence that a driver’s license as defined in section 24 321.1, subsection 20A, or nonoperator’s identification card 25 issued pursuant to section 321.190 offered by a person who 26 wishes to purchase tobacco, tobacco products, alternative 27 nicotine products, vapor products, or cigarettes is altered 28 or falsified or belongs to another person, the permittee or 29 employee may retain the driver’s license or nonoperator’s 30 identification card. Within twenty-four hours, the card shall 31 be delivered to the appropriate city or county law enforcement 32 agency of the jurisdiction in which the permittee’s premises 33 are located, and the permittee shall file a written report of 34 the circumstances under which the card was retained. The local 35 -3- LSB 1515HV (4) 89 pf/jh 3/ 15

H.F. 2523 law enforcement agency may investigate whether a violation 1 of section 321.216 , 321.216A , or 321.216C has occurred. If 2 an investigation is not initiated or probable cause is not 3 established by the local law enforcement agency, the driver’s 4 license or nonoperator’s identification card shall be delivered 5 to the person to whom it was issued. The local law enforcement 6 agency may forward the card with the report to the state 7 department of transportation for investigation, in which 8 case, the state department of transportation may investigate 9 whether a violation of section 321.216 , 321.216A , or 321.216C 10 has occurred. The state department of transportation shall 11 return the card to the person to whom it was issued if an 12 investigation is not initiated or probable cause is not 13 established. 14 Sec. 6. Section 453A.5, subsection 1, Code 2022, is amended 15 to read as follows: 16 1. The alcoholic beverages division of the department of 17 commerce shall develop a tobacco compliance employee training 18 program not to exceed two hours in length for employees and 19 prospective employees of retailers, as defined in sections 20 453A.1 and 453A.42 , to inform the employees about state and 21 federal laws and regulations regarding the sale of tobacco, 22 tobacco products, alternative nicotine products, vapor 23 products, and cigarettes to persons under twenty-one years of 24 age and compliance with and the importance of laws regarding 25 the sale of tobacco, tobacco products, alternative nicotine 26 products, vapor products, and cigarettes to persons under 27 twenty-one years of age. 28 Sec. 7. Section 453A.13, subsections 1, 6, 9, and 10, Code 29 2022, are amended to read as follows: 30 1. Permits required. Every distributor, wholesaler, 31 cigarette vendor, and retailer, now engaged or who desires to 32 become engaged in the sale or use of cigarettes, upon which a 33 tax is required to be paid, and every retailer now engaged or 34 who desires to become engaged in selling, offering for sale, or 35 -4- LSB 1515HV (4) 89 pf/jh 4/ 15

H.F. 2523 distributing alternative nicotine products or vapor products , 1 including through delivery sales, shall obtain a state or 2 retail permit as a distributor, wholesaler, cigarette vendor, 3 or retailer, as the case may be. 4 6. No sales without permit. A distributor, wholesaler, 5 cigarette vendor, or retailer shall not sell any cigarettes, 6 or sell, offer for sale, or distribute alternative nicotine 7 products , or vapor products through delivery sales, until such 8 application has been filed and the fee prescribed paid for a 9 permit and until such permit is obtained and only while such 10 permit is unrevoked and unexpired. 11 9. Permit —— form and contents. Each permit issued shall 12 describe clearly the place of business for which it is issued, 13 shall be nonassignable, consecutively numbered, designating the 14 kind of permit, and shall authorize the sale of cigarettes, or 15 the selling, offering for sale, or distributing of alternative 16 nicotine products , or vapor products through delivery sales in 17 this state subject to the limitations and restrictions herein 18 contained. The retail permits shall be upon forms furnished by 19 the department or on forms made available or approved by the 20 department. 21 10. Permit displayed. The permit shall, at all times, be 22 publicly displayed by the distributor, wholesaler, or retailer 23 at the place of business so as to be easily seen by the public 24 and the persons authorized to inspect the place of business. 25 The proprietor or keeper of any building or place where 26 cigarettes, alternative nicotine products, vapor products, 27 tobacco, or tobacco products are kept for sale, or with intent 28 to sell, shall upon request of any agent of the department or 29 any peace officer exhibit the permit. A refusal or failure to 30 exhibit the permit is prima facie evidence that the cigarettes, 31 alternative nicotine products, vapor products, tobacco, or 32 tobacco products are kept for sale or with intent to sell in 33 violation of this subchapter . 34 Sec. 8. Section 453A.35, subsection 1, paragraph b, Code 35 -5- LSB 1515HV (4) 89 pf/jh 5/ 15

H.F. 2523 2022, is amended to read as follows: 1 b. The revenues generated from the tax on cigarettes 2 pursuant to section 453A.6, subsection 1 , and from the tax on 3 tobacco products as specified in section 453A.43, subsections 4 1, 2, 3, and 4 , 5, and 6 shall be credited to the health care 5 trust fund created in section 453A.35A . 6 Sec. 9. Section 453A.35A, Code 2022, is amended to read as 7 follows: 8 453A.35A Health care trust fund. 9 1. A health care trust fund is created in the office of 10 the treasurer of state. The fund consists of the revenues 11 generated from the tax on cigarettes pursuant to section 12 453A.6, subsection 1 , and from the tax on tobacco products 13 as specified in section 453A.43, subsections 1, 2, 3, and 4 , 14 5, and 6 that are credited to the health care trust fund, 15 annually, pursuant to section 453A.35 . Moneys in the fund 16 shall be separate from the general fund of the state and shall 17 not be considered part of the general fund of the state. 18 However, the fund shall be considered a special account for 19 the purposes of section 8.53 relating to generally accepted 20 accounting principles. Moneys in the fund shall be used only 21 as specified in this section and shall be appropriated only 22 for the uses specified. Moneys in the fund are not subject to 23 section 8.33 and shall not be transferred, used, obligated, 24 appropriated, or otherwise encumbered, except as provided in 25 this section . Notwithstanding section 12C.7, subsection 2 , 26 interest or earnings on moneys deposited in the fund shall be 27 credited to the fund. 28 2. a. Moneys in the fund shall be used only for purposes 29 related to health care, substance abuse treatment and 30 prevention, and tobacco use prevention, cessation, and control , 31 and as provided for in paragraph “b” . 32 b. Moneys credited to the fund from the tax on alternative 33 nicotine products and vapor products as specified in section 34 453A.43, subsections 5 and 6, annually, shall be appropriated 35 -6- LSB 1515HV (4) 89 pf/jh 6/ 15

H.F. 2523 and used as follows: 1 (1) The amount credited to the fund that constitutes the 2 amount generated from the rate of seventeen percent of the 3 overall rate of twenty-two percent of the wholesale sales price 4 or cost of these products is appropriated to the judicial 5 branch to be used to fund civil and criminal specialty courts 6 involving individuals with substance use disorder or mental 7 health issues. 8 (2) The amount credited to the fund that constitutes the 9 amount generated from the rate of five percent of the overall 10 rate of twenty-two percent of the wholesale sales price or cost 11 of these products is appropriated to the department of public 12 health for tobacco use prevention and control efforts pursuant 13 to chapter 142A. 14 Sec. 10. Section 453A.36, subsection 6, Code 2022, is 15 amended to read as follows: 16 6. Any sales of tobacco, tobacco products, alternative 17 nicotine products, vapor products, or cigarettes made through a 18 cigarette vending machine are subject to rules and penalties 19 relative to retail sales of tobacco, tobacco products, 20 alternative nicotine products, vapor products, and cigarettes 21 provided for in this chapter . Cigarettes shall not be sold 22 through any cigarette vending machine unless the cigarettes 23 have been properly stamped or metered as provided by this 24 subchapter , and in case of violation of this provision, the 25 permit of the dealer authorizing retail sales of cigarettes 26 shall be revoked. Payment of the permit fee as provided 27 in section 453A.13 authorizes a cigarette vendor to sell 28 tobacco, tobacco products, alternative nicotine products, vapor 29 products, and cigarettes through vending machines. However, 30 tobacco, tobacco products, alternative nicotine products, vapor 31 products, and cigarettes shall not be sold through a vending 32 machine unless the vending machine is located in a place where 33 the retailer ensures that no person younger than twenty-one 34 years of age is present or permitted to enter at any time. 35 -7- LSB 1515HV (4) 89 pf/jh 7/ 15

H.F. 2523 Tobacco, tobacco products, alternative nicotine products, 1 vapor products, and cigarettes shall not be sold through 2 any cigarette vending machine if such products are placed 3 together with any nontobacco product, other than matches, in 4 the cigarette vending machine. This section does not require 5 a retail permit holder to buy a cigarette vendor’s permit if 6 the retail permit holder is in fact the owner of the cigarette 7 vending machines and the machines are operated in the location 8 described in the retail permit. 9 Sec. 11. Section 453A.36, subsection 7, paragraph a, Code 10 2022, is amended to read as follows: 11 a. It shall be unlawful for a person other than a retailer 12 as defined in section 453A.1 or 453A.42 who holds a valid 13 retail permit, as applicable, to sell tobacco, tobacco 14 products, alternative nicotine products, vapor products, or 15 cigarettes at retail. 16 Sec. 12. Section 453A.36A, subsection 1, Code 2022, is 17 amended to read as follows: 18 1. Except as provided in section 453A.36, subsection 6 , 19 a retailer shall not sell or offer for sale tobacco, tobacco 20 products, alternative nicotine products, vapor products, or 21 cigarettes through the use of a self-service display. 22 Sec. 13. Section 453A.39, Code 2022, is amended to read as 23 follows: 24 453A.39 Tobacco, tobacco products, alternative nicotine 25 products, vapor products, and cigarette samples —— restrictions 26 —— administration. 27 1. A manufacturer, distributor, wholesaler, retailer, or 28 distributing agent, or agent thereof, shall not give away 29 cigarettes or tobacco products at any time in connection with 30 the manufacturer’s, distributor’s, wholesaler’s, retailer’s, or 31 distributing agent’s business or for promotion of the business 32 or product, except as provided in subsection 2 . 33 2. a. All cigarette samples shall be shipped only to a 34 distributor that has a permit to stamp cigarettes or little 35 -8- LSB 1515HV (4) 89 pf/jh 8/ 15

H.F. 2523 cigars with Iowa tax. All cigarette samples must have a 1 cigarette stamp. The manufacturer shipping samples under this 2 section shall send an affidavit to the director stating the 3 shipment information, including the date shipped, quantity, and 4 to whom the samples were shipped. The distributor receiving 5 the shipment shall send an affidavit to the director stating 6 the shipment information, including the date shipped, quantity, 7 and from whom the samples were shipped. These affidavits shall 8 be duly notarized and submitted to the director at the time of 9 shipment and receipt of the samples. The distributor shall 10 pay the tax on samples by separate remittance along with the 11 affidavit. 12 b. A manufacturer, distributor, wholesaler, retailer, or 13 distributing agent or agent thereof shall not give away any 14 tobacco, tobacco products, alternative nicotine products, vapor 15 products, or cigarettes to any person under twenty-one years 16 of age, or within five hundred feet of any playground, school, 17 high school, or other facility when such facility is being used 18 primarily by persons under age twenty-one for recreational, 19 educational, or other purposes. 20 c. Proof of age shall be required if a reasonable person 21 could conclude on the basis of outward appearance that a 22 prospective recipient of a sample may be under twenty-one years 23 of age. 24 Sec. 14. Section 453A.42, subsection 3, Code 2022, is 25 amended by striking the subsection and inserting in lieu 26 thereof the following: 27 3. “Delivery sale” means the same as defined in section 28 453A.1. 29 Sec. 15. Section 453A.42, subsections 9 and 11, Code 2022, 30 are amended to read as follows: 31 9. “Place of business” means any place where tobacco 32 products are sold or where tobacco products are manufactured, 33 stored, or kept for the purpose of sale or consumption, 34 including any vessel, vehicle, airplane, train, or vending 35 -9- LSB 1515HV (4) 89 pf/jh 9/ 15

H.F. 2523 machine; or for a business within or without the state that 1 conducts delivery sales, any place where alternative nicotine 2 products or vapor products are sold or where alternative 3 nicotine products or vapor products are kept for the purpose of 4 sale , including delivery sales . 5 11. “Retailer” means any person engaged in the business 6 of selling tobacco , or tobacco products , alternative nicotine 7 products, or vapor products to ultimate consumers ; and every 8 person within or without the state that conducts delivery 9 sales . 10 Sec. 16. Section 453A.42, subsection 16, Code 2022, is 11 amended by striking the subsection and inserting in lieu 12 thereof the following: 13 16. “Tobacco products” means the same as defined in section 14 453A.1. 15 Sec. 17. Section 453A.42, Code 2022, is amended by adding 16 the following new subsections: 17 NEW SUBSECTION . 01. “Alternative nicotine product” means 18 the same as defined in section 453A.1. 19 NEW SUBSECTION . 17A. “Vapor product” means the same as 20 defined in section 453A.1. 21 Sec. 18. Section 453A.43, Code 2022, is amended to read as 22 follows: 23 453A.43 Tax on tobacco products. 24 1. a. A tax is imposed upon all tobacco products in this 25 state and upon any person engaged in business as a distributor 26 of tobacco products, at the rate of twenty-two percent of 27 the wholesale sales price of the tobacco products, except 28 alternative nicotine products, vapor products, little cigars , 29 and snuff as defined in section 453A.42 . 30 b. In addition to the tax imposed under paragraph “a” , a 31 tax is imposed upon all tobacco products in this state and upon 32 any person engaged in business as a distributor of tobacco 33 products, at the rate of twenty-eight percent of the wholesale 34 sales price of the tobacco products, except alternative 35 -10- LSB 1515HV (4) 89 pf/jh 10/ 15

H.F. 2523 nicotine products, vapor products, little cigars , and snuff as 1 defined in section 453A.42 . 2 c. Notwithstanding the rate of tax imposed pursuant to 3 paragraphs “a” and “b” , if the tobacco product is a cigar, the 4 total amount of the tax imposed pursuant to paragraphs “a” and 5 “b” combined shall not exceed fifty cents per cigar. 6 d. Little cigars shall be subject to the same rate of tax 7 imposed upon cigarettes in section 453A.6 , payable at the time 8 and in the manner provided in section 453A.6 ; and stamps shall 9 be affixed as provided in subchapter I of this chapter . Snuff 10 shall be subject to the tax as provided in subsections 3 and 4 . 11 e. The taxes on tobacco products, excluding little cigars 12 and snuff, shall be imposed at the time the distributor does 13 any of the following: 14 (1) Brings, or causes to be brought, into this state from 15 outside the state tobacco products for sale. 16 (2) Makes, manufactures, or fabricates tobacco products in 17 this state for sale in this state. 18 (3) Ships or transports tobacco products to retailers in 19 this state, to be sold by those retailers. 20 2. a. A tax is imposed upon the use or storage by consumers 21 of tobacco products except alternative nicotine products, vapor 22 products, little cigars, and snuff in this state, and upon the 23 consumers, at the rate of twenty-two percent of the cost of the 24 tobacco products. 25 b. In addition to the tax imposed in paragraph “a” , a tax 26 is imposed upon the use or storage by consumers of tobacco 27 products except alternative nicotine products, vapor products, 28 little cigars, and snuff in this state, and upon the consumers, 29 at a rate of twenty-eight percent of the cost of the tobacco 30 products. 31 c. Notwithstanding the rate of tax imposed pursuant to 32 paragraphs “a” and “b” , if the tobacco product is a cigar, the 33 total amount of the tax imposed pursuant to paragraphs “a” and 34 “b” combined shall not exceed fifty cents per cigar. 35 -11- LSB 1515HV (4) 89 pf/jh 11/ 15

H.F. 2523 d. The taxes imposed by this subsection shall not apply 1 if the taxes imposed by subsection 1 on the specified tobacco 2 products have been paid. 3 e. The taxes imposed under this subsection shall not apply 4 to the use or storage of tobacco products in quantities of: 5 (1) Less than twenty-five cigars. 6 (2) Less than one pound smoking or chewing tobacco or other 7 tobacco products not specifically mentioned herein, in the 8 possession of any one consumer. 9 3. A tax is imposed upon all snuff in this state and upon 10 any person engaged in business as a distributor of snuff at 11 the rate of one dollar and nineteen cents per ounce, with a 12 proportionate tax at the same rate on all fractional parts of 13 an ounce of snuff. The tax shall be computed based on the net 14 weight listed by the manufacturer. The tax on snuff shall be 15 imposed at the time the distributor does any of the following: 16 a. Brings or causes to be brought into this state from 17 outside the state, snuff for sale. 18 b. Makes, manufactures, or fabricates snuff in this state 19 for sale in this state. 20 c. Ships or transports snuff to retailers in this state, to 21 be sold by those retailers. 22 4. a. A tax is imposed upon the use or storage by consumers 23 of snuff in this state, and upon the consumers, at the rate of 24 one dollar and nineteen cents per ounce with a proportionate 25 tax at the same rate on all fractional parts of an ounce of 26 snuff. The tax shall be computed based on the net weight as 27 listed by the manufacturer. 28 b. The tax imposed by this subsection shall not apply if the 29 tax imposed by subsection 3 on snuff has been paid. 30 c. The tax imposed by this subsection shall not apply to the 31 use or storage of snuff in quantities of less than ten ounces. 32 5. A tax is imposed upon all tobacco products that are 33 alternative nicotine products or vapor products in this state 34 and upon any person engaged in business as a distributor of 35 -12- LSB 1515HV (4) 89 pf/jh 12/ 15

H.F. 2523 alternative nicotine products or vapor products, at the rate 1 of twenty-two percent of the wholesale sales price of the 2 alternative nicotine product or vapor product. 3 6. A tax is imposed upon the use or storage by consumers 4 of tobacco products that are alternative nicotine products 5 or vapor products in this state, and upon the consumers, at 6 the rate of twenty-two percent of the cost of the alternative 7 nicotine product or vapor product. The tax imposed by this 8 subsection shall not apply if the tax imposed by subsection 5 9 on alternative nicotine products or vapor products has been 10 paid. 11 7. The taxes on tobacco products, excluding little cigars 12 and snuff, shall be imposed at the time the distributor does 13 any of the following: 14 a. Brings, or causes to be brought, into this state from 15 outside the state tobacco products for sale. 16 b. Makes, manufactures, or fabricates tobacco products in 17 this state for sale in this state. 18 c. Ships or transports tobacco products to retailers in this 19 state, to be sold by those retailers. 20 5. 8. Any tobacco product with respect to which a tax has 21 once been imposed under this subchapter shall not again be 22 subject to tax under this subchapter , except as provided in 23 section 453A.40 . 24 6. 9. The tax imposed by this section shall not apply with 25 respect to any tobacco product which under the Constitution 26 and laws of the United States may not be made the subject of 27 taxation by this state. 28 7. 10. The tax imposed by this section shall be in addition 29 to all other occupation or privilege taxes or license fees now 30 or hereafter imposed by any city or county. 31 8. 11. All excise taxes collected under this chapter by a 32 distributor or any individual are deemed to be held in trust 33 for the state of Iowa. 34 Sec. 19. Section 453A.47A, subsections 1, 2, 4, and 5, Code 35 -13- LSB 1515HV (4) 89 pf/jh 13/ 15

H.F. 2523 2022, are amended to read as follows: 1 1. Permits required. A person shall not engage in the 2 business of a retailer of tobacco , or tobacco products , 3 alternative nicotine products, or vapor products at any place 4 of business, or through delivery sales, without first having 5 received a permit as a retailer. 6 2. No sales without permit. A retailer shall not sell any 7 tobacco , or tobacco products , alternative nicotine products, or 8 vapor products until an application has been filed and the fee 9 prescribed paid for a permit and until such permit is obtained 10 and only while such permit is not suspended, unrevoked, or 11 unexpired. 12 4. Retailer —— multiple permits not required —— effect of 13 suspension. A retailer, as defined in section 453A.1 , who holds 14 a permit under subchapter I of this chapter is not required to 15 also obtain a retail permit under this subchapter . However, 16 if a retailer, as defined in section 453A.1 , only holds a 17 permit under subchapter I of this chapter and that permit is 18 suspended, revoked, or expired, the retailer shall not sell any 19 tobacco , or tobacco products , alternative nicotine products, or 20 vapor products during the time which the permit is suspended, 21 revoked, or expired. 22 5. Separate permit. A separate retail permit shall be 23 required of a distributor or subjobber if the distributor or 24 subjobber sells tobacco , or tobacco products , alternative 25 nicotine products, or vapor products at retail. 26 Sec. 20. Section 453A.47A, subsection 10, paragraph b, Code 27 2022, is amended to read as follows: 28 b. Every retailer shall, when requested by the department, 29 make additional reports as the department deems necessary and 30 proper and shall at the request of the department furnish full 31 and complete information pertaining to any transaction of the 32 retailer involving the purchase or sale or use of tobacco , 33 or tobacco products , alternative nicotine products, or vapor 34 products . 35 -14- LSB 1515HV (4) 89 pf/jh 14/ 15

H.F. 2523 Sec. 21. CODE EDITOR DIRECTIVE. The Code editor shall do 1 all of the following: 2 1. Modify the title of chapter 453A to read “Cigarettes and 3 Tobacco Taxes and Regulation”. 4 2. Modify the subheading of subchapter I of chapter 453A to 5 read “Cigarettes and Tobacco Products”. 6 3. Modify the subheading of subchapter II of chapter 453A to 7 read “Cigars, Tobacco, and Tobacco Products”. 8 4. Modify the heading of section 805.8C, subsection 3, to 9 read “Violations related to smoking, tobacco, tobacco products, 10 and cigarettes”. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill redefines alternative nicotine and vapor products 15 as tobacco products, thereby making applicable to alternative 16 nicotine and vapor products all provisions applicable to 17 tobacco products with the exception of the rate of taxation 18 of such products. Under the bill, these products are taxed 19 at a reduced rate relative to other tobacco products at 22 20 percent of the wholesale sales price or cost. Additionally, 21 the revenue from the tax on these products is credited to 22 the health care trust fund with the amount generated from 17 23 percent of the rate to be used to fund civil and criminal 24 specialty courts involving individuals with substance use 25 disorder or mental health issues and with the amount generated 26 from 5 percent of the rate to be appropriated to the department 27 of public health to be used for tobacco use prevention and 28 control under Code chapter 142A. The bill makes conforming 29 changes throughout the Code to redefine these products. 30 -15- LSB 1515HV (4) 89 pf/jh 15/ 15