S.F. _____ Section 1. Section 142D.1, subsection 3, Code 2026, is 1 amended to read as follows: 2 3. The purpose of this chapter is to reduce the level of 3 exposure by the general public and employees to environmental 4 tobacco smoke in order to improve the public health of Iowans , 5 while allowing for limited exceptions . 6 Sec. 2. Section 142D.2, Code 2026, is amended by adding the 7 following new subsection: 8 NEW SUBSECTION . 2A. “Cigar bar” means the same as defined 9 in section 453F.1. 10 Sec. 3. Section 142D.4, Code 2026, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 12. Cigar bars. 13 Sec. 4. NEW SECTION . 453F.1 Definitions. 14 As used in this chapter, unless the context otherwise 15 requires: 16 1. “Alcoholic beverage” means the same as defined in section 17 123.3. 18 2. “Cigar bar” means a retail establishment that meets all 19 of the following criteria: 20 a. Generates at least fifty percent of annual gross revenues 21 from the retail sale of premium cigars and cigar-related 22 products at the place of business, excluding delivery sales, 23 alcoholic beverages, and food. 24 b. Holds a class “C” or special class “C” retail alcohol 25 license pursuant to chapter 123. 26 c. Holds a retailer permit pursuant to section 453A.47A. 27 d. Prohibits the entry of persons under the age of 28 twenty-one years. 29 e. Maintains a walk-in humidor or a humidor with a capacity 30 of storing at least one hundred fifty cigars at the place of 31 business for the retail sale of cigars. 32 f. Clearly and conspicuously posts at every entrance a 33 declaration that smoking is permitted on the premises of the 34 place of business and persons under the age of twenty-one years 35 -1- LSB 6076XC (3) 91 jm/jh 1/ 9

S.F. _____ are prohibited from entry. 1 g. Does not allow the smoking of any other product other 2 than premium cigars. 3 h. Sells only premium cigars and no other types of cigars. 4 3. “Cigar retailer” means a cigar bar that holds a delivery 5 sale permit issued pursuant to this chapter. 6 4. “Delivery sale” means any sale of a premium cigar to 7 a purchaser in this state where the purchaser submits the 8 order for such sale by means of a telephonic or other method 9 of voice transmission, mail or any other delivery service, or 10 the internet or other online service and the premium cigar is 11 delivered by use of mail or a delivery service. “Delivery sale” 12 does not include a sale to a distributor or business. 13 5. “Department” means the department of revenue. 14 6. “Director” means the director of revenue. 15 7. “Place of business” means any place where premium cigars 16 or cigar-related products are sold, stored, or kept for the 17 purpose of sale or consumption; or for a business within the 18 state that conducts delivery sales, any place where premium 19 cigars and cigar-related products are sold or are kept for the 20 purpose of sale, including delivery sales within the state. 21 8. “Premium cigar” means a cigar that is all of the 22 following: 23 a. Wrapped in whole tobacco leaf. 24 b. One hundred percent leaf tobacco binder. 25 c. One hundred percent tobacco filler. 26 d. Handmade or hand rolled. 27 e. Contains only a tobacco tip, with no filter or nontobacco 28 tip or mouthpiece. 29 f. Contains only tobacco, water, and vegetable gum. 30 g. Weighs more than six pounds per one thousand units. 31 9. “Retail establishment” means a place of business where 32 premium cigars and other cigar-related products are sold 33 directly or through delivery sales to consumers. 34 Sec. 5. NEW SECTION . 453F.2 Application —— permit —— fees. 35 -2- LSB 6076XC (3) 91 jm/jh 2/ 9

S.F. _____ 1. A person shall not engage in the business of a cigar 1 retailer at any place of business or through delivery sales, 2 unless the person has received and holds a delivery sale permit 3 pursuant to this section that has not been suspended or revoked 4 and is not expired, and complies with the provisions of this 5 chapter. 6 2. A cigar retailer shall not sell premium cigars through 7 delivery sales until an application has been filed with the 8 department and the fee prescribed paid for a delivery sale 9 permit and until such permit is obtained and only while such 10 permit is not suspended, revoked, or expired. 11 3. An application shall be filed and a delivery sale permit 12 obtained for each place of business owned or operated by a 13 cigar retailer located in the state. 14 4. Upon approval of a delivery sale permit application by 15 the department, the department shall issue the permit to the 16 applicant in a manner determined by the department. 17 5. All delivery sale permits provided for in this section 18 shall expire on June 30 of each year. A delivery sale permit 19 shall not be granted or issued until the applicant has paid the 20 fees provided for in this section for the period ending June 21 30 next, to the department. The fee for a delivery sale permit 22 is twenty-five dollars. 23 6. Delivery sale permits shall be issued only upon 24 application, accompanied by the twenty-five dollar fee, made 25 upon forms furnished by the department. The application, 26 any supporting documentation, and the associated fees 27 required by this section shall be submitted to the department 28 electronically. The application shall specify all of the 29 following: 30 a. The manner under which the cigar retailer transacts or 31 intends to transact business as a cigar retailer. 32 b. The principal office, residence, and place of business, 33 to which the delivery sale permit is to apply. 34 c. If the applicant is not an individual, the names of the 35 -3- LSB 6076XC (3) 91 jm/jh 3/ 9

S.F. _____ partners if the applicant is a partnership or the names of 1 the principal officers or members if the applicant is a legal 2 entity, and their addresses. 3 d. Such other information as the director shall by rule 4 prescribe. 5 Sec. 6. NEW SECTION . 453F.3 Delivery sale requirements and 6 restrictions. 7 1. The delivery sale of premium cigars pursuant to this 8 chapter shall be subject to the following requirements and 9 restrictions: 10 a. All premium cigars delivered by delivery sale directly to 11 a resident of this state shall be sold only by a delivery sale 12 permit holder. 13 b. A delivery sale permit holder shall only deliver premium 14 cigars by delivery sale to a resident of this state who is at 15 least twenty-one years of age for the resident’s personal use 16 and not for resale. 17 c. All premium cigars delivered by delivery sale directly to 18 a resident of this state shall be conspicuously labeled with 19 the words “CONTAINS CIGARS: SIGNATURE OF PERSON AGE 21 OR 20 OLDER REQUIRED FOR DELIVERY” or shall be conspicuously labeled 21 with alternative wording preapproved by the director. 22 d. A delivery sale permit holder shall obtain valid proof 23 of identity and age prior to delivery, and shall obtain the 24 signature of a person age twenty-one or older as a condition 25 of delivery. 26 e. A delivery sale permit holder shall maintain records of 27 premium cigars delivered which include the quantity of premium 28 cigars delivered, recipient’s name and address and verification 29 of age on an electronic or paper form of signature from the 30 recipient of the premium cigars. Records shall be submitted 31 electronically to the department in a form and manner to be 32 determined by the director. Records shall be maintained for at 33 least five years. 34 2. A delivery sale permit holder shall be deemed to have 35 -4- LSB 6076XC (3) 91 jm/jh 4/ 9

S.F. _____ consented to the jurisdiction of the director or any other 1 agency or court in this state concerning enforcement of 2 this section and any related laws, rules, or regulations. A 3 delivery sale permit holder shall allow the director to perform 4 an audit of records of devices upon request. 5 Sec. 7. NEW SECTION . 453F.4 Cigar bars —— verification of 6 income —— exemption under smokefree air Act. 7 1. A cigar bar shall annually submit a certified financial 8 statement to the department verifying that at least fifty 9 percent of the annual gross revenues are generated from the 10 retail sale of premium cigars and cigar-related products at the 11 place of business. 12 2. When the qualification as a cigar bar under this chapter 13 is not met, the department shall mail a notice stating the 14 qualification as an exempt area under chapter 142D ceases seven 15 days after the date of the notice. 16 Sec. 8. NEW SECTION . 453F.5 Administration —— rules —— 17 intent. 18 1. The director shall administer this chapter. The director 19 shall collect, supervise, and enforce the collection of all 20 fees, taxes, and civil penalties imposed under this chapter. 21 2. The director may adopt rules pursuant to chapter 17A that 22 are necessary to enforce this chapter. 23 3. The director may designate employees to administer 24 and enforce the provisions of this chapter, including the 25 collection of all taxes provided for in this chapter. In the 26 enforcement, the director may request aid from the attorney 27 general, the special agents of the state, any county attorney, 28 or any peace officer. The director may appoint clerks and 29 additional help as may be needed to administer this chapter. 30 4. This chapter or the holding of a delivery sale permit 31 under this chapter shall not be construed to limit the 32 application of other state laws and regulations governing 33 cigars. 34 5. The director shall prescribe the forms necessary for 35 -5- LSB 6076XC (3) 91 jm/jh 5/ 9

S.F. _____ the efficient administration of this chapter and may require 1 uniform books and records to be used and kept by each cigar bar 2 and cigar retailer or other person as deemed necessary. 3 Sec. 9. NEW SECTION . 453F.6 Permits —— suspension —— 4 revocation —— penalties. 5 1. The provisions of chapter 453A, including the permit 6 suspension and revocation provisions and the civil penalties 7 established in section 453A.22, shall apply to tobacco 8 retailers who are also delivery sale permit holders under this 9 chapter. The provisions of chapter 453A applicable to persons 10 other than cigar retailers who violate chapter 453A shall also 11 apply to persons who violate this chapter. 12 2. If a person holding a delivery sale permit under this 13 chapter has willfully violated this chapter, the department 14 shall revoke the permit upon notice and hearing. The hearing 15 before the department may be held at a site in the state as the 16 department may direct. The notice shall be given by mailing a 17 copy to the permit holder’s place of business as it appears on 18 the application for a permit. If, upon hearing, the department 19 finds that the violation has occurred, the department may 20 revoke the permit. 21 3. If a delivery sale permit is suspended or revoked under 22 this section, the suspension or revocation shall only apply to 23 the place of business at which the violation occurred and shall 24 not apply to any other place of business to which the permit 25 applies but at which the violation did not occur. 26 4. In addition to any other applicable penalties, a 27 cigar bar or cigar retailer who violates this chapter shall 28 be subject to the following penalties if incurred within a 29 twelve-month rolling period: 30 a. For a first violation, a civil penalty not to exceed one 31 thousand dollars. 32 b. For a second violation, a civil penalty not to exceed two 33 thousand dollars. 34 c. For a third violation, a civil penalty not to exceed 35 -6- LSB 6076XC (3) 91 jm/jh 6/ 9

S.F. _____ five thousand dollars and the violation constitutes grounds 1 for suspension or revocation of any permit issued under this 2 chapter for a period of one year. 3 Sec. 10. EFFECTIVE DATE. This Act, being deemed of 4 immediate importance, takes effect upon enactment. 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 cigar bars by modifying the smokefree 9 air Act and allowing for certain delivery sales. 10 SMOKEFREE AIR ACT. The bill modifies Code chapter 142D 11 (smokefree air Act) by exempting cigar bars from the smokefree 12 air Act if the cigar bar meets the definition of a cigar bar 13 created in the bill. 14 The bill defines “cigar bar” to mean a retail establishment 15 that meets all of the following criteria: (1) generates at 16 least 50 percent of annual gross revenues from the retail 17 sale of premium cigars and cigar-related products, excluding 18 delivery sales, alcohol, and food, (2) prohibits the entry of 19 persons under 21 years of age, (3) holds a class “C” or special 20 class “C” retail alcohol license, (4) holds a tobacco retailer 21 permit under Code section 453A.47A, (5) maintains a walk-in 22 humidor or a humidor with a capacity of storing at least 150 23 cigars, (6) posts at every entrance a declaration that smoking 24 is permitted on the premises and persons under the age of 21 25 years of age are prohibited from entry, (7) does not allow the 26 smoking of any other product other than premium cigars, and (8) 27 sells only premium cigars. 28 The bill defines “premium cigar” to mean a cigar that is (1) 29 wrapped in whole tobacco leaf, (2) 100 percent leaf tobacco 30 binder, (3) 100 percent tobacco filler, (4) handmade, (5) 31 contains only a tobacco tip, (6) weighs more than six pounds 32 per 1,000 units. 33 The bill specifies a cigar bar shall annually submit a 34 certified financial statement to the department verifying that 35 -7- LSB 6076XC (3) 91 jm/jh 7/ 9

S.F. _____ at least 50 percent of the annual gross revenues are generated 1 from the retail sale of premium cigars and cigar-related 2 products. 3 DELIVERY SALES. The bill permits a cigar bar retailer 4 to sell premium cigars through delivery sales if the person 5 holds a delivery sale permit issued pursuant to the processes 6 established in the bill. 7 A “cigar retailer” is defined to mean a cigar bar as defined 8 in the bill that holds a delivery sale permit. 9 The bill defines “delivery sale” to mean any sale of a 10 premium cigar to a purchaser in this state where the purchaser 11 submits the order for such sale by means of a telephonic 12 or other method of voice transmission, mail or any other 13 delivery service, or the internet or other online service and 14 the premium cigar is delivered by use of mail or a delivery 15 service. 16 A cigar retailer shall not sell premium cigars through 17 delivery sales until an application for the permit has been 18 filed with the department of revenue (department), the $25 19 permit fee has been paid, and the department approves the 20 application. 21 The bill requires the application shall be filed and a 22 delivery sale permit obtained for each place of business owned 23 or operated by a cigar retailer located in the state. 24 The application shall include information about the manner 25 under which the cigar retailer transacts or intends to transact 26 business as a cigar retailer, the principal office of the 27 applicant, the names of the owners and their addresses, and any 28 other information the director of revenue (director) prescribes 29 by rule. 30 The bill requires a delivery sale of premium cigars be only 31 delivered to a resident of this state who is at least 21 years 32 of age and be for the resident’s personal use and not for 33 resale. 34 The bill requires all premium cigars delivered by delivery 35 -8- LSB 6076XC (3) 91 jm/jh 8/ 9

S.F. _____ sale directly to a resident of this state to be conspicuously 1 labeled with the words “CONTAINS CIGARS: SIGNATURE OF 2 PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY” or shall be 3 conspicuously labeled with alternative wording preapproved by 4 the director. 5 The bill requires a delivery sale permit holder to obtain 6 valid proof of identity and age prior to delivery, and shall 7 obtain the signature of a person age 21 years of age or older as 8 a condition of delivery. 9 The department is required to administer the bill and may 10 adopt rules necessary to enforce the bill. 11 The bill requires a delivery sale permit holder to maintain 12 records of premium cigars delivered for at least five years. 13 The bill establishes procedures for the suspension of the 14 delivery sale permit that are similar to procedures for the 15 suspension of tobacco retailer permits under Code chapter 453A. 16 The bill provides for increasing civil penalties for 17 violations of the bill. 18 The bill takes effect upon enactment. 19 -9- LSB 6076XC (3) 91 jm/jh 9/ 9