Bill Text: IA SF345 | 2023-2024 | 90th General Assembly | Amended


Bill Title: A bill for an act relating to the regulation of certain tobacco products, providing penalties, and including effective date provisions. (Formerly SSB 1128.) Effective date: 01/01/2025.

Spectrum: Committee Bill

Status: (Engrossed) 2024-04-17 - Message from House. S.J. 865. [SF345 Detail]

Download: Iowa-2023-SF345-Amended.html
Senate File 345 - Reprinted SENATE FILE 345 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1128) (As Amended and Passed by the Senate March 6, 2023 ) A BILL FOR An Act relating to the regulation of certain tobacco products, 1 providing penalties, and including effective date 2 provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 SF 345 (2) 90 pf/jh/mb
S.F. 345 Section 1. NEW SECTION . 453E.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. “Business” means any trade, occupation, activity, 4 or enterprise engaged in for the purpose of selling or 5 distributing tobacco products and devices in this state. 6 2. “Consumer” means any person who has title to or 7 possession of devices in storage, for use or other consumption 8 in this state. 9 3. “Controlled substance” means controlled substance as 10 defined in section 124.101. 11 4. “Delivery sale” means any sale of a device to a purchaser 12 in this state where the purchaser submits the order for 13 such sale by means of a telephonic or other method of voice 14 transmission, mail or any other delivery service, or the 15 internet or other online service and the device is delivered by 16 use of mail or a delivery service. The sale of a device shall 17 constitute a delivery sale regardless of whether the seller is 18 located in this state. “Delivery sale” does not include a sale 19 to a distributor or retailer of a device not for personal use. 20 5. “Department” means the department of revenue. 21 6. a. “Device” means any equipment or product, made in 22 whole or in part of glass or metal, that is designed for use 23 in inhaling through combustion tobacco, hemp, other plant 24 materials, or a controlled substance. “Device” does not 25 include a vapor product or a tobacco smoking product made of 26 briar, meerschaum, clay, or corn cob and not having a surface, 27 aperture, or other feature consisting of metal or glass. 28 b. In determining whether any particular item constitutes a 29 “device” , the following factors may be considered: 30 (1) The instructions, oral or written, provided with the 31 item concerning its use. 32 (2) Any descriptive materials accompanying the item which 33 explain or depict its use. 34 (3) National and local advertising concerning the item’s 35 -1- SF 345 (2) 90 pf/jh/mb 1/ 13
S.F. 345 use. 1 (4) The manner in which the item is displayed for sale. 2 (5) Whether the owner of the place of business, or anyone in 3 control of the item at the place of business, is a legitimate 4 supplier of like or related items to the community, such as a 5 licensed distributor, manufacturer, or subjobber. 6 (6) Direct or circumstantial evidence of the ratio of sales 7 of the item to the total sales of the place of business. 8 (7) The existence and scope of legitimate uses of the item 9 in the community. 10 (8) Expert testimony concerning the item’s use. 11 c. A particular item may constitute a device notwithstanding 12 any lawful use of the item. 13 7. “Device retailer” means a person engaged in the retail 14 sale of tangible personal property who is also engaged in 15 selling devices to the ultimate consumer. 16 8. “Director” means the director of revenue. 17 9. “Distributor” means the same as defined in section 18 453A.42. 19 10. “Manufacturer” means the same as defined in section 20 453A.42. 21 11. “Place of business” means any place where tobacco 22 products and devices are sold, stored, or kept for the purpose 23 of sale or consumption; or for a business within or without the 24 state that conducts delivery sales, any place where tobacco 25 products and devices are sold or are kept for the purpose of 26 sale, including delivery sales. 27 12. “Retail outlet” means each place of business from which 28 tobacco products and devices are sold to consumers. 29 13. “Sale” means any transfer, exchange, or barter, in 30 any manner or by any means whatsoever, for consideration, and 31 includes and means all sales made by any person. 32 14. “Subjobber” means the same as defined in section 33 453A.42. 34 15. “Tobacco products” means cigars; little cigars; 35 -2- SF 345 (2) 90 pf/jh/mb 2/ 13
S.F. 345 cheroots; stogies; periques; granulated, plug cut, crimp cut, 1 ready rubbed, and other smoking tobacco; snuff; cavendish; 2 plug and twist tobacco; fine-cut and other chewing tobaccos; 3 shorts; refuse scraps, clippings, cuttings and sweepings of 4 tobacco, and other kinds and forms of tobacco, prepared in 5 such manner as to be suitable for chewing or smoking in a pipe 6 or otherwise, or both for chewing and smoking; but shall not 7 include cigarettes as defined in section 453A.1. 8 16. “Tobacco retailer” means a retailer as defined in 9 section 453A.42. 10 17. “Use” means the exercise of any right or power 11 incidental to the ownership of tobacco products or devices. 12 18. “Vapor product” means the same as defined in section 13 453A.1. 14 Sec. 2. NEW SECTION . 453E.2 Administration —— rules —— 15 intent. 16 1. The director shall administer this chapter. The director 17 shall collect, supervise, and enforce the collection of all 18 fees, taxes, and civil penalties imposed under this chapter. 19 2. The director may adopt rules pursuant to chapter 17A that 20 are necessary to enforce this chapter. 21 3. The director may designate employees to administer 22 and enforce the provisions of this chapter, including the 23 collection of all taxes provided for in this chapter. In the 24 enforcement, the director may request aid from the attorney 25 general, the special agents of the state, any county attorney, 26 or any peace officer. The director may appoint clerks and 27 additional help as may be needed to administer this chapter. 28 4. This chapter or the holding of a device retailer permit 29 or a device delivery sale permit under this chapter shall not 30 be construed to provide for any of the following: 31 a. Immunity from prosecution or the limitation of the 32 application of other state law and regulations governing 33 tobacco products, drug paraphernalia, or controlled substances. 34 b. Authorization for the possession, marketing, offering 35 -3- SF 345 (2) 90 pf/jh/mb 3/ 13
S.F. 345 for sale, or selling of a device, the possession, marketing, 1 offering for sale, or selling of which is otherwise prohibited 2 by state or federal law. 3 Sec. 3. NEW SECTION . 453E.3 Device retailers —— permits —— 4 fees. 5 1. Permits required. A person shall not engage in the 6 business of a device retailer at any place of business or 7 through delivery sales, unless the person complies with all of 8 the following: 9 a. The person has received and holds a permit as a tobacco 10 retailer pursuant to section 453A.47A that has not been 11 suspended or revoked and is not expired; complies with the 12 provisions of chapter 453A applicable to a tobacco retailer; 13 and sells tobacco products in addition to devices at the retail 14 outlet or through delivery sales. 15 b. The person has received and holds a permit as a device 16 retailer pursuant to this section that has not been suspended 17 or revoked and is not expired, and complies with the provisions 18 of this chapter. 19 2. No sales without device retailer permit. A device 20 retailer shall not sell devices until an application has been 21 filed and the fee prescribed paid for a permit and until such 22 permit is obtained and only while such permit is not suspended, 23 revoked, or expired. 24 3. Number of device retailer permits. An application shall 25 be filed and a permit obtained for each place of business 26 owned or operated by a device retailer located in the state. 27 If an out-of-state device retailer makes delivery sales of 28 devices, an application shall be filed with the department and 29 a permit shall be issued for the out-of-state device retailer’s 30 principal place of business. 31 4. Issuance. Cities may issue device retailer permits 32 to device retailers located within their respective limits. 33 County boards of supervisors may issue device retailer permits 34 to device retailers located in their respective counties, 35 -4- SF 345 (2) 90 pf/jh/mb 4/ 13
S.F. 345 outside of the corporate limits of cities. The city or county 1 shall submit a duplicate of any application for a device 2 retailer permit to the alcoholic beverages division of the 3 department of commerce within thirty days of issuance of a 4 device retailer permit. The alcoholic beverages division of 5 the department of commerce shall submit the current list of 6 all device retailer permits issued to the department of health 7 and human services by the last day of each quarter of a state 8 fiscal year. 9 5. Fees —— expiration. All device retailer permits provided 10 for in this section shall expire on June 30 of each year. A 11 device retailer permit shall not be granted or issued until the 12 applicant has paid the fees provided for in this section for 13 the period ending June 30 next, to the city or county granting 14 the device retailer permit. The fee for a device retailer 15 permit is one thousand five hundred dollars. 16 6. Application. Device retailer permits shall be issued 17 only upon application, accompanied by the one thousand five 18 hundred dollar fee, made upon forms furnished by the department 19 upon written request. The failure to furnish such forms 20 shall be no excuse for the failure to file the form unless 21 absolute refusal is shown. The forms shall specify all of the 22 following: 23 a. The manner under which the device retailer transacts or 24 intends to transact business as a device retailer. 25 b. The principal office, residence, and place of business, 26 to which the device retailer permit is to apply. 27 c. If the applicant is not an individual, the names of the 28 partners if the applicant is a partnership or the names of 29 the principal officers or members if the applicant is a legal 30 entity, and their addresses. 31 d. Such other information as the director shall by rule 32 prescribe. 33 7. Records and reports of device retailers. 34 a. The director shall prescribe the forms necessary for 35 -5- SF 345 (2) 90 pf/jh/mb 5/ 13
S.F. 345 the efficient administration of this section and may require 1 uniform books and records to be used and kept by each device 2 retailer or other person as deemed necessary. 3 b. Every device retailer shall, when requested by the 4 department, make additional reports as the department deems 5 necessary and proper and shall at the request of the department 6 furnish full and complete information pertaining to any 7 transaction of the device retailer involving the purchase or 8 sale of devices, including the number of devices sold. 9 8. Requirements for sale. 10 a. A device retailer shall not sell, give, or otherwise 11 supply a device to any person under twenty-one years of age and 12 shall verify the age of all purchasers of devices. If a device 13 is purchased at a retail outlet, valid proof of the purchaser’s 14 identity and age shall be obtained at the time the device is 15 supplied to the purchaser. If a device is purchased through a 16 delivery sale, valid proof of the purchaser’s identity and age 17 shall be obtained in accordance with section 453E.4. 18 b. A device retailer shall only display and sell devices 19 in a location of a retail outlet where the device retailer 20 ensures that the devices are not visible to a person younger 21 than twenty-one years of age and where no person younger than 22 twenty-one years of age is present or permitted to enter at any 23 time. 24 Sec. 4. NEW SECTION . 453E.4 Delivery sale of devices —— 25 permit —— requirements. 26 1. a. A person shall not mail, ship, or otherwise cause 27 to be delivered any device in connection with a delivery sale 28 to any other person within this state unless the person has 29 applied for and holds a device delivery sale permit as provided 30 in this section. 31 b. A person applying for a device delivery sale permit shall 32 submit an application for the permit electronically, or in a 33 manner prescribed by the director. 34 c. An application submitted pursuant to paragraph “b” shall 35 -6- SF 345 (2) 90 pf/jh/mb 6/ 13
S.F. 345 be accompanied by a permit fee in the amount of one thousand 1 five hundred dollars. 2 d. The director may in accordance with this section issue a 3 device delivery sale permit which shall be valid for one year 4 from the date of issuance unless it is sooner suspended or 5 revoked for a violation of this section. 6 e. A permit issued pursuant to this section may be renewed 7 annually by submitting a renewal application in a manner 8 prescribed by the director, accompanied by the one thousand 9 five hundred dollar permit fee. 10 2. The delivery sale of devices pursuant to this 11 section shall be subject to the following requirements and 12 restrictions: 13 a. All devices delivered by delivery sale directly to a 14 resident of this state shall be sold only by a device delivery 15 sale permit holder. 16 b. A device delivery sale permit holder shall only deliver 17 devices by delivery sale to a resident of this state who is at 18 least twenty-one years of age for the resident’s personal use 19 and not for resale. 20 c. All devices delivered by delivery sale directly to a 21 resident of this state shall be conspicuously labeled with the 22 words “CONTAINS DEVICE: SIGNATURE OF PERSON AGE 21 OR OLDER 23 REQUIRED FOR DELIVERY” or shall be conspicuously labeled with 24 alternative wording preapproved by the director. 25 d. A device delivery sale permit holder shall obtain 26 valid proof of identity and age prior to delivery, and shall 27 obtain the signature of a person age twenty-one or older as a 28 condition of delivery. 29 e. A device delivery sale permit holder shall maintain 30 records of devices delivered which include the name of the 31 device manufacturer, quantity of devices delivered, recipient’s 32 name and address and verification of age on an electronic or 33 paper form of signature from the recipient of the device, and 34 sales and excise taxes paid. Records shall be submitted to 35 -7- SF 345 (2) 90 pf/jh/mb 7/ 13
S.F. 345 the director on a monthly basis in a form and manner to be 1 determined by the director. Records shall be maintained for at 2 least five years. 3 3. A device delivery sale permit holder shall remit to the 4 director an amount equivalent to the applicable sales tax and 5 excise tax on devices subject to delivery sale at the rates 6 specified in section 423.2 and section 453E.5, as applicable. 7 The amount shall be remitted at the time and in the manner 8 provided in section 453E.5. 9 4. A device delivery sale permit holder shall be deemed to 10 have consented to the jurisdiction of the director or any other 11 agency or court in this state concerning enforcement of this 12 section and any related laws, rules, or regulations. A device 13 delivery sale permit holder shall allow the director to perform 14 an audit of records of devices upon request. 15 Sec. 5. NEW SECTION . 453E.5 Sales and excise taxes on 16 sales and delivery sales of devices —— examination of records and 17 premises —— subpoena for witnesses and papers. 18 1. A sale or delivery sale of a device within this state 19 shall be subject to the sales tax provided in chapter 423, 20 subchapter II. All the provisions for the lien of the tax, its 21 collection, and all actions as provided in the uniform sales 22 and use tax administration Act, chapter 423, shall apply to the 23 tax imposed in this chapter. 24 2. There is levied and imposed an excise tax on a device 25 purchased in this state through a sale or purchased for use 26 in this state through a delivery sale of forty percent of the 27 purchase price of the device. 28 3. A device delivery sale permit holder shall be deemed to 29 have waived all claims that such permit holder lacks physical 30 presence within this state for purposes of collecting and 31 remitting the sales and excise taxes. 32 4. A device delivery sale permit holder making taxable 33 delivery sales of devices within this state and a device 34 retailer shall remit to the department all sales and excise 35 -8- SF 345 (2) 90 pf/jh/mb 8/ 13
S.F. 345 taxes due on such sales at the times and in the manner as 1 established by rule of the director. 2 5. The director may adopt rules pursuant to chapter 17A to 3 administer this section. 4 6. Excise taxes collected under this section shall be 5 deposited in the specialty courts program fund created in 6 section 453E.6. 7 7. a. For the purpose of enabling the department to 8 determine the tax liability of device delivery sale permit 9 holders, device retailers, or any other person dealing in 10 devices or to determine whether a tax liability has been 11 incurred, the department shall have the right to inspect any 12 premises of the device delivery sale permit holder, device 13 retailer, or other person dealing in devices located within 14 or without the state of Iowa where devices are manufactured, 15 produced, made, stored, transported, sold, or offered for 16 sale or exchange, and to examine all of the records required 17 to be kept or any other records that may be kept incident 18 to the conduct of the business of said device delivery sale 19 permit holder, device retailer, or any other person dealing in 20 devices. 21 b. The department shall also have the right as an incident 22 to determining the tax liability, or whether a tax liability 23 has been incurred, to examine all stocks of devices and to 24 remain upon the premises for such length of time as may be 25 necessary to fully determine the tax liability, or whether a 26 tax liability has been incurred. 27 c. It shall be unlawful for a permit holder to fail to 28 produce upon demand of the department any records required to 29 be kept or to hinder or prevent in any manner the inspection of 30 the records or the examination of the premises. 31 d. In the case of any departmental inspection conducted 32 under this section requiring department personnel to travel 33 outside the state of Iowa, any additional costs incurred by 34 the department for out-of-state travel expenses shall be borne 35 -9- SF 345 (2) 90 pf/jh/mb 9/ 13
S.F. 345 by the device delivery sale permit holder, device retailer, or 1 other person dealing in devices. These additional costs shall 2 be those costs in excess of the costs of a similar inspection 3 conducted at the geographical point located within the state 4 of Iowa nearest to the out-of-state inspection point. In 5 lieu of conducting an on-premises out-of-state inspection, 6 the department shall have the authority to direct the device 7 delivery sale permit holder, device retailer, or other person 8 dealing in devices to assemble and transport all records 9 described in this subsection to the nearest practical and 10 convenient geographical location in Iowa for inspection by the 11 department. 12 Sec. 6. NEW SECTION . 453E.6 Specialty courts program fund. 13 1. A specialty courts program fund is created in the state 14 treasury under the control of the governor’s office of drug 15 control policy. Moneys from permit fees, with the exception 16 of permit fees collected by cities or counties in the issuance 17 of permits, and excise taxes imposed and collected pursuant 18 to section 453E.5, shall be deposited in the fund. Permit 19 fees collected by cities under this chapter shall be paid to 20 the treasurer of the city where the permit is effective, or 21 to another city officer as designated by the city council, 22 and credited to the general fund of the city. Permit fees 23 collected by counties under this chapter shall be paid to 24 the county treasurer and credited to the general fund of the 25 county. 26 2. Moneys in the fund are appropriated to the governor’s 27 office of drug control policy to be used for the purpose of the 28 support of specialty courts to address underlying substance 29 use disorder-related and mental health-related issues that 30 contribute to the contact of individuals with the justice 31 system. 32 3. The drug policy coordinator of the governor’s office of 33 drug control policy shall develop criteria for approval of a 34 request for specialty courts program funding. Annually, by 35 -10- SF 345 (2) 90 pf/jh/mb 10/ 13
S.F. 345 May 1, the state court administrator shall submit a specialty 1 courts funding request for the upcoming fiscal year to the drug 2 policy coordinator of the governor’s office of drug control 3 policy for approval, and the drug policy coordinator shall 4 approve or reject any such request no later than June 1. The 5 state court administrator may submit a subsequent request 6 within fifteen days of notification of the rejection of an 7 initial request. The state court administrator shall consult 8 with the director of the department of corrections prior to 9 submitting any funding request that involves the department of 10 corrections. 11 4. The fund shall be separate from the general fund of the 12 state and shall not be considered part of the general fund of 13 the state. The moneys in the fund shall not be considered 14 revenue of the state, but rather shall be moneys of the fund. 15 The moneys in the fund are not subject to reversion to the 16 general fund of the state under section 8.33 and shall not 17 be transferred, used, obligated, appropriated, or otherwise 18 encumbered, except to provide for the purposes of this section. 19 Notwithstanding section 12C.7, subsection 2, interest or 20 earnings on moneys deposited in the fund shall be credited to 21 the fund. 22 5. The treasurer of state shall provide a quarterly report 23 of fund activities and balances to the drug policy coordinator 24 of the governor’s office of drug control policy. 25 Sec. 7. NEW SECTION . 453E.7 Permits —— suspension —— 26 revocation —— penalties. 27 1. The provisions of chapter 453A, including the permit 28 suspension and revocation provisions and the civil penalties 29 established in section 453A.22, shall apply to tobacco 30 retailers who are also device retailer permit holders or 31 device delivery sale permit holders under this chapter. The 32 provisions of chapter 453A applicable to persons other than 33 tobacco retailers who violate chapter 453A shall also apply to 34 persons who violate this chapter. 35 -11- SF 345 (2) 90 pf/jh/mb 11/ 13
S.F. 345 2. A person holding a device retailer permit or a device 1 delivery sale permit under this chapter who violates this 2 chapter by marketing or selling a device to be used or 3 attempted to be used or that is capable of use in combination 4 with tobacco, hemp, other plant materials, or a controlled 5 substance, to knowingly or intentionally and primarily inhale 6 the material or substance through combustion commits a serious 7 misdemeanor and is also subject to permit revocation. 8 3. a. If a person holding a device retailer permit or a 9 device delivery sale permit under this chapter has willfully 10 violated this chapter, the department shall revoke the permit 11 upon notice and hearing. The hearing before the department may 12 be held at a site in the state as the department may direct. 13 The notice shall be given by mailing a copy to the permit 14 holder’s place of business as it appears on the application 15 for a permit. If, upon hearing, the department finds that the 16 violation has occurred, the department may revoke the permit. 17 b. If a device retailer permit or a device delivery 18 sale permit is suspended or revoked under this section, the 19 suspension or revocation shall only apply to the place of 20 business at which the violation occurred and shall not apply to 21 any other place of business to which the permit applies but at 22 which the violation did not occur. 23 c. The department or local authority shall report the 24 suspension or revocation of a device retailer permit or a 25 device delivery sale permit under this section to the alcoholic 26 beverages division of the department of commerce within thirty 27 days of the suspension or revocation of the permit. 28 4. In addition to any other applicable penalties, a device 29 retailer permit holder or a device delivery sale permit holder 30 who violates this chapter shall be subject to the following: 31 a. For a first violation, a civil penalty of five hundred 32 dollars. 33 b. For a second violation, a civil penalty of one thousand 34 dollars. 35 -12- SF 345 (2) 90 pf/jh/mb 12/ 13
S.F. 345 c. A third violation constitutes grounds for suspension or 1 revocation of the permit under this chapter. 2 5. A person other than a device retailer permit holder or a 3 device delivery sale permit holder who violates this chapter, 4 including a person who engages in the business of a device 5 retailer at any place of business or through delivery sales 6 without holding an applicable, valid permit under this chapter, 7 commits a serious misdemeanor and shall also be subject to the 8 following civil penalties: 9 a. For a first violation, a civil penalty of one thousand 10 dollars. 11 b. For a second violation, a civil penalty of two thousand 12 dollars. 13 c. For a third or subsequent violation, a civil penalty of 14 five thousand dollars. 15 Sec. 8. EFFECTIVE DATE. This Act takes effect January 1, 16 2024. 17 -13- SF 345 (2) 90 pf/jh/mb 13/ 13
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