Relating to tobacco, tobacco products, alternative nicotine products, vapor products, and cigarettes, including the regulation and taxation of such products, providing penalties, and including effective date provisions

The bill makes conforming changes in the Code for exceptions to possession of tobacco, tobacco products, alternative nicotine products, vapor products, or cigarettes by an individual under legal age if the individual possesses the product as part of the individual’s employment and if the individual is involved in a compliance effort. The bill also provides that relative to vending machines, 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 legal age is present or permitted to enter at any time. The bill provides that for the purposes of giving away these products or providing samples, the recipient must be of legal age. The bill also provides that for delivery sales, the retailer must verify that the purchaser is at least of legal age and must use a method of mailing, shipping, or delivery that requires the signature of a person who is at least of legal age before the shipping package is released to the purchaser. The division takes effect upon enactment. Division II of the bill relates to limitations on the sale or distribution of vapor products with characterizing flavor. The bill prohibits a retailer (any person engaged in the business of selling tobacco, tobacco products, alternative nicotine products, or vapor products to ultimate consumers) from offering for sale, giving, or otherwise supplying in this state any vapor product with a characterizing flavor. There shall be a rebuttable presumption that a vapor product has a characterizing flavor if any statement or claim made by the manufacturer or agent or employee of the manufacturer, directed to consumers or to the public, states or claims that the vapor product has or produces a characterizing flavor. Such statements or claims include but are not limited to those made through social media, the product’s labeling or packaging, or other advertising used to explicitly or implicitly communicate that the vapor product has a characterizing flavor. The bill defines “characterizing flavor” as a distinguishable taste or aroma or both, other than the taste or aroma of tobacco, imparted by a vapor product or any byproduct produced by the vapor product. Characterizing flavors include but are not limited to tastes or aromas relating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, menthol, mint, wintergreen, herb, or spice. A retailer who violates this provision is subject to permit suspension or revocation. Additionally, a retailer who violates this provision is guilty of a fraudulent practice. The penalties applicable to a fraudulent practice are based on the amount of money or value of the property or services involved and range from a simple misdemeanor when the amount does not exceed $300, to a class “C” felony, punishable by confinement for no more than years and a fine of at least $1,000 but not more than $10,000, when the amount involved exceeds $10,000. Division III of the bill relates to taxes on vapor products. The bill imposes a tax on vapor products in the state at the rate of percent of the wholesale sales price of the vapor product. The tax shall be imposed on any component part or accessory of a vapor product, whether or not sold separately, that is necessary to and used during the operation of a vapor product, including but not limited to 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. The tax is imposed at the point of retail sale to consumers in this state. The amount of the tax shall be added to the selling price of each vapor product sold in this state and shall be collected from the purchaser so that the ultimate consumer bears the burden of the tax. The bill defines “wholesale sales price” as the price charged to a wholesaler or distributor by the manufacturer of a vapor product, the price charged to a retailer by a wholesaler or distributor of a vapor product, or, if the retailer is the manufacturer of the vapor product, the retail sales price of a vapor product, whichever applicable price is highest. The bill makes other conforming changes. Existing penalties for violations of the provisions of Code chapter 453A (cigarette and tobacco taxes and regulation of alternative nicotine products and vapor products), including permit revocation or suspension and civil penalties, are applicable to violations of the bill. Division IV of the bill relates to the marketing and advertising of vapor products. The bill prohibits a retailer from advertising vapor products in a place of business unless the advertisement is placed in a location where the retailer ensures the advertisement is not visible to any person under legal age. The bill also prohibits an operator of an internet site, online or cloud computing service, online application, or mobile application directed to persons under legal age, from marketing or advertising a vapor product on that internet site, online or cloud computing service, online application, or mobile application. If such person has actual knowledge that a person under legal age is using its internet website, online or cloud computing service, online application, or mobile application, and which user is that person under legal age, the person is prohibited from marketing or advertising a vapor product to that person under legal age, if the marketing or advertising is directed to the person under legal age, based upon information specific to that person. If such person has actual knowledge that a person under legal age is using its internet site, online or cloud computing service, online application, or mobile application, the person is prohibited from knowingly using, disclosing, or compiling, or allowing another person to use, disclose, or compile, the personal information of the person under legal age if that operator has actual knowledge that the person’s personally identifiable information will be used for the purpose of marketing or advertising to the person a vapor product. If marketing or advertising is provided by an advertising service, the internet site, online or cloud computing service, or online application, or mobile application shall notify the advertising service, in a manner directed by the advertising service, that the internet site, online or cloud computing service, online application, or mobile application is directed to persons under legal age and the advertising service which provides marketing or advertising for an internet site, online or cloud computing service, online application, or mobile application directed to persons under legal age, and which has received the notice required shall not market or advertise on the internet site, online or cloud computing service, online application, or mobile application a vapor product. The provision is not to be construed to require an operator of an internet site, online or cloud computing service, online application, or mobile application to collect age information about users and the marketing and advertising restrictions shall not apply to the incidental placement of vapor products embedded in content if the content is not distributed by or at the direction of the operator primarily for the purposes of marketing and advertising a vapor product. A person who violates a provision of the division is subject to applicable permit suspension and revocation and civil penalties. Division V relates to the smoke-free air Act (Code chapter 142D). The bill amends the definition of “smoking” to include reference to vapor products and other devices or delivery systems that contain or deliver nicotine or other substances through inhalation of vapor or aerosol. Division VI requires the state board of education to adopt by rule evidence-informed guidelines applicable to all students in kindergarten through grade in every school district and accredited nonpublic school to increase student knowledge of the facts about and prevent the use of vapor products.