H.F. 2109 Section 1. Section 453A.1, subsection 21, Code 2014, is 1 amended to read as follows: 2 21. “Retailer” shall mean and include every person in 3 this state who shall sell, distribute, or offer for sale for 4 consumption or possess for the purpose of sale for consumption, 5 cigarettes , alternative nicotine products, or vapor products 6 irrespective of quantity or amount or the number of sales. 7 Sec. 2. Section 453A.1, Code 2014, is amended by adding the 8 following new subsections: 9 NEW SUBSECTION . 01. “Alternative nicotine product” means 10 a product, not consisting of or containing tobacco, that 11 provides for the ingestion into the body of nicotine, whether 12 by chewing, absorbing, dissolving, inhaling, snorting, or 13 sniffing, or by any other means. “Alternative nicotine product” 14 does not include cigarettes, tobacco products, or vapor 15 products, or a product that is regulated as a drug or device by 16 the United States food and drug administration under chapter V 17 of the federal Food, Drug, and Cosmetic Act. 18 NEW SUBSECTION . 26A. “Vapor product” means a noncombustible 19 product containing nicotine that employs a mechanical heating 20 element, battery, or circuit, regardless of shape or size, that 21 can be used to heat a nicotine solution, and includes but is 22 not limited to a cartridge or other container of such nicotine 23 solution, an electronic cigarette, an electronic cigar, an 24 electronic cigarillo, or an electronic pipe. “Vapor product” 25 does not include a product regulated as a drug or device by the 26 United States food and drug administration under chapter V of 27 the federal Food, Drug, and Cosmetic Act. 28 Sec. 3. Section 453A.2, subsections 1, 2, 3, and 8, Code 29 2014, are amended to read as follows: 30 1. A person shall not sell, give, or otherwise supply any 31 tobacco, tobacco products, alternative nicotine products, vapor 32 products, or cigarettes to any person under eighteen years of 33 age. 34 2. A person under eighteen years of age shall not smoke, 35 -1- HF 2109 (3) 85 pf/rj/md 1/ 10

H.F. 2109 use, possess, purchase, or attempt to purchase any tobacco, 1 tobacco products, alternative nicotine products, vapor 2 products, or cigarettes. 3 3. Possession of cigarettes or tobacco , tobacco products , 4 alternative nicotine products, vapor products, or cigarettes by 5 an individual under eighteen years of age does not constitute a 6 violation under this section if the individual under eighteen 7 years of age possesses the cigarettes or tobacco , tobacco 8 products , alternative nicotine products, vapor products, or 9 cigarettes as part of the individual’s employment and the 10 individual is employed by a person who holds a valid permit 11 under this chapter or who lawfully offers for sale or sells 12 cigarettes or tobacco products. 13 8. a. A person shall not be guilty of a violation of 14 this section if conduct that would otherwise constitute a 15 violation is performed to assess compliance with cigarette and 16 tobacco , tobacco products , alternative nicotine products, vapor 17 products, or cigarette laws if any of the following applies: 18 (1) The compliance effort is conducted by or under the 19 supervision of law enforcement officers. 20 (2) The compliance effort is conducted with the advance 21 knowledge of law enforcement officers and reasonable measures 22 are adopted by those conducting the effort to ensure that 23 use of cigarettes or tobacco , tobacco products , alternative 24 nicotine products, vapor products, or cigarettes by individuals 25 under eighteen years of age does not result from participation 26 by any individual under eighteen years of age in the compliance 27 effort. 28 b. For the purposes of this subsection , “law enforcement 29 officer” means a peace officer as defined in section 801.4 and 30 includes persons designated under subsection 4 to enforce this 31 section . 32 Sec. 4. Section 453A.4, subsection 1, Code 2014, is amended 33 to read as follows: 34 1. If a person holding a permit under this chapter or an 35 -2- HF 2109 (3) 85 pf/rj/md 2/ 10

H.F. 2109 employee of such a permittee has a reasonable belief based on 1 factual evidence that a driver’s license as defined in section 2 321.1, subsection 20A, or nonoperator’s identification card 3 issued pursuant to section 321.190 offered by a person who 4 wishes to purchase cigarettes or tobacco , tobacco products , 5 alternative nicotine products, vapor products, or cigarettes 6 is altered or falsified or belongs to another person, the 7 permittee or employee may retain the driver’s license or 8 nonoperator’s identification card. Within twenty-four hours, 9 the card shall be delivered to the appropriate city or county 10 law enforcement agency of the jurisdiction in which the 11 permittee’s premises are located, and the permittee shall file 12 a written report of the circumstances under which the card was 13 retained. The local law enforcement agency may investigate 14 whether a violation of section 321.216 , 321.216A , or 321.216C 15 has occurred. If an investigation is not initiated or probable 16 cause is not established by the local law enforcement agency, 17 the driver’s license or nonoperator’s identification card shall 18 be delivered to the person to whom it was issued. The local law 19 enforcement agency may forward the card with the report to the 20 state department of transportation for investigation, in which 21 case, the state department of transportation may investigate 22 whether a violation of section 321.216 , 321.216A , or 321.216C 23 has occurred. The state department of transportation shall 24 return the card to the person to whom it was issued if an 25 investigation is not initiated or probable cause is not 26 established. 27 Sec. 5. Section 453A.5, subsection 1, Code 2014, is amended 28 to read as follows: 29 1. The alcoholic beverages division of the department of 30 commerce shall develop a tobacco compliance employee training 31 program not to exceed two hours in length for employees and 32 prospective employees of retailers, as defined in sections 33 453A.1 and 453A.42 , to inform the employees about state and 34 federal laws and regulations regarding the sale of cigarettes 35 -3- HF 2109 (3) 85 pf/rj/md 3/ 10

H.F. 2109 and tobacco , tobacco products , alternative nicotine products, 1 vapor products, and cigarettes to persons under eighteen 2 years of age and compliance with and the importance of laws 3 regarding the sale of cigarettes and tobacco , tobacco products , 4 alternative nicotine products, vapor products, and cigarettes 5 to persons under eighteen years of age. 6 Sec. 6. Section 453A.13, subsection 1, Code 2014, is amended 7 to read as follows: 8 1. Permits required. Every distributor, wholesaler, 9 cigarette vendor, and retailer, now engaged or who desires to 10 become engaged in the sale or use of cigarettes, upon which 11 a tax is required to be paid, and every retailer now engaged 12 or who desires to become engaged in selling, offering for 13 sale, or distributing alternative nicotine products or vapor 14 products shall obtain a state or retail cigarette permit as a 15 distributor, wholesaler, cigarette vendor, or retailer, as the 16 case may be. 17 Sec. 7. Section 453A.13, subsections 6, 9, and 10, Code 18 2014, are amended to read as follows: 19 6. No sales without permit. No A distributor, wholesaler, 20 cigarette vendor, or retailer shall not sell any cigarettes , 21 alternative nicotine products, or vapor products until such 22 application has been filed and the fee prescribed paid for a 23 permit and until such permit is obtained and only while such 24 permit is unrevoked and unexpired. 25 9. Permit —— form and contents. Each permit issued shall 26 describe clearly the place of business for which it is issued, 27 shall be nonassignable, consecutively numbered, designating the 28 kind of permit, and shall authorize the sale of cigarettes , 29 alternative nicotine products, or vapor products in this 30 state subject to the limitations and restrictions herein 31 contained. The retail permits shall be upon forms furnished by 32 the department or on forms made available or approved by the 33 department. 34 10. Permit displayed. The permit shall, at all times, be 35 -4- HF 2109 (3) 85 pf/rj/md 4/ 10

H.F. 2109 publicly displayed by the distributor, wholesaler, or retailer 1 at the place of business so as to be easily seen by the public 2 and the persons authorized to inspect the place of business. 3 The proprietor or keeper of any building or place where 4 cigarettes and other , alternative nicotine products, vapor 5 products, or tobacco products are kept for sale, or with intent 6 to sell, shall upon request of any agent of the department or 7 any peace officer exhibit the permit. A refusal or failure to 8 exhibit the permit is prima facie evidence that the cigarettes , 9 alternative nicotine products, vapor products, tobacco, or 10 other tobacco products are kept for sale or with intent to sell 11 in violation of this division . 12 Sec. 8. Section 453A.36, subsections 6, 7, and 11, Code 13 2014, are amended to read as follows: 14 6. Any sales of cigarettes or tobacco , tobacco products , 15 alternative nicotine products, vapor products or cigarettes 16 made through a cigarette vending machine are subject to rules 17 and penalties relative to retail sales of cigarettes and 18 tobacco , tobacco products , alternative nicotine products, 19 vapor products and cigarettes provided for in this chapter . 20 Cigarettes shall not be sold through any cigarette vending 21 machine unless the cigarettes have been properly stamped or 22 metered as provided by this division , and in case of violation 23 of this provision, the permit of the dealer authorizing retail 24 sales of cigarettes shall be revoked. Payment of the permit 25 fee as provided in section 453A.13 authorizes a cigarette 26 vendor to sell cigarettes or tobacco ,tobacco products , 27 alternative nicotine products, vapor products and cigarettes 28 through vending machines. However, cigarettes or tobacco , 29 tobacco products , alternative nicotine products, vapor products 30 and cigarettes shall not be sold through a vending machine 31 unless the vending machine is located in a place where the 32 retailer ensures that no person younger than eighteen years of 33 age is present or permitted to enter at any time. Cigarettes 34 or Tobacco, tobacco products , alternative nicotine products, 35 -5- HF 2109 (3) 85 pf/rj/md 5/ 10

H.F. 2109 vapor products and cigarettes shall not be sold through any 1 cigarette vending machine if such products are placed together 2 with any nontobacco product, other than matches, in the 3 cigarette vending machine. This section does not require a 4 retail permit holder to buy a cigarette vendor’s permit if the 5 retail permit holder is in fact the owner of the cigarette 6 vending machines and the machines are operated in the location 7 described in the retail permit. 8 7. a. It shall be unlawful for a person other than a holder 9 of a retailer as defined in section 453A.1 or 453A.42 who holds 10 a valid retail permit , as applicable, to sell tobacco, tobacco 11 products, alternative nicotine products, vapor products, or 12 cigarettes at retail. 13 b. No A state permit holder shall not sell or distribute 14 cigarettes at wholesale to any person in the state of Iowa 15 who does not hold a permit authorizing the retail sale 16 of cigarettes or who does not hold a state permit as a 17 manufacturer, distributing agent, wholesaler, or distributor. 18 11. Violation of this section by the holder of a retailer’s, 19 distributor’s, wholesaler’s or manufacturer’s permit shall be 20 grounds for the revocation of such permit. 21 Sec. 9. Section 453A.36A, subsection 1, Code 2014, is 22 amended to read as follows: 23 1. Beginning January 1, 1999, except Except as provided in 24 section 453A.36, subsection 6 , a retailer shall not sell or 25 offer for sale cigarettes or tobacco , tobacco products, in a 26 quantity of less than a carton, alternative nicotine products, 27 vapor products, or cigarettes through the use of a self-service 28 display. 29 Sec. 10. Section 453A.39, Code 2014, is amended to read as 30 follows: 31 453A.39 Tobacco product , tobacco products, alternative 32 nicotine products, vapor products, and cigarette samples —— 33 restrictions —— administration. 34 1. A manufacturer, distributor, wholesaler, retailer, or 35 -6- HF 2109 (3) 85 pf/rj/md 6/ 10

H.F. 2109 distributing agent, or agent thereof, shall not give away 1 cigarettes or tobacco products at any time in connection with 2 the manufacturer’s, distributor’s, wholesaler’s, retailer’s, or 3 distributing agent’s business or for promotion of the business 4 or product, except as provided in subsection 2 . 5 2. a. All cigarette samples shall be shipped only to a 6 distributor that has a permit to stamp cigarettes or little 7 cigars with Iowa tax. All cigarette samples must have a 8 cigarette stamp. The manufacturer shipping samples under this 9 section shall send an affidavit to the director stating the 10 shipment information, including the date shipped, quantity, and 11 to whom the samples were shipped. The distributor receiving 12 the shipment shall send an affidavit to the director stating 13 the shipment information, including the date shipped, quantity, 14 and from whom the samples were shipped. These affidavits shall 15 be duly notarized and submitted to the director at the time of 16 shipment and receipt of the samples. The distributor shall 17 pay the tax on samples by separate remittance along with the 18 affidavit. 19 b. A manufacturer, distributor, wholesaler, retailer, or 20 distributing agent or agent thereof shall not give away any 21 cigarettes or tobacco , tobacco products , alternative nicotine 22 products, vapor products, or cigarettes to any person under 23 eighteen years of age, or within five hundred feet of any 24 playground, school, high school, or other facility when such 25 facility is being used primarily by persons under age eighteen 26 for recreational, educational, or other purposes. 27 c. Proof of age shall be required if a reasonable person 28 could conclude on the basis of outward appearance that a 29 prospective recipient of a sample may be under eighteen years 30 of age. 31 Sec. 11. Section 453A.42, subsection 10, Code 2014, is 32 amended to read as follows: 33 10. “Retailer” means any person engaged in the business 34 of selling tobacco , tobacco products , alternative nicotine 35 -7- HF 2109 (3) 85 pf/rj/md 7/ 10

H.F. 2109 products, or vapor products to ultimate consumers. 1 Sec. 12. Section 453A.47A, subsections 1, 2, 4, 5, and 10, 2 Code 2014, are amended to read as follows: 3 1. Permits required. A person shall not engage in 4 the business of a retailer of tobacco , tobacco products , 5 alternative nicotine products, or vapor products at any place 6 of business without first having received a permit as a tobacco 7 products retailer. 8 2. No sales without permit. A retailer shall not sell any 9 tobacco , tobacco products , alternative nicotine products, or 10 vapor products, until an application has been filed and the fee 11 prescribed paid for a permit and until such permit is obtained 12 and only while such permit is not suspended, unrevoked, or 13 unexpired. 14 4. Retailer —— cigarettes and tobacco , tobacco products , 15 alternative nicotine products, and vapor products . A retailer, 16 as defined in section 453A.1 , who holds a permit under division 17 I of this chapter is not required to also obtain a retail 18 permit under this division . However, if a retailer, as defined 19 in section 453A.1 , only holds a permit under division I of this 20 chapter and that permit is suspended, revoked, or expired, the 21 retailer shall not sell any cigarettes or tobacco , tobacco 22 products , alternative nicotine products, or vapor products, 23 during the time which the permit is suspended, revoked, or 24 expired. 25 5. Separate permit. A separate retail permit shall be 26 required of a distributor or subjobber if the distributor or 27 subjobber sells tobacco , tobacco products , alternative nicotine 28 products, or vapor products at retail. 29 10. Records and reports of retailers. 30 a. The director shall prescribe the forms necessary for 31 the efficient administration of this section and may require 32 uniform books and records to be used and kept by each retailer 33 or other person as deemed necessary. 34 b. Every retailer shall, when requested by the department, 35 -8- HF 2109 (3) 85 pf/rj/md 8/ 10

H.F. 2109 make additional reports as the department deems necessary and 1 proper and shall at the request of the department furnish full 2 and complete information pertaining to any transaction of the 3 retailer involving the purchase or sale or use of tobacco , 4 tobacco products , alternative nicotine products, or vapor 5 products . 6 Sec. 13. Section 805.8C, subsection 3, Code 2014, is amended 7 to read as follows: 8 3. Smoking violations Violations related to smoking, tobacco, 9 tobacco products, alternative nicotine products, vapor products, 10 and cigarettes . 11 a. For violations described in section 142D.9, subsection 1 , 12 the scheduled fine is fifty dollars, and is a civil penalty, 13 and the criminal penalty surcharge under section 911.1 shall 14 not be added to the penalty, and the court costs pursuant 15 to section 805.9, subsection 6 , shall not be imposed. If 16 the civil penalty assessed for a violation described in 17 section 142D.9, subsection 1 , is not paid in a timely manner, 18 a citation shall be issued for the violation in the manner 19 provided in section 804.1 . However, a person under age 20 eighteen shall not be detained in a secure facility for failure 21 to pay the civil penalty. The complainant shall not be charged 22 a filing fee. 23 b. For violations of section 453A.2, subsection 1 , by an 24 employee of a retailer, the scheduled fine is as follows: 25 (1) If the violation is a first offense, the scheduled fine 26 is one hundred dollars. 27 (2) If the violation is a second offense, the scheduled fine 28 is two hundred fifty dollars. 29 (3) If the violation is a third or subsequent offense, the 30 scheduled fine is five hundred dollars. 31 c. For violations of section 453A.2, subsection 2 , the 32 scheduled fine is as follows and is a civil penalty, and the 33 criminal penalty surcharge under section 911.1 shall not be 34 added to the penalty, and the court costs pursuant to section 35 -9- HF 2109 (3) 85 pf/rj/md 9/ 10

H.F. 2109 805.9, subsection 6 , shall not be imposed: 1 (1) If the violation is a first offense, the scheduled fine 2 is fifty dollars. 3 (2) If the violation is a second offense, the scheduled fine 4 is one hundred dollars. 5 (3) If the violation is a third or subsequent offense, the 6 scheduled fine is two hundred fifty dollars. 7 Sec. 14. APPLICATION TO EXISTING PRODUCTS. Nothing in this 8 Act shall be construed to prohibit the department of revenue 9 from collecting taxes imposed on cigarettes or tobacco products 10 subject to taxation under chapter 453A prior to July 1, 2014. 11 Sec. 15. CODE EDITOR DIRECTIVE. The Code editor shall 12 modify the title of chapter 453A to read “Cigarette and Tobacco 13 Taxes and Regulation of Alternative Nicotine Products and Vapor 14 Products”. 15 -10- HF 2109 (3) 85 pf/rj/md 10/ 10