SSB 3142 (LSB 6076XC (3) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON BOUSSELOT)

A BILL FOR

An Act relating to cigar bars by modifying the smokefree air Act and allowing for certain delivery sales, providing for a fee, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 142D.1, subsection 3, Code 2026, is amended to read as follows:
   3.  The purpose of this chapter is to reduce the level of exposure by the general public and employees to environmental tobacco smoke in order to improve the public health of Iowans, while allowing for limited exceptions.
    Sec. 2.  Section 142D.2, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  2A.  “Cigar bar” means the same as defined in section 453F.1.
    Sec. 3.  Section 142D.4, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  12.  Cigar bars.
    Sec. 4.  NEW SECTION.  453F.1  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Alcoholic beverage” means the same as defined in section 123.3.
   2.  “Cigar bar” means a retail establishment that meets all of the following criteria:
   a.  Generates at least fifty percent of annual gross revenues from the retail sale of premium cigars and cigar-related products at the place of business, excluding delivery sales, alcoholic beverages, and food.
   b.  Holds a class “C” or special class “C” retail alcohol license pursuant to chapter 123.
   c.  Holds a retailer permit pursuant to section 453A.47A.
   d.  Prohibits the entry of persons under the age of twenty-one years.
   e.  Maintains a walk-in humidor or a humidor with a capacity of storing at least one hundred fifty cigars at the place of business for the retail sale of cigars.
   f.  Clearly and conspicuously posts at every entrance a declaration that smoking is permitted on the premises of the place of business and persons under the age of twenty-one years are prohibited from entry.
   g.  Does not allow the smoking of any other product other than premium cigars.
   h.  Sells only premium cigars and no other types of cigars.
   3.  “Cigar retailer” means a cigar bar that holds a delivery sale permit issued pursuant to this chapter.
   4.  “Delivery sale” means any sale of a premium cigar to a purchaser in this state where the purchaser submits the order for such sale by means of a telephonic or other method of voice transmission, mail or any other delivery service, or the internet or other online service and the premium cigar is delivered by use of mail or a delivery service. “Delivery sale” does not include a sale to a distributor or business.
   5.  “Department” means the department of revenue.
   6.  “Director” means the director of revenue.
   7.  “Place of business” means any place where premium cigars or cigar-related products are sold, stored, or kept for the purpose of sale or consumption; or for a business within the state that conducts delivery sales, any place where premium cigars and cigar-related products are sold or are kept for the purpose of sale, including delivery sales within the state.
   8.  “Premium cigar” means a cigar that is all of the following:
   a.  Wrapped in whole tobacco leaf.
   b.  One hundred percent leaf tobacco binder.
   c.  One hundred percent tobacco filler.
   d.  Handmade or hand rolled.
   e.  Contains only a tobacco tip, with no filter or nontobacco tip or mouthpiece.
   f.  Contains only tobacco, water, and vegetable gum.
   g.  Weighs more than six pounds per one thousand units.
   9.  “Retail establishment” means a place of business where premium cigars and other cigar-related products are sold directly or through delivery sales to consumers.
    Sec. 5.  NEW SECTION.  453F.2  Application —— permit —— fees.
   1.  A person shall not engage in the business of a cigar retailer at any place of business or through delivery sales, unless the person has received and holds a delivery sale permit pursuant to this section that has not been suspended or revoked and is not expired, and complies with the provisions of this chapter.
   2.  A cigar retailer shall not sell premium cigars through delivery sales until an application has been filed with the department and the fee prescribed paid for a delivery sale permit and until such permit is obtained and only while such permit is not suspended, revoked, or expired.
   3.  An application shall be filed and a delivery sale permit obtained for each place of business owned or operated by a cigar retailer located in the state.
   4.  Upon approval of a delivery sale permit application by the department, the department shall issue the permit to the applicant in a manner determined by the department.
   5.  All delivery sale permits provided for in this section shall expire on June 30 of each year. A delivery sale permit shall not be granted or issued until the applicant has paid the fees provided for in this section for the period ending June 30 next, to the department. The fee for a delivery sale permit is twenty-five dollars.
   6.  Delivery sale permits shall be issued only upon application, accompanied by the twenty-five dollar fee, made upon forms furnished by the department. The application, any supporting documentation, and the associated fees required by this section shall be submitted to the department electronically. The application shall specify all of the following:
   a.  The manner under which the cigar retailer transacts or intends to transact business as a cigar retailer.
   b.  The principal office, residence, and place of business, to which the delivery sale permit is to apply.
   c.  If the applicant is not an individual, the names of the partners if the applicant is a partnership or the names of the principal officers or members if the applicant is a legal entity, and their addresses.
   d.  Such other information as the director shall by rule prescribe.
    Sec. 6.  NEW SECTION.  453F.3  Delivery sale requirements and restrictions.
   1.  The delivery sale of premium cigars pursuant to this chapter shall be subject to the following requirements and restrictions:
   a.  All premium cigars delivered by delivery sale directly to a resident of this state shall be sold only by a delivery sale permit holder.
   b.  A delivery sale permit holder shall only deliver premium cigars by delivery sale to a resident of this state who is at least twenty-one years of age for the resident’s personal use and not for resale.
   c.  All premium cigars delivered by delivery sale directly to a resident of this state shall be conspicuously labeled with the words “CONTAINS CIGARS: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY” or shall be conspicuously labeled with alternative wording preapproved by the director.
   d.  A delivery sale permit holder shall obtain valid proof of identity and age prior to delivery, and shall obtain the signature of a person age twenty-one or older as a condition of delivery.
   e.  A delivery sale permit holder shall maintain records of premium cigars delivered which include the quantity of premium cigars delivered, recipient’s name and address and verification of age on an electronic or paper form of signature from the recipient of the premium cigars. Records shall be submitted electronically to the department in a form and manner to be determined by the director. Records shall be maintained for at least five years.
   2.  A delivery sale permit holder shall be deemed to have consented to the jurisdiction of the director or any other agency or court in this state concerning enforcement of this section and any related laws, rules, or regulations. A delivery sale permit holder shall allow the director to perform an audit of records of devices upon request.
    Sec. 7.  NEW SECTION.  453F.4  Cigar bars —— verification of income —— exemption under smokefree air Act.
   1.  A cigar bar shall annually submit a certified financial statement to the department verifying that at least fifty percent of the annual gross revenues are generated from the retail sale of premium cigars and cigar-related products at the place of business.
   2.  When the qualification as a cigar bar under this chapter is not met, the department shall mail a notice stating the qualification as an exempt area under chapter 142D ceases seven days after the date of the notice.
    Sec. 8.  NEW SECTION.  453F.5  Administration —— rules —— intent.
   1.  The director shall administer this chapter. The director shall collect, supervise, and enforce the collection of all fees, taxes, and civil penalties imposed under this chapter.
   2.  The director may adopt rules pursuant to chapter 17A that are necessary to enforce this chapter.
   3.  The director may designate employees to administer and enforce the provisions of this chapter, including the collection of all taxes provided for in this chapter. In the enforcement, the director may request aid from the attorney general, the special agents of the state, any county attorney, or any peace officer. The director may appoint clerks and additional help as may be needed to administer this chapter.
   4.  This chapter or the holding of a delivery sale permit under this chapter shall not be construed to limit the application of other state laws and regulations governing cigars.
   5.  The director shall prescribe the forms necessary for the efficient administration of this chapter and may require uniform books and records to be used and kept by each cigar bar and cigar retailer or other person as deemed necessary.
    Sec. 9.  NEW SECTION.  453F.6  Permits —— suspension —— revocation —— penalties.
   1.  The provisions of chapter 453A, including the permit suspension and revocation provisions and the civil penalties established in section 453A.22, shall apply to tobacco retailers who are also delivery sale permit holders under this chapter. The provisions of chapter 453A applicable to persons other than cigar retailers who violate chapter 453A shall also apply to persons who violate this chapter.
   2.  If a person holding a delivery sale permit under this chapter has willfully violated this chapter, the department shall revoke the permit upon notice and hearing. The hearing before the department may be held at a site in the state as the department may direct. The notice shall be given by mailing a copy to the permit holder’s place of business as it appears on the application for a permit. If, upon hearing, the department finds that the violation has occurred, the department may revoke the permit.
   3.  If a delivery sale permit is suspended or revoked under this section, the suspension or revocation shall only apply to the place of business at which the violation occurred and shall not apply to any other place of business to which the permit applies but at which the violation did not occur.
   4.  In addition to any other applicable penalties, a cigar bar or cigar retailer who violates this chapter shall be subject to the following penalties if incurred within a twelve-month rolling period:
   a.  For a first violation, a civil penalty not to exceed one thousand dollars.
   b.  For a second violation, a civil penalty not to exceed two thousand dollars.
   c.  For a third violation, a civil penalty not to exceed five thousand dollars and the violation constitutes grounds for suspension or revocation of any permit issued under this chapter for a period of one year.
    Sec. 10.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to cigar bars by modifying the smokefree air Act and allowing for certain delivery sales.
   SMOKEFREE AIR ACT. The bill modifies Code chapter 142D (smokefree air Act) by exempting cigar bars from the smokefree air Act if the cigar bar meets the definition of a cigar bar created in the bill.
   The bill defines “cigar bar” to mean a retail establishment that meets all of the following criteria: (1) generates at least 50 percent of annual gross revenues from the retail sale of premium cigars and cigar-related products, excluding delivery sales, alcohol, and food, (2) prohibits the entry of persons under 21 years of age, (3) holds a class “C” or special class “C” retail alcohol license, (4) holds a tobacco retailer permit under Code section 453A.47A, (5) maintains a walk-in humidor or a humidor with a capacity of storing at least 150 cigars, (6) posts at every entrance a declaration that smoking is permitted on the premises and persons under the age of 21 years of age are prohibited from entry, (7) does not allow the smoking of any other product other than premium cigars, and (8) sells only premium cigars.
   The bill defines “premium cigar” to mean a cigar that is (1) wrapped in whole tobacco leaf, (2) 100 percent leaf tobacco binder, (3) 100 percent tobacco filler, (4) handmade, (5) contains only a tobacco tip, (6) weighs more than six pounds per 1,000 units.
   The bill specifies a cigar bar shall annually submit a certified financial statement to the department verifying that at least 50 percent of the annual gross revenues are generated from the retail sale of premium cigars and cigar-related products.
   DELIVERY SALES. The bill permits a cigar bar retailer to sell premium cigars through delivery sales if the person holds a delivery sale permit issued pursuant to the processes established in the bill.
   A “cigar retailer” is defined to mean a cigar bar as defined in the bill that holds a delivery sale permit.
   The bill defines “delivery sale” to mean any sale of a premium cigar to a purchaser in this state where the purchaser submits the order for such sale by means of a telephonic or other method of voice transmission, mail or any other delivery service, or the internet or other online service and the premium cigar is delivered by use of mail or a delivery service.
   A cigar retailer shall not sell premium cigars through delivery sales until an application for the permit has been filed with the department of revenue (department), the $25 permit fee has been paid, and the department approves the application.
   The bill requires the application shall be filed and a delivery sale permit obtained for each place of business owned or operated by a cigar retailer located in the state.
   The application shall include information about the manner under which the cigar retailer transacts or intends to transact business as a cigar retailer, the principal office of the applicant, the names of the owners and their addresses, and any other information the director of revenue (director) prescribes by rule.
   The bill requires a delivery sale of premium cigars be only delivered to a resident of this state who is at least 21 years of age and be for the resident’s personal use and not for resale.
   The bill requires all premium cigars delivered by delivery sale directly to a resident of this state to be conspicuously labeled with the words “CONTAINS CIGARS: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY” or shall be conspicuously labeled with alternative wording preapproved by the director.
   The bill requires a delivery sale permit holder to obtain valid proof of identity and age prior to delivery, and shall obtain the signature of a person age 21 years of age or older as a condition of delivery.
   The department is required to administer the bill and may adopt rules necessary to enforce the bill.
   The bill requires a delivery sale permit holder to maintain records of premium cigars delivered for at least five years.
   The bill establishes procedures for the suspension of the delivery sale permit that are similar to procedures for the suspension of tobacco retailer permits under Code chapter 453A.
   The bill provides for increasing civil penalties for violations of the bill.
   The bill takes effect upon enactment.