Bill Text: HI HB1574 | 2020 | Regular Session | Amended
Bill Title: Relating To Electronic Smoking Products.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2019-12-01 - Carried over to 2020 Regular Session. [HB1574 Detail]
Download: Hawaii-2020-HB1574-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1574 |
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THIRTIETH LEGISLATURE, 2019 |
H.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO ELECTRONIC SMOKING PRODUCTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that tobacco use is the single most preventable cause of disease, disability, and death in the United States. Tobacco use continues to be a problem in Hawaii, causing approximately one thousand four hundred deaths per year among adults. An estimated twenty-one thousand children in Hawaii currently under the age of eighteen will ultimately die prematurely from smoking. Tobacco use poses a heavy burden on Hawaii's health care system and economy. Each year, smoking costs approximately $526,000,000 in direct health care expenditures and $387,300,000 in lost productivity in the State.
The legislature further finds that tobacco products are addictive and inherently dangerous, causing many different types of cancer, heart disease, and other serious illnesses. Hawaii has a substantial interest in reducing the number of individuals of all ages who use tobacco products, and a particular interest in protecting adolescents from tobacco dependence and the illnesses and premature death associated with tobacco use.
The legislature additionally finds that electronic smoking devices, also known as e-cigarettes, are battery-operated products designed to deliver nicotine, flavor, and other chemicals to the user by turning chemicals including highly addictive nicotine into an aerosol that is inhaled by the user. Consumers may choose from varying strengths of e-liquid nicotine as well as liquids consisting of different flavors.
The electronic smoking device industry, including the production
of e‑liquids, is growing rapidly.
On December 18, 2018, the United States Surgeon General made the
unprecedented move of classifying the danger of youth usage of electronic
smoking devices as an epidemic. Since
the Surgeon General first issued a warning in 2016 about the dangers of these
products, data has shown historic rise in use by youth and young adults. According to the 2016 report from the Surgeon
General, e‑cigarette use amongst the nation's youth and young adults has
become a major public health concern.
The Surgeon General's report noted that e-cigarette use has increased
considerably in recent years, growing an astounding nine hundred per cent among
high school students from 2011 to 2015.
In a 2018 study conducted by the National Institute on Drug Abuse, the
use of electronic smoking devices by teens increased nationally from 27.8 to
37.3 per cent in a twelve-month period.
The increase translates to 1.3 million more teens using electronic
smoking devices in a single year. E‑cigarette
use among youth and young adults is also strongly associated with the use of
other tobacco products, including combustible tobacco products. Toxicologists have also warned that e-liquids
pose significant risks to public health, particularly to children. According to the Surgeon General's report, if
the contents of refill cartridges or bottles are consumed, ingestion of
e-liquids containing nicotine can cause acute toxicity and possibly death. The Surgeon General's report also found that
there are numerous policies and practices that can be implemented at the state
and local levels to address electronic smoking device use among youth and young
adults, including preventing access to e‑cigarettes by youth, significant
increases in tax and price of e-cigarettes, retail licensure, and regulation of
e-cigarette marketing.
The legislature additionally finds that the rapid growth of the
electronic smoking device industry, including retail businesses selling
electronic smoking devices or e-liquids, necessitates further regulations to
protect consumers, such as requiring retailers of e-liquids to obtain a retail
tobacco permit.
The legislature notes that the federal Food and Drug
Administration recently finalized a rule that expands its regulatory authority
to all tobacco products, including electronic smoking devices, cigars, and
hookah and pipe tobacco. However, the
legislature also notes that there is currently no state tobacco tax attached to
e-liquid, even though electronic smoking devices are now regulated as tobacco
products. Furthermore, tobacco products
other than cigarettes are currently taxed at a lower rate than cigarettes, even
though their use carries similar health risks.
Research has shown that increasing cigarette prices, such as through cigarette
taxes, tends to reduce the rate of smoking by adult and youth smokers. However, the legislature is concerned that as
the price of cigarettes increases, smokers may purchase less expensive tobacco
products, such as electronic smoking devices or e‑liquids.
Finally, the legislature concludes that there needs to be a tax
on e-liquids and taxing these products as other tobacco products is the most
equitable way to do so. Imposing a tax
on e-liquids will also encourage users of e-liquids to quit, sustain cessation,
prevent youth initiation, and reduce consumption among those who continue to
use them.
The purpose of this Act is to:
(1) Establish
the offense of unlawful shipment of e-liquid products;
(2) Include e-liquid within the definition of "tobacco products", as used in the cigarette tax and tobacco tax law, thereby:
(A) Subjecting e-liquid to the excise tax on tobacco products;
(B) Requiring retailers of e-liquid to obtain a retail tobacco permit to sell, possess, keep, acquire, distribute, or transport e-liquid;
(C) Prohibit persons from engaging in the business of a wholesaler or dealer of e-liquid without first obtaining a license from the department of taxation; and
(D) Applying other requirements of chapter 245, Hawaii Revised Statutes;
(3) Increase the license fee for persons engaged as a wholesaler or dealer of cigarettes and tobacco products;
(4) Increase the retail tobacco permit fee for retailers engaged in the retail sale of cigarettes and tobacco products;
(5) Deposit additional funds in the Hawaii Tobacco Prevention and Control Trust Fund; and
(6) Repeal various statutory provisions relating to electronic smoking devices made obsolete by this measure.
SECTION 2. Chapter 245, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§245- Unlawful
shipment of e-liquid products; penalty; reports; liability for unpaid taxes. (a)
A person commits the offense of unlawful shipment of e-liquid products
if the person:
(1) Is engaged in
the business of selling e-liquid products; and
(2) Ships or causes
to be shipped any e-liquid products to a person or entity in this State that is
not a licensee under this chapter.
(b)
This section shall not apply to the shipment of e‑liquid
products if any of the following conditions is met:
(1) The e-liquid
products are exempt from taxes as provided by section 245-3(b) or are otherwise
exempt from the applicability of this chapter as provided by section 245-62; or
(2) All applicable
Hawaii taxes on the e-liquid products are paid in accordance with the
requirements of this chapter.
(c) Unlawful shipment of e-liquid products may be
a class C felony if the person or entity knowingly ships or causes to be
shipped e-liquid products with a value of $10,000 or more in violation of
subsection (a).
(d) Unlawful shipment of e-liquid products is a
misdemeanor if the person or entity knowingly ships or causes to be shipped
e-liquid products with a value of less than $10,000 in violation of subsection
(a).
(e) For the purposes of this section, a person is
a licensee if the person or entity's name appears on a list of authorized
licensees published by the department.
(f) Notwithstanding the existence of other
remedies at law, any person that purchases, uses, controls, or possesses any
e-liquid products for which the applicable taxes imposed under title 14 have
not been paid, shall be liable for the applicable taxes, plus any penalty and
interest as provided for by law.
(g) For the purposes of this section:
"E-liquid products"
means e-liquid, electronic smoking devices containing e-liquid, or component
parts containing e-liquid.
"Person" shall not be
limited to individuals pursuant to section 1-19.
"Value" means the retail value of the property or services at the time and place of the offense."
SECTION 3. Section 245-1, Hawaii Revised Statutes, is amended as follows:
1. By adding three new definitions to be appropriately inserted and to read:
""E-liquid" means any liquid or like substance, which may or may not contain
nicotine, that is designed or intended
to be used in an electronic smoking device, whether or not packaged in a
cartridge or other container. E-liquid shall not include prescription drugs;
medical cannabis or manufactured cannabis products under chapter 329D; or
medical devices used to aerosolize, inhale, or ingest prescription drugs,
including manufactured cannabis products manufactured or distributed in
accordance with section 329D-10(a).
"Electronic smoking device" means any
electronic product, or part thereof, that can be used by a person to simulate
smoking in the delivery of nicotine or any other substance, intended for human
consumption, through inhalation of vapor or aerosol from the product. Electronic smoking device includes but is not
limited to an electronic cigarette, electronic cigar, electronic cigarillo,
electronic pipe, electronic hookah, vape pen or related product, and any
cartridge or other component part of the device or product.
"Smoke" or
"smoking" means inhaling, exhaling, burning, carrying, or possessing
any lighted or heated tobacco product, or similar substance intended for human
consumption, including the use of an electronic smoking device that creates an
aerosol or vapor, in any manner or in any form."
2. By amending the definition of "tobacco products" to read:
""Tobacco products" means [tobacco]:
(1) Tobacco in any form, other than
cigarettes or little cigars[, that is prepared or intended for consumption
or for personal use by humans, including large cigars and any substitutes
thereof other than cigarettes that bear the semblance thereof, snuff, chewing
or smokeless tobacco, and smoking or pipe tobacco.]; or
(2) E-liquid,
that is intended for human consumption, or is likely to be consumed, whether smoked, heated, chewed, absorbed, dissolved, inhaled, or ingested by other means. Tobacco products includes but is not limited to large cigars and any substitutes thereof other than cigarettes that bear the semblance thereof, pipe tobacco, chewing or smokeless tobacco, snuff, snus, e-liquid, electronic smoking devices containing e-liquid, component parts containing e-liquid, and related products."
SECTION 4. Section 245-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The license shall be issued by the department
upon application therefor, in such form and manner as shall be required by rule
of the department, and the payment of a fee of [$2.50,] $250, and
shall be renewable annually on July 1 for the twelve months ending the
succeeding June 30."
SECTION 5. Section 245-2.5, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows:
"(c) The retail tobacco permit
shall be issued by the department upon application by the retailer in the form
and manner prescribed by the department, and the payment of a fee of [$20.]
$50. Permits shall be valid for
one year, from December 1 to November 30, and renewable annually. Whenever a retail tobacco permit is defaced,
destroyed, or lost, or the permittee relocates the permittee's business, the
department may issue a duplicate retail tobacco permit to the permittee for a
fee of $5 per copy.
(d)
A separate retail tobacco permit shall be obtained for each place of
business owned, controlled, or operated by a retailer. In seeking a retail tobacco permit, the
applicant shall specify whether each place of business sells e-liquid. A retailer that owns or controls more than
one place of business may submit a single application for more than one retail
tobacco permit. Each retail
tobacco permit issued shall clearly describe the place of business where the
operation of the business is conducted[.] and whether the place of
business sells e-liquid."
SECTION 6. Section 245-15, Hawaii Revised Statutes, is amended to read as follows:
"§245-15 Disposition of revenues.
All moneys collected pursuant to this chapter shall be paid into the
state treasury as state realizations to be kept and accounted for as provided
by law; provided that, of the moneys collected under the tax imposed pursuant
to:
(1) Section
245-3(a)(5), after September 30, 2006, and prior to October 1, 2007, 1.0 cent
per cigarette shall be deposited to the credit of the Hawaii cancer research
special fund, established pursuant to section 304A-2168, for research and
operating expenses and for capital expenditures;
(2) Section
245-3(a)(6), after September 30, 2007, and prior to October 1, 2008:
(A) 1.5
cents per cigarette shall be deposited to the credit of the Hawaii cancer
research special fund, established pursuant to section 304A-2168, for research
and operating expenses and for capital expenditures;
(B) 0.25
cents per cigarette shall be deposited to the credit of the trauma system
special fund established pursuant to section 321-22.5; and
(C) 0.25
cents per cigarette shall be deposited to the credit of the emergency medical
services special fund established pursuant to section 321‑234;
(3) Section
245-3(a)(7), after September 30, 2008, and prior to July 1, 2009:
(A) 2.0
cents per cigarette shall be deposited to the credit of the Hawaii cancer
research special fund, established pursuant to section 304A-2168, for research
and operating expenses and for capital expenditures;
(B) 0.5
cents per cigarette shall be deposited to the credit of the trauma system
special fund established pursuant to section 321-22.5;
(C) 0.25
cents per cigarette shall be deposited to the credit of the community health
centers special fund established pursuant to section 321‑1.65; and
(D) 0.25
cents per cigarette shall be deposited to the credit of the emergency medical
services special fund established pursuant to section 321‑234;
(4) Section
245-3(a)(8), after June 30, 2009, and prior to July 1, 2013:
(A) 2.0
cents per cigarette shall be deposited to the credit of the Hawaii cancer
research special fund, established pursuant to section 304A-2168, for research
and operating expenses and for capital expenditures;
(B) 0.75
cents per cigarette shall be deposited to the credit of the trauma system
special fund established pursuant to section 321-22.5;
(C) 0.75
cents per cigarette shall be deposited to the credit of the community health
centers special fund established pursuant to section 321‑1.65; and
(D) 0.5
cents per cigarette shall be deposited to the credit of the emergency medical
services special fund established pursuant to section 321-234;
(5) Section
245-3(a)(11), after June 30, 2013, and prior to July 1, 2015:
(A) 2.0
cents per cigarette shall be deposited to the credit of the Hawaii cancer
research special fund, established pursuant to section 304A-2168, for research
and operating expenses and for capital expenditures;
(B) 1.5
cents per cigarette shall be deposited to the credit of the trauma system
special fund established pursuant to section 321-22.5;
(C) 1.25
cents per cigarette shall be deposited to the credit of the community health
centers special fund established pursuant to section 321‑1.65; and
(D) 1.25
cents per cigarette shall be deposited to the credit of the emergency medical
services special fund established pursuant to section 321‑234; [and]
(6) Section 245-3(a)(11), after June 30, 2015, and thereafter:
(A) 2.0
cents per cigarette shall be deposited to the credit of the Hawaii cancer
research special fund, established pursuant to section 304A-2168, for research
and operating expenses and for capital expenditures;
(B) 1.125
cents per cigarette, but not more than $7,400,000 in a fiscal year, shall be
deposited to the credit of the trauma system special fund established pursuant
to section 321-22.5;
(C) 1.25
cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be
deposited to the credit of the community health centers special fund
established pursuant to section 321‑1.65; and
(D) 1.25
cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be
deposited to the credit of the emergency medical services special fund
established pursuant to section 321‑234[.]; and
(7) Section
245-3(a)(12), after June 30, 2019, and thereafter, $200,000 shall be deposited to the
credit of the Hawaii tobacco prevention and control trust fund established
pursuant to section 328L-5.
The
department shall provide an annual accounting of these dispositions to the
legislature."
SECTION 7. Chapter 28, part XII, Hawaii Revised Statutes, is repealed.
SECTION 8. Section 245-17, Hawaii Revised Statutes, is repealed.
["[§245-17]
Delivery sales. (a) No person shall conduct a delivery sale or
otherwise ship or transport, or cause to be shipped or transported, any
electronic smoking device in connection with a delivery sale to any person
under the age of twenty-one.
(b) A person who makes delivery sales shall not
accept a purchase or order from any person without first obtaining the full
name, birth date, and address of that person and verifying the purchaser's age
by:
(1) An
independently operated third-party database or aggregate of databases that are
regularly used by government and businesses for the purpose of age and identity
verification and authentication;
(2) Receiving a copy
of a government issued identification card from the purchaser; or
(3) Requiring age
and signature verification in the shipment process and upon and before actual
delivery.
(c) The purchaser shall certify their age before
completing the purchaser's order.
(d) Any person who violates this section shall be
fined $500 for the first offense. Any subsequent offenses shall subject
the person to a fine of no less than $500 but no more than $2,000.
Any person under twenty-one years of age who violates this
section shall be fined $10 for the first offense; provided that any subsequent
offense shall subject the person to a fine of $50, no part of which shall be
suspended, or the person shall be required to perform no less than forty-eight
hours but no more than seventy-two hours of community service during hours when
the person is not employed or attending school.
(e) The department
shall not adopt rules prohibiting delivery sales.
(f) For the purposes
of this section:
"Delivery sale" means
any sale of an electronic smoking device to a purchaser in the State where either:
(1) The purchaser
submits the order for sale by means of a telephonic or other method of voice
transmission, the mail or any other delivery service, or the internet or other
online service; or
(2) The electronic
smoking device is delivered by use of the mail or any other delivery service.
The foregoing sales of electronic smoking devices
shall constitute a delivery sale regardless of whether the seller is located
within or without the State.
"Electronic smoking
device" means any electronic product that can be used to aerosolize and
deliver nicotine or other substances to the person inhaling from the device,
including but not limited to an electronic cigarette, electronic cigar, electronic
cigarillo, or electronic pipe, and any cartridge or other component of the
device or related product."]
SECTION 9. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act shall take effect on July 1, 2050.
Report Title:
Unlawful Shipment of E-liquid Products; Tobacco Products; E‑liquid; License Fee; Retail Permit Fee; Health Education and Prevention Programs
Description:
Establishes the offense of unlawful shipment of e-liquid products. Includes e-liquid within the definition of "tobacco products", as used in the cigarette tax and tobacco tax law. Increases the license fee for persons engaged as a wholesaler or dealer of cigarettes and tobacco products. Increases the retail tobacco permit fee for retailers engaged in the retail sale of cigarettes and tobacco products. Allocates a portion of collected excise taxes on tobacco products to the Tobacco Prevention and Control Trust Fund. Repeals certain provisions of the Hawaii Revised Statutes relating to electronic smoking devices. (HB1574 HD2)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
