SSB 3101

This bill relates to the regulation of vapor products in the state. The bill directs the Code editor to create a new subchapter in Code chapter 453A (cigarette and tobacco taxes and regulation of alternative nicotine products and vapor products) to be entitled “Vapor Products Directory and Regulation”. The bill requires that by August 1, annually, following the date the director first makes the vapor products directory publicly available, every vapor products manufacturer whose vapor products are sold in the state, whether directly or through an intermediary, shall certify under penalty of perjury on a form and in the manner prescribed by the director (director) of the department of revenue (DOR), that the vapor products manufacturer agrees to comply with the new Code subchapter and has either received a marketing authorization or similar order for the vapor product from the federal food and drug administration (FDA); or that the vapor product was marketed in the United States as of August 8, 2016, the vapor products manufacturer submitted a premarket tobacco product application for the vapor product to the FDA on or before September 9, 2020, and the application either remains under review by the FDA or a final decision on the application has not otherwise taken effect. The certification must separately list each of the vapor products manufacturer’s vapor products sold in the state. _____ application for each vapor product was submitted to the FDA and a final authorization or order has not yet taken effect. The certification must also be accompanied by a payment of $100 for each vapor product listed in the certification. A vapor products manufacturer required to submit a certification form shall notify the director within business days of any material change to the certification form, including any change in the federal authorization for the vapor product. The director shall maintain and make publicly available a vapor products directory that lists all vapor products manufacturers and vapor products for which certification forms have been submitted. The directory shall be available on DOR’s internet site, and the director shall update the directory on at least a monthly basis. The director shall provide a vapor products manufacturer with notice and an opportunity to cure deficiencies before removing the vapor products manufacturer or a vapor product from the directory. The bill provides the process and time frames for removing a vapor products manufacturer or vapor product from the directory. A determination by the director to not include or to remove a vapor products manufacturer or a vapor product from the directory shall be subject to review by the filing of a civil action for prospective declaratory or injunctive relief. If a vapor product is removed from the directory, the bill provides the process and time frames by which a retailer, distributor, or wholesaler must remove the vapor product from inventory and return the vapor product to the vapor products manufacturer for disposal. After the time frame specified, the vapor products in the notice of removal are contraband and are subject to seizure, forfeiture, and destruction, and shall not be purchased or sold in the state. _____ a vapor product in this state that is not included in the vapor products directory and a vapor products manufacturer shall not sell, either directly or through an intermediary, a vapor product in this state that is not included in the vapor products directory; and a retailer shall purchase vapor products for resale to consumers only from a distributor or subjobber with a valid license issued pursuant to Code chapter 453A. The bill provides for civil penalties and licensee discipline for a retailer, distributor, or wholesaler who sells or offers for sale a vapor product in this state that is not included in the vapor products directory, based on the number of violations in a period of years. A vapor products manufacturer whose vapor products are not listed in the vapor products directory and are sold in this state, whether directly or through an intermediary, is subject to a civil penalty of $1,000 per day for each vapor product offered for sale in violation of the bill. A vapor products manufacturer that knowingly makes a false representation in any of the information required by the new Code subchapter is guilty of a serious misdemeanor for each false representation. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560.16 (consumer frauds). The bill provides that each distributor or retailer that distributes or sells vapor products in the state shall be subject to at least two unannounced compliance checks annually for purposes of enforcing the new Code subchapter, and that any unannounced follow-up compliance checks of a noncompliant retailer or distributor shall be conducted within business days after any violation of the new Code subchapter. _____ director shall publish the results of all compliance checks performed at least annually and shall make the results available to the public upon request. The bill requires a nonresident vapor products manufacturer that has not registered to do business in the state as a foreign corporation or business entity to, as a condition precedent to being included or retained in the vapor products directory, appoint and continually engage without interruption the services of an agent in this state to act as agent for the service of process. The bill provides the requirements for instances in which a vapor products manufacturer terminates the authority of an agent or an agent terminates an agency appointment. If a vapor products manufacturer whose vapor products are sold in the state has not appointed and engaged the services of an agent as required, the vapor products manufacturer is deemed to have appointed the secretary of state as its agent for service of process. However, the appointment of the secretary of state as agent shall not satisfy the condition precedent for the vapor products manufacturer to be included or retained in the vapor products directory. The bill provides that the revenues generated from the payment of fees and penalties provided for under the new Code subchapter shall be credited to the health care trust fund and used for the administration and enforcement of the new Code subchapter.35A (health care trust fund) to reflect this provision. _____ permit holder, and to examine all of the records required to be kept or any other records that may be kept incident to the conduct of the vapor products business of the permit holder or any other person dealing in vapor products. The bill requires that by January 15, annually, following the director first makes the vapor products directory publicly available, the director shall submit a report to the general assembly regarding the status of the vapor products directory, vapor products manufacturers, the vapor products included in the directory, revenue and expenditures related to administration of the new Code subchapter, and enforcement activities undertaken pursuant to the new Code subchapter. The bill authorizes the director to adopt administrative rules to administer the new Code subchapter, and provides Code editor directives to provide for creation of the new Code subchapter, a conforming transfer, and other modifications necessitated by the bill.