1     
ELECTRONIC CIGARETTE AND OTHER NICOTINE

2     
PRODUCT AMENDMENTS

3     
2019 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Paul Ray

6     
Senate Sponsor: Allen M. Christensen

7     

8     LONG TITLE
9     General Description:
10          This bill enacts and amends provisions relating to electronic cigarette products,
11     alternative nicotine products, and nontherapeutic nicotine products.
12     Highlighted Provisions:
13          This bill:
14          ▸     defines terms;
15          ▸     implements permitting requirements and processes for the sale of an alternative
16     nicotine product or a nontherapeutic nicotine product;
17          ▸     applies civil penalties to the improper sale of an alternative nicotine product or a
18     nontherapeutic nicotine product;
19          ▸     requires certain other nicotine products that contain nicotine to have a statement on
20     the exterior package that the product contains nicotine;
21          ▸     imposes licensing and bonding requirements on a person that sells or distributes an
22     alternative nicotine product or a nontherapeutic nicotine product;
23          ▸     imposes an excise tax on the sale of an electronic cigarette substance, a prefilled
24     electronic cigarette, an alternative nicotine product, a nontherapeutic nicotine device
25     substance, and a prefilled nontherapeutic nicotine device in the state;
26          ▸     provides for the remittance of the tax collected;
27          ▸     creates the Electronic Cigarette Substance and Other Nicotine Product Tax

28     Restricted Account;
29          ▸     addresses use of revenue from the taxation of an electronic cigarette substance, a
30     prefilled electronic cigarette, an alternative nicotine product, a nontherapeutic
31     nicotine device substance, and a prefilled nontherapeutic nicotine device;
32          ▸     provides criminal penalties for a sale or purchase of an electronic cigarette product,
33     an alternative nicotine product, or a nontherapeutic nicotine product, in violation of
34     law; and
35          ▸     makes technical and conforming changes.
36     Money Appropriated in this Bill:
37          None
38     Other Special Clauses:
39          This bill provides a special effective date.
40     Utah Code Sections Affected:
41     AMENDS:
42          10-8-41.6, as last amended by Laws of Utah 2018, Chapter 231
43          17-50-333, as last amended by Laws of Utah 2018, Chapter 231
44          26-57-101, as enacted by Laws of Utah 2015, Chapter 132
45          26-57-102, as enacted by Laws of Utah 2015, Chapter 132
46          26-62-101, as enacted by Laws of Utah 2018, Chapter 231
47          26-62-102, as renumbered and amended by Laws of Utah 2018, Chapter 231
48          26-62-201, as enacted by Laws of Utah 2018, Chapter 231
49          26-62-202, as enacted by Laws of Utah 2018, Chapter 231
50          26-62-301, as enacted by Laws of Utah 2018, Chapter 231
51          26-62-304, as renumbered and amended by Laws of Utah 2018, Chapter 231
52          26-62-305, as renumbered and amended by Laws of Utah 2018, Chapter 231
53          26-62-306, as renumbered and amended by Laws of Utah 2018, Chapter 231
54          26A-1-128, as enacted by Laws of Utah 2018, Chapter 231
55          59-14-102, as last amended by Laws of Utah 2013, Chapter 148
56          59-14-201, as last amended by Laws of Utah 2018, Chapter 231
57          59-14-801, as enacted by Laws of Utah 2015, Chapter 132
58          59-14-802, as enacted by Laws of Utah 2015, Chapter 132

59          59-14-803, as last amended by Laws of Utah 2018, Chapter 231
60          76-10-101, as last amended by Laws of Utah 2015, Chapters 66, 132 and last amended
61     by Coordination Clause, Laws of Utah 2015, Chapter 132
62          76-10-104, as last amended by Laws of Utah 2010, Chapter 114
63          76-10-104.1, as last amended by Laws of Utah 2013, Chapter 278
64          76-10-105, as last amended by Laws of Utah 2018, Chapter 415
65          76-10-105.1, as last amended by Laws of Utah 2018, Chapter 231
66     ENACTS:
67          26-57-104, Utah Code Annotated 1953
68          59-14-804, Utah Code Annotated 1953
69          59-14-805, Utah Code Annotated 1953
70          59-14-806, Utah Code Annotated 1953
71          59-14-807, Utah Code Annotated 1953
72     

73     Be it enacted by the Legislature of the state of Utah:
74          Section 1. Section 10-8-41.6 is amended to read:
75          10-8-41.6. Regulation of retail tobacco specialty business.
76          (1) As used in this section:
77          (a) "Alternative nicotine product" means the same as that term is defined in Section
78     59-14-102.
79          [(a)] (b) "Community location" means:
80          (i) a public or private kindergarten, elementary, middle, junior high, or high school;
81          (ii) a licensed child-care facility or preschool;
82          (iii) a trade or technical school;
83          (iv) a church;
84          (v) a public library;
85          (vi) a public playground;
86          (vii) a public park;
87          (viii) a youth center or other space used primarily for youth oriented activities;
88          (ix) a public recreational facility;
89          (x) a public arcade; or

90          (xi) for a new license issued on or after July 1, 2018, a homeless shelter.
91          [(b)] (c) "Department" means the Department of Health, created in Section 26-1-4.
92          (d) "Electronic cigarette product" means the same as that term is defined in Section
93     59-14-102.
94          [(c)] (e) "Local health department" means the same as that term is defined in Section
95     26A-1-102.
96          (f) "Nontherapeutic nicotine product" means the same as that term is defined in Section
97     59-14-102.
98          [(d)] (g) "Permittee" means a person licensed under this section to conduct business as
99     a retail tobacco specialty business.
100          [(e)] (h) "Retail tobacco specialty business" means a commercial establishment in
101     which:
102          (i) the sale of tobacco products, electronic cigarette products, alternative nicotine
103     products, and nontherapeutic nicotine products accounts for more than 35% of the total
104     quarterly gross receipts for the establishment;
105          (ii) 20% or more of the public retail floor space is allocated to the offer, display, or
106     storage of tobacco products, electronic cigarette products, alternative nicotine products, and
107     nontherapeutic nicotine products;
108          (iii) 20% or more of the total shelf space is allocated to the offer, display, or storage of
109     tobacco products, electronic cigarette products, alternative nicotine products, and
110     nontherapeutic nicotine products; or
111          (iv) the retail space features a self-service display for tobacco products, electronic
112     cigarette products, alternative nicotine products, and nontherapeutic nicotine products.
113          [(f)] (i) "Self-service display" means the same as that term is defined in Section
114     76-10-105.1.
115          [(g)] (j) "Tobacco product" means:
116          (i) any cigar[,] or cigarette, [or electronic cigarette,] as those terms are defined in
117     Section 76-10-101;
118          (ii) a tobacco product, as that term is defined in Section 59-14-102, including:
119          (A) chewing tobacco; or
120          (B) any substitute for a tobacco product, including flavoring or additives to tobacco;

121     and
122          (iii) tobacco paraphernalia, as that term is defined in Section 76-10-104.1.
123          (2) The regulation of a retail tobacco specialty business is an exercise of the police
124     powers of the state, and through delegation, to other governmental entities.
125          (3) (a) A person may not operate a retail tobacco specialty business in a municipality
126     unless the person obtains a license from the municipality in which the retail tobacco specialty
127     business is located.
128          (b) A municipality may only issue a retail tobacco specialty business license to a
129     person if the person complies with the provisions of Subsections (4) and (5).
130          (4) (a) Except as provided in Subsection (7), a municipality may not issue a license for
131     a person to conduct business as a retail tobacco specialty business if the retail tobacco specialty
132     business is located within:
133          (i) 1,000 feet of a community location;
134          (ii) 600 feet of another retail tobacco specialty business; or
135          (iii) 600 feet from property used or zoned for:
136          (A) agriculture use; or
137          (B) residential use.
138          (b) For purposes of Subsection (4)(a), the proximity requirements shall be measured in
139     a straight line from the nearest entrance of the retail tobacco specialty business to the nearest
140     property boundary of a location described in Subsections (4)(a)(i) through (iii), without regard
141     to intervening structures or zoning districts.
142          (5) (a) Except as provided in Subsection (5)(b), beginning July 1, 2018, a municipality
143     may not issue or renew a license for a person to conduct business as a retail tobacco specialty
144     business until the person provides the municipality with proof that the retail tobacco specialty
145     business has:
146          (i) a valid permit for a retail tobacco specialty business issued under Title 26, Chapter
147     62, Tobacco, Electronic Cigarette, and Other Nicotine Product Retail Permit, by the local
148     health department having jurisdiction over the area in which the retail tobacco specialty
149     business is located; and
150          (ii) (A) a valid license to sell [tobacco products from] a tobacco product issued by the
151     State Tax Commission in accordance with Section 59-14-201 or 59-14-301; or

152          (B) a valid license to sell an electronic cigarette product, an alternative nicotine
153     product, or a nontherapeutic nicotine product issued by the State Tax Commission in
154     accordance with Section 59-14-803.
155          (b) A person that was licensed to conduct business as a retail tobacco specialty
156     business in a municipality before July 1, 2018, shall obtain a permit from a local health
157     department under Title 26, Chapter 62, Tobacco, Electronic Cigarette, and Other Nicotine
158     Product Retail Permit, on or before January 1, 2019.
159          (6) (a) Nothing in this section:
160          (i) requires a municipality to issue a retail tobacco specialty business license; or
161          (ii) prohibits a municipality from adopting more restrictive requirements on a person
162     seeking a license or renewal of a license to conduct business as a retail tobacco specialty
163     business.
164          (b) A municipality may suspend or revoke a retail tobacco specialty business license
165     issued under this section:
166          (i) if a licensee engages in a pattern of unlawful activity under Title 76, Chapter 10,
167     Part 16, Pattern of Unlawful Activity Act;
168          (ii) if a licensee violates the regulations restricting the sale and distribution of
169     cigarettes and smokeless tobacco to protect children and adolescents issued by the United
170     States Food and Drug Administration, 21 C.F.R. Part 1140;
171          (iii) upon the recommendation of the department or a local health department under
172     Title 26, Chapter 62, Tobacco, Electronic Cigarette, and Other Nicotine Product Retail Permit;
173     or
174          (iv) under any other provision of state law or local ordinance.
175          (7) (a) In accordance with Subsection (7)(b), a retail tobacco specialty business that has
176     a business license and is operating in a municipality in accordance with all applicable laws
177     except for the requirement in Subsection (4), on or before December 31, 2015, is exempt from
178     Subsection (4).
179          (b) A retail tobacco specialty business may maintain an exemption under Subsection
180     (7)(a) if:
181          (i) the retail tobacco specialty business license is renewed continuously without lapse
182     or permanent revocation;

183          (ii) the retail tobacco specialty business does not close for business or otherwise
184     suspend the sale of tobacco products, electronic cigarette products, alternative nicotine
185     products, and nontherapeutic nicotine products for more than 60 consecutive days;
186          (iii) the retail tobacco specialty business does not substantially change the business
187     premises or business operation; and
188          (iv) the retail tobacco specialty business maintains the right to operate under the terms
189     of other applicable laws, including:
190          (A) Title 26, Chapter 38, Utah Indoor Clean Air Act;
191          (B) zoning ordinances;
192          (C) building codes; and
193          (D) the requirements of a retail tobacco specialty business license issued before
194     December 31, 2015.
195          Section 2. Section 17-50-333 is amended to read:
196          17-50-333. Regulation of retail tobacco specialty business.
197          (1) As used in this section:
198          (a) "Alternative nicotine product" means the same as that term is defined in Section
199     59-14-102.
200          [(a)] (b) "Community location" means:
201          (i) a public or private kindergarten, elementary, middle, junior high, or high school;
202          (ii) a licensed child-care facility or preschool;
203          (iii) a trade or technical school;
204          (iv) a church;
205          (v) a public library;
206          (vi) a public playground;
207          (vii) a public park;
208          (viii) a youth center or other space used primarily for youth oriented activities;
209          (ix) a public recreational facility;
210          (x) a public arcade; or
211          (xi) for a new license issued on or after July 1, 2018, a homeless shelter.
212          [(b)] (c) "Department" means the Department of Health, created in Section 26-1-4.
213          (d) "Electronic cigarette product" means the same as that term is defined in Section

214     59-14-102.
215          [(c)] (e) "Licensee" means a person licensed under this section to conduct business as a
216     retail tobacco specialty business.
217          [(d)] (f) "Local health department" means the same as that term is defined in Section
218     26A-1-102.
219          (g) "Nontherapeutic nicotine product" means the same as that term is defined in
220     Section 59-14-102.
221          [(e)] (h) "Retail tobacco specialty business" means a commercial establishment in
222     which:
223          (i) the sale of tobacco products, electronic cigarette products, alternative nicotine
224     products, and nontherapeutic nicotine products accounts for more than 35% of the total
225     quarterly gross receipts for the establishment;
226          (ii) 20% or more of the public retail floor space is allocated to the offer, display, or
227     storage of tobacco products, electronic cigarette products, alternative nicotine products, and
228     nontherapeutic nicotine products;
229          (iii) 20% or more of the total shelf space is allocated to the offer, display, or storage of
230     tobacco products, electronic cigarette products, alternative nicotine products, and
231     nontherapeutic nicotine products; or
232          (iv) the retail space features a self-service display for tobacco products, electronic
233     cigarette products, alternative nicotine products, and nontherapeutic nicotine products.
234          [(f)] (i) "Self-service display" means the same as that term is defined in Section
235     76-10-105.1.
236          [(g)] (j) "Tobacco product" means:
237          (i) any cigar[,] or cigarette, [or electronic cigarette] as those terms are defined in
238     Section 76-10-101;
239          (ii) a tobacco product, as that term is defined in Section 59-14-102, including:
240          (A) chewing tobacco; or
241          (B) any substitute for a tobacco product, including flavoring or additives to tobacco;
242     and
243          (iii) tobacco paraphernalia, as that term is defined in Section 76-10-104.1.
244          (2) The regulation of a retail tobacco specialty business is an exercise of the police

245     powers of the state, and through delegation, to other governmental entities.
246          (3) (a) A person may not operate a retail tobacco specialty business in a county unless
247     the person obtains a license from the county in which the retail tobacco specialty business is
248     located.
249          (b) A county may only issue a retail tobacco specialty business license to a person if
250     the person complies with the provisions of Subsections (4) and (5).
251          (4) (a) Except as provided in Subsection (7), a county may not issue a license for a
252     person to conduct business as a retail tobacco specialty business if the retail tobacco specialty
253     business is located within:
254          (i) 1,000 feet of a community location;
255          (ii) 600 feet of another retail tobacco specialty business; or
256          (iii) 600 feet from property used or zoned for:
257          (A) agriculture use; or
258          (B) residential use.
259          (b) For purposes of Subsection (4)(a), the proximity requirements shall be measured in
260     a straight line from the nearest entrance of the retail tobacco specialty business to the nearest
261     property boundary of a location described in Subsections (4)(a)(i) through (iii), without regard
262     to intervening structures or zoning districts.
263          (5) (a) Except as provided in Subsection (5)(b), beginning July 1, 2018, a county may
264     not issue or renew a license for a person to conduct business as a retail tobacco specialty
265     business until the person provides the county with proof that the retail tobacco specialty
266     business has:
267          (i) a valid permit for a retail tobacco specialty business issued under Title 26, Chapter
268     62, Tobacco, Electronic Cigarette, and Other Nicotine Product Retail Permit, by the local
269     health department having jurisdiction over the area in which the retail tobacco specialty
270     business is located; and
271          (ii) (A) a valid license to sell [tobacco products from] a tobacco product issued by the
272     State Tax Commission in accordance with Section 59-14-201 or 59-14-301; or
273          (B) a valid license to sell an electronic cigarette product, an alternative nicotine
274     product, or a nontherapeutic nicotine product issued by the State Tax Commission in
275     accordance with Section 59-14-803.

276          (b) A person that was licensed to conduct business as a retail tobacco specialty
277     business in a county before July 1, 2018, shall obtain a permit from a local health department
278     under Title 26, Chapter 62, Tobacco, Electronic Cigarette, and Other Nicotine Product Retail
279     Permit, on or before January 1, 2019.
280          (6) (a) Nothing in this section:
281          (i) requires a county to issue a retail tobacco specialty business license; or
282          (ii) prohibits a county from adopting more restrictive requirements on a person seeking
283     a license or renewal of a license to conduct business as a retail tobacco specialty business.
284          (b) A county may suspend or revoke a retail tobacco specialty business license issued
285     under this section:
286          (i) if a licensee engages in a pattern of unlawful activity under Title 76, Chapter 10,
287     Part 16, Pattern of Unlawful Activity Act;
288          (ii) if a licensee violates the regulations restricting the sale and distribution of
289     cigarettes and smokeless tobacco to protect children and adolescents issued by the United
290     States Food and Drug Administration, 21 C.F.R. Part 1140;
291          (iii) upon the recommendation of the department or a local health department under
292     Title 26, Chapter 62, Tobacco, Electronic Cigarette, and Other Nicotine Product Retail Permit;
293     or
294          (iv) under any other provision of state law or local ordinance.
295          (7) (a) In accordance with Subsection (7)(b), a retail tobacco specialty business that has
296     a business license and is operating in a county in accordance with all applicable laws except for
297     the requirement in Subsection (4), on or before December 31, 2015, is exempt from Subsection
298     (4).
299          (b) A retail tobacco specialty business may maintain an exemption under Subsection
300     (7)(a) if:
301          (i) the retail tobacco specialty business license is renewed continuously without lapse
302     or permanent revocation;
303          (ii) the retail tobacco specialty business does not close for business or otherwise
304     suspend the sale of tobacco products, electronic cigarette products, alternative nicotine
305     products, and nontherapeutic nicotine products for more than 60 consecutive days;
306          (iii) the retail tobacco specialty business does not substantially change the business

307     premises or business operation; and
308          (iv) the retail tobacco specialty business maintains the right to operate under the terms
309     of other applicable laws, including:
310          (A) Title 26, Chapter 38, Utah Indoor Clean Air Act;
311          (B) zoning ordinances;
312          (C) building codes; and
313          (D) the requirements of a retail tobacco specialty business license issued before
314     December 31, 2015.
315          Section 3. Section 26-57-101 is amended to read:
316     
CHAPTER 57. ELECTRONIC CIGARETTE AND OTHER NICOTINE PRODUCT

317     
REGULATION ACT

318          26-57-101. Title.
319          This chapter is known as the "Electronic Cigarette and Other Nicotine Product
320     Regulation Act."
321          Section 4. Section 26-57-102 is amended to read:
322          26-57-102. Definitions.
323          As used in this chapter:
324          (1) "Alternative nicotine product" means the same as that term is defined in Section
325     59-14-102.
326          [(1)] (2) "Cigarette" means the same as that term is defined in Section 59-14-102.
327          [(2)] (3) "Electronic cigarette" means the same as that term is defined in Section
328     [59-14-802] 59-14-102.
329          [(3)] (4) "Electronic cigarette product" means an electronic cigarette or an electronic
330     cigarette substance.
331          [(4)] (5) "Electronic cigarette substance" means the same as that term is defined in
332     Section [59-14-802] 59-14-102.
333          (6) "Local health department" means the same as that term is defined in Section
334     26A-1-102.
335          [(5)] (7) "Manufacture" includes:
336          (a) to cast, construct, or make electronic cigarettes; or
337          (b) to blend, make, process, or prepare an electronic cigarette substance.

338          [(6)] (8) "Manufacturer sealed electronic cigarette substance" means an electronic
339     cigarette substance that is sold in a container that:
340          (a) is [pre-filled] prefilled by the electronic cigarette substance manufacturer; and
341          (b) the electronic cigarette manufacturer does not intend for a consumer to open.
342          (9) "Nicotine" means the same as that term is defined in Section 59-14-102.
343          (10) "Nontherapeutic nicotine device" means the same as that term is defined in
344     Section 59-14-102.
345          Section 5. Section 26-57-104 is enacted to read:
346          26-57-104. Labeling of other nicotine products containing nicotine.
347          (1) Any alternative nicotine product or nontherapeutic nicotine device shall contain the
348     statement described in Subsection (2) if the alternative nicotine product or the nontherapeutic
349     nicotine device:
350          (a) (i) is not a tobacco product as defined in 21 U.S.C. Sec. 321 and related federal
351     regulations; or
352          (ii) is not otherwise required to contain a nicotine warning; and
353          (b) contains nicotine.
354          (2) A statement shall appear on the exterior packaging of an alternative nicotine
355     product or a nontherapeutic nicotine device described in Subsection (1) as follows:
356          "This product contains nicotine."
357          Section 6. Section 26-62-101 is amended to read:
358     
CHAPTER 62. TOBACCO, ELECTRONIC CIGARETTE, AND OTHER

359     
NICOTINE PRODUCT RETAIL PERMIT

360          26-62-101. Title.
361          This chapter is known as "Tobacco, Electronic Cigarette, and Other Nicotine Product
362     Retail Permit."
363          Section 7. Section 26-62-102 is amended to read:
364          26-62-102. Definitions.
365          As used in this chapter:
366          (1) "Alternative nicotine product" means the same as that term is defined in Section
367     59-14-102.
368          [(1)] (2) "Community location" means the same as that term is defined:

369          (a) as it relates to a municipality, in Section 10-8-41.6; and
370          (b) as it relates to a county, in Section 17-50-333.
371          (3) "Electronic cigarette product" means the same as that term is defined in Section
372     59-14-102.
373          [(2)] (4) "Employee" means an employee of a tobacco retailer.
374          [(3)] (5) "Enforcing agency" means the state Department of Health[,] or any local
375     health department enforcing the provisions of this chapter.
376          [(4)] (6) "General tobacco retailer" means a tobacco retailer that is not a retail tobacco
377     specialty business.
378          [(5)] (7) "Local health department" means the same as that term is defined in Section
379     26A-1-102.
380          (8) "Nontherapeutic nicotine product" means the same as that term is defined in
381     Section 59-14-102.
382          [(6)] (9) "Permit" means a tobacco retail permit issued under this chapter.
383          [(7)] (10) "Retail tobacco specialty business" means the same as that term is defined:
384          (a) as it relates to a municipality, in Section 10-8-41.6; and
385          (b) as it relates to a county, in Section 17-50-333.
386          [(8)] (11) "Tax commission license" means a license issued by the State Tax
387     Commission under:
388          (a) Section 59-14-201 to sell cigarettes at retail;
389          (b) Section 59-14-301 to sell [tobacco products] a tobacco product, as that term is
390     defined in Section 59-14-102, at retail; or
391          (c) Section 59-14-803 to sell an electronic cigarette product, an alternative nicotine
392     product, or a nontherapeutic nicotine product.
393          [(9)] (12) "Tobacco product" means:
394          (a) a cigar[,] or cigarette, [or electronic cigarette] as those terms are defined in Section
395     76-10-101;
396          (b) a tobacco product, as that term is defined in Section 59-14-102, including:
397          (i) chewing tobacco; or
398          (ii) any substitute for a tobacco product, including flavoring or additives to tobacco; or
399          (c) tobacco paraphernalia, as that term is defined in Section 76-10-104.1.

400          [(10)] (13) "Tobacco retailer" means a person that is required to obtain a tax
401     commission license.
402          Section 8. Section 26-62-201 is amended to read:
403          26-62-201. Permitting requirement.
404          (1) (a) Beginning July 1, 2018, a tobacco retailer shall hold a valid tobacco retail
405     permit issued in accordance with this chapter by the local health department with jurisdiction
406     over the physical location where the tobacco retailer operates.
407          (b) A tobacco retailer without a valid permit may not:
408          (i) place [tobacco products] a tobacco product, an electronic cigarette product, an
409     alternative nicotine product, or a nontherapeutic nicotine product in public view;
410          (ii) display any advertisement related to [tobacco products] a tobacco product, an
411     electronic cigarette product, an alternative nicotine product, or a nontherapeutic nicotine
412     product that promotes the sale, distribution, or use of those products; or
413          (iii) sell, offer for sale, or offer to exchange for any form of consideration, tobacco [or],
414     a tobacco [products] product, an electronic cigarette product, an alternative nicotine product, or
415     a nontherapeutic nicotine product.
416          (2) A local health department may issue a permit under this chapter for a tobacco
417     retailer in the classification of:
418          (a) a general tobacco retailer; or
419          (b) a retail tobacco specialty business.
420          (3) A permit under this chapter is:
421          (a) valid only for one physical location, including a vending machine;
422          (b) valid only at one fixed business address; and
423          (c) if multiple tobacco retailers are at the same address, separately required for each
424     tobacco retailer.
425          (4) Notwithstanding the requirement in Subsection (1), a person that holds a tax
426     commission license that was valid on July 1, 2018:
427          (a) may operate without a permit under this chapter until December 31, 2018; and
428          (b) shall obtain a permit from a local health department under this chapter before
429     January 1, 2019.
430          Section 9. Section 26-62-202 is amended to read:

431          26-62-202. Permit application.
432          (1) A local health department shall issue a permit under this chapter for a tobacco
433     retailer if the local health department determines that the applicant:
434          (a) accurately provided all information required under Subsection (3) and, if applicable,
435     Subsection (4); and
436          (b) meets all requirements for a permit under this chapter.
437          (2) An applicant for a permit shall:
438          (a) submit an application described in Subsection (3) to the local health department
439     with jurisdiction over the area where the tobacco retailer is located; and
440          (b) pay all applicable fees described in Section 26-62-203.
441          (3) The application for a permit shall include:
442          (a) the name, address, and telephone number of each proprietor;
443          (b) the name and mailing address of each proprietor authorized to receive
444     permit-related communication and notices;
445          (c) the business name, address, and telephone number of the single, fixed location for
446     which a permit is sought;
447          (d) evidence that the location for which a permit is sought has a valid tax commission
448     license;
449          (e) information regarding whether, in the past 24 months, any proprietor of the tobacco
450     retailer has been determined to have violated, or has been a proprietor at a location that has
451     been determined to have violated:
452          (i) a provision of this chapter;
453          (ii) Chapter 38, Utah Indoor Clean Air Act;
454          (iii) Title 76, Chapter 10, Part 1, Cigarettes and Tobacco and Psychotoxic Chemical
455     Solvents;
456          (iv) Title 76, Chapter 10, Part 16, Pattern of Unlawful Activity Act;
457          (v) regulations restricting the sale and distribution of cigarettes and smokeless tobacco
458     issued by the United States Food and Drug Administration, 21 C.F.R. Part 1140; or
459          (vi) any other provision of state law or local ordinance regarding the sale, marketing, or
460     distribution of a tobacco [products] product, an electronic cigarette product, an alternative
461     nicotine product, or a nontherapeutic nicotine product; and

462          (f) the dates of all violations disclosed under this Subsection (3).
463          (4) (a) In addition to the information described in Subsection (3), an applicant for a
464     retail tobacco specialty business permit shall include evidence showing whether the business is
465     located within:
466          (i) 1,000 feet of a community location;
467          (ii) 600 feet of another retail tobacco specialty business; or
468          (iii) 600 feet of property used or zoned for agricultural or residential use.
469          (b) For purposes of Subsection (4)(a), the proximity requirements shall be measured in
470     a straight line from the nearest entrance of the retail tobacco specialty business to the nearest
471     property boundary of a location described in Subsections (4)(a)(i) through (iii), without regard
472     to intervening structures or zoning districts.
473          (5) The department or a local health department may not deny a permit to a retail
474     tobacco specialty business under Subsection (4) if the person obtained a license to operate the
475     retail tobacco specialty business before December 31, 2015, from:
476          (a) a municipality under Section 10-8-41.6; or
477          (b) a county under Section 17-50-333.
478          (6) (a) The department shall establish by rule made in accordance with Title 63G,
479     Chapter 3, Utah Administrative Rulemaking Act, a permit process for local health departments
480     in accordance with this chapter.
481          (b) The permit process established by the department under Subsection (6)(a) may not
482     require any information in an application that is not required by this section.
483          Section 10. Section 26-62-301 is amended to read:
484          26-62-301. Permit violation.
485          A person is in violation of the permit issued under this chapter if the person violates:
486          (1) a provision of this chapter;
487          (2) a provision of licensing laws under Section 10-8-41.6 or Section 17-50-333;
488          (3) a provision of Title 76, Chapter 10, Part 1, Cigarettes and Tobacco and Psychotoxic
489     Chemical Solvents;
490          (4) a provision of Title 76, Chapter 10, Part 16, Pattern of Unlawful Activity Act;
491          (5) a regulation restricting the sale and distribution of cigarettes and smokeless tobacco
492     issued by the United States Food and Drug Administration under 21 C.F.R. Part 1140; or

493          (6) any other provision of state law or local ordinance regarding the sale, marketing, or
494     distribution of a tobacco [products] product, an electronic cigarette product, an alternative
495     nicotine product, or a nontherapeutic nicotine product.
496          Section 11. Section 26-62-304 is amended to read:
497          26-62-304. Hearing -- Evidence of criminal conviction.
498          (1) At a civil hearing conducted under Section 26-62-302, evidence of the final
499     criminal conviction of a tobacco retailer or employee for violation of Section 76-10-104 at the
500     same location and within the same time period as the location and time period alleged in the
501     civil hearing for violation of this chapter for sale of [tobacco products] a tobacco product, an
502     electronic cigarette product, an alternative nicotine product, or a nontherapeutic nicotine
503     product to a person under the age of 19 is prima facie evidence of a violation of this chapter.
504          (2) If the tobacco retailer is convicted of violating Section 76-10-104, the enforcing
505     agency:
506          (a) may not assess an additional monetary penalty under this chapter for the same
507     offense for which the conviction was obtained; and
508          (b) may revoke or suspend a permit in accordance with Section 26-62-305.
509          Section 12. Section 26-62-305 is amended to read:
510          26-62-305. Penalties.
511          (1) (a) If, following an inspection by an enforcing agency, or an investigation or
512     issuance of a citation or information under Section 77-39-101, an enforcing agency determines
513     that a person has violated the terms of a permit issued under this chapter, the enforcing agency
514     may impose the penalties described in this section.
515          (b) If multiple violations are found in a single inspection or investigation, only one
516     violation shall count toward the penalties described in this section.
517          (2) (a) The administrative penalty for a first violation at a retail location is a penalty of
518     not more than $500.
519          (b) The administrative penalty for a second violation at the same retail location that
520     occurs within one year of a previous violation is a penalty of not more than $750.
521          (c) The administrative penalty for a third or subsequent violation at the same retail
522     location that occurs within two years after two or more previous violations is:
523          (i) a suspension of the retail tobacco business permit for 30 consecutive business days

524     within 60 days after the day on which the third or subsequent violation occurs; or
525          (ii) a penalty of not more than $1,000.
526          (3) The department or a local health department may:
527          (a) revoke a permit if a fourth violation occurs within two years of three previous
528     violations;
529          (b) in addition to a monetary penalty imposed under Subsection (2), suspend the permit
530     if the violation is due to a sale of [tobacco products] a tobacco product, an electronic cigarette
531     product, an alternative nicotine product, or a nontherapeutic nicotine product to a person under
532     19 years of age; and
533          (c) if applicable, recommend to a municipality or county that a retail tobacco specialty
534     business license issued under Section 10-8-41.6 or 17-50-333 be suspended or revoked.
535          (4) (a) Except when a transfer described in Subsection (5) occurs, a local health
536     department may not issue a permit to:
537          (i) a tobacco retailer for whom a permit is suspended or revoked under Subsection (3);
538     or
539          (ii) a tobacco retailer that has the same proprietor, director, corporate officer, partner,
540     or other holder of significant interest as another tobacco retailer for whom a permit is
541     suspended or revoked under Subsection (3).
542          (b) A person whose permit:
543          (i) is suspended under this section may not apply for a new permit for any other
544     tobacco retailer for a period of 12 months after the day on which an enforcing agency suspends
545     the permit; and
546          (ii) is revoked may not apply for a new permit for any tobacco retailer for a period of
547     24 months after the day on which an enforcing agency revokes the permit.
548          (5) Violations of this chapter, Section 10-8-41.6, or Section 17-50-333 that occur at a
549     tobacco retailer location shall stay on the record for that tobacco retailer location unless:
550          (a) the tobacco retailer is transferred to a new proprietor; and
551          (b) the new proprietor provides documentation to the local health department that the
552     new proprietor is acquiring the tobacco retailer in an arm's length transaction from the previous
553     proprietor.
554          Section 13. Section 26-62-306 is amended to read:

555          26-62-306. Recognition of tobacco retailer training program.
556          (1) In determining the amount of the monetary penalty to be imposed for an employee's
557     violation of this chapter, a hearing officer shall reduce the civil penalty by at least 50% if the
558     hearing officer determines that:
559          (a) the tobacco retailer has implemented a documented employee training program; and
560          (b) the employees have completed that training program within 30 days after the day on
561     which each employee commences the duties of selling [tobacco products] a tobacco product, an
562     electronic cigarette product, an alternative nicotine product, or a nontherapeutic nicotine
563     product.
564          (2) (a) For the first offense at a location, if the hearing officer determines under
565     Subsection (1) that the tobacco retailer licensee has not implemented a documented training
566     program with a written curriculum for employees at that location regarding compliance with
567     this chapter, the hearing officer may suspend all or a portion of the penalty if:
568          (i) the tobacco retailer agrees to initiate a training program for employees at that
569     location; and
570          (ii) the training program begins within 30 days after the hearing officer makes a
571     determination under this Subsection (2)(a).
572          (b) If the hearing officer determines at a subsequent hearing that the tobacco retailer
573     has not implemented the training program within the time period required under Subsection
574     (2)(a)(ii), the hearing officer shall promptly impose the suspended monetary penalty, unless the
575     tobacco retailer demonstrates good cause for an extension of time for implementation of the
576     training program.
577          Section 14. Section 26A-1-128 is amended to read:
578          26A-1-128. Tobacco, electronic cigarette, and other nicotine product permits --
579     Enforcement.
580          A local health department:
581          (1) shall enforce the requirements of Title 26, Chapter 62, Tobacco, Electronic
582     Cigarette, and Other Nicotine Product Retail Permit;
583          (2) may enforce licensing requirements for entities that hold a business license to sell a
584     tobacco [products] product, an electronic cigarette product, an alternative nicotine product, or a
585     nontherapeutic nicotine product under Section 10-8-41.6 or [Section] 17-50-333; and

586          (3) may recommend to a municipality or county that the business license of a retail
587     tobacco specialty business be suspended or revoked for a violation of Section 10-8-41.6,
588     Section 17-50-333, or Title 26, Chapter 62, Tobacco, Electronic Cigarette, and Other Nicotine
589     Product Retail Permit.
590          Section 15. Section 59-14-102 is amended to read:
591          59-14-102. Definitions.
592          As used in this chapter:
593          (1) (a) Except as provided in Subsection (1)(c), "alternative nicotine product" means a
594     product, other than a cigarette, a counterfeit cigarette, an electronic cigarette product, a
595     nontherapeutic nicotine product, or a tobacco product, that:
596          (i) contains nicotine;
597          (ii) is intended for human consumption;
598          (iii) is not purchased with a prescription from a licensed physician; and
599          (iv) is not approved by the United States Food and Drug Administration as nicotine
600     replacement therapy.
601          (b) "Alternative nicotine product" includes:
602          (i) pure nicotine;
603          (ii) snortable nicotine;
604          (iii) dissolvable orbs, pellets, sticks, or strips; and
605          (iv) nicotine-laced food and beverage.
606          (c) "Alternative nicotine product" does not include a fruit, a vegetable, or a tea that
607     contains naturally occurring nicotine.
608          [(1)] (2) "Cigarette" means a roll for smoking made wholly or in part of tobacco:
609          (a) regardless of:
610          (i) the size of the roll;
611          (ii) the shape of the roll; or
612          (iii) whether the tobacco is[: (A)] flavored[; (B)], adulterated[;], or [(C)] mixed with
613     any other ingredient; and
614          (b) if the wrapper or cover of the roll is made of paper or any other substance or
615     material except tobacco.
616          [(2)] (3) "Cigarette rolling machine" means a device or machine that has the capability

617     to produce at least 150 cigarettes in less than 30 minutes.
618          [(3)] (4) "Cigarette rolling machine operator" means a person [who] that:
619          (a) (i) controls, leases, owns, possesses, or otherwise has available for use a cigarette
620     rolling machine; and
621          (ii) makes the cigarette rolling machine available for use by another person to produce
622     a cigarette; or
623          (b) offers for sale, at retail, a cigarette produced from the cigarette rolling machine.
624          [(4)] (5) "Consumer" means a person that is not required:
625          (a) under Section 59-14-201 to obtain a license under Section 59-14-202; [or]
626          (b) under Section 59-14-301 to obtain a license under Section 59-14-202[.]; or
627          (c) under Section 59-14-803 to obtain a license.
628          [(5)] (6) "Counterfeit cigarette" means:
629          (a) a cigarette that has a false manufacturing label; or
630          (b) a package of cigarettes bearing a counterfeit tax stamp.
631          (7) (a) "Electronic cigarette" means:
632          (i) an electronic device used to deliver or capable of delivering vapor containing
633     nicotine or another substance to an individual's respiratory system;
634          (ii) a component of the device described in Subsection (7)(a)(i); or
635          (iii) an accessory sold in the same package as the device described in Subsection
636     (7)(a)(i).
637          (b) "Electronic cigarette" includes an e-cigarette as that term is defined in Section
638     26-38-2.
639          (8) "Electronic cigarette product" means an electronic cigarette, an electronic cigarette
640     substance, or a prefilled electronic cigarette.
641          (9) "Electronic cigarette substance" means any substance, including liquid containing
642     nicotine, used or intended for use in an electronic cigarette.
643          [(6)] (10) "Importer" means a person [who] that imports into the United States, either
644     directly or indirectly, a finished cigarette for sale or distribution.
645          [(7)] (11) "Indian tribal entity" means a federally recognized Indian tribe, tribal entity,
646     or any other person doing business as a distributor or retailer of cigarettes on tribal lands
647     located in the state.

648          [(8)] (12) "Little cigar" means a roll for smoking that:
649          (a) is made wholly or in part of tobacco;
650          (b) [that] uses an integrated cellulose acetate filter or other similar filter; and
651          (c) [that] is wrapped in a substance:
652          (i) containing tobacco; and
653          (ii) that is not exclusively natural leaf tobacco.
654          [(9)] (13) (a) Except as provided in Subsection [(9)] (13)(b), "manufacturer" means a
655     person [who] that:
656          (i) manufactures, fabricates, assembles, processes, or labels a finished cigarette; or
657          (ii) makes, modifies, mixes, manufactures, fabricates, assembles, processes, labels,
658     repackages, relabels, or imports an electronic cigarette product, an alternative nicotine product,
659     or a nontherapeutic nicotine product.
660          (b) "Manufacturer" does not include a cigarette rolling machine operator.
661          [(10)] (14) "Moist snuff" means tobacco that:
662          (a) is finely[: (i)] cut[; (ii)], ground[;], or [(iii)] powdered;
663          (b) has at least 45% moisture content, as determined by the commission by rule made
664     in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
665          (c) is not intended to be:
666          (i) smoked; or
667          (ii) placed in the nasal cavity; and
668          (d) except for single-use pouches of loose tobacco, is not packaged, produced, sold, or
669     distributed in single-use units, including:
670          (i) tablets;
671          (ii) lozenges;
672          (iii) strips;
673          (iv) sticks; or
674          (v) packages containing multiple single-use units.
675          (15) "Nicotine" means a poisonous, nitrogen containing chemical that is made
676     synthetically or derived from tobacco or other plants.
677          (16) (a) "Nontherapeutic nicotine device" means a device that:
678          (i) has a pressurized canister that is used to administer nicotine to the user through

679     inhalation or intranasally;
680          (ii) is not purchased with a prescription from a licensed physician; and
681          (iii) is not approved by the United States Food and Drug Administration as nicotine
682     replacement therapy.
683          (b) "Nontherapeutic nicotine device" includes a nontherapeutic nicotine inhaler or
684     nontherapeutic nicotine nasal spray.
685          (17) "Nontherapeutic nicotine device substance" means a cartridge that:
686          (a) contains nicotine;
687          (b) is used or intended to be used in a nontherapeutic nicotine device;
688          (c) is not purchased with a prescription from a licensed physician; and
689          (d) is not approved by the United States Food and Drug Administration as nicotine
690     replacement therapy.
691          (18) "Nontherapeutic nicotine product" means a nontherapeutic nicotine device, a
692     nontherapeutic nicotine device substance, or a prefilled nontherapeutic nicotine device.
693          (19) "Prefilled electronic cigarette" means an electronic cigarette that is sold prefilled
694     with an electronic cigarette substance.
695          (20) "Prefilled nontherapeutic nicotine device" means a nontherapeutic nicotine device
696     that is sold prefilled with a nontherapeutic nicotine device substance.
697          [(11)] (21) "Retailer" means a person that:
698          (a) sells or distributes a cigarette, an electronic cigarette product, an alternative nicotine
699     product, or a nontherapeutic nicotine product to a consumer in the state; or
700          (b) intends to sell or distribute a cigarette, an electronic cigarette product, an alternative
701     nicotine product, or a nontherapeutic nicotine product to a consumer in the state.
702          [(12)] (22) "Stamp" means the indicia required to be placed on a cigarette package that
703     evidences payment of the tax on cigarettes required by Section 59-14-205.
704          [(13)] (23) (a) "Tobacco product" means a product made of, or containing, tobacco.
705          (b) "Tobacco product" includes:
706          (i) a cigarette produced from a cigarette rolling machine;
707          (ii) a little cigar; or
708          (iii) moist snuff.
709          (c) "Tobacco product" does not include a cigarette.

710          [(14)] (24) "Tribal lands" means land held by the United States in trust for a federally
711     recognized Indian tribe.
712          Section 16. Section 59-14-201 is amended to read:
713          59-14-201. License -- Application of part -- Fee -- Bond -- Exceptions.
714          (1) It is unlawful for any person in this state to manufacture, import, distribute, barter,
715     sell, exchange, or offer cigarettes for sale without first having obtained a license issued by the
716     commission under Section 59-14-202.
717          (2) Except for the tax rates described in Subsection 59-14-204(2), this part does not
718     apply to a cigarette produced from a cigarette rolling machine.
719          (3) (a) A license may not be issued for the sale of cigarettes until the applicant has paid
720     a license fee of $30 or a license renewal fee of $20, as appropriate.
721          (b) The fee for reinstatement of a license that has been revoked, suspended, or allowed
722     to expire is $30.
723          (c) Notwithstanding Subsections (3)(a) and (b), the commission may not charge a fee
724     for a license under this section for a retailer, as defined in Section 59-14-102.
725          (4) (a) (i) [A license may not be issued] The commission may not issue a license until
726     the applicant files a bond with the commission.
727          (ii) The commission shall determine the form and the amount of the bond, the
728     minimum amount of which shall be $500.
729          (iii) The [bond shall be executed by the applicant] applicant shall execute the bond as
730     principal, with a corporate surety, payable to the state and conditioned upon the faithful
731     performance of all the requirements of this chapter, including the payment of all taxes,
732     penalties, and other obligations.
733          (b) An applicant is not required to post a bond if the applicant:
734          (i) purchases during the license year only products that have the proper state stamp
735     affixed as required by this chapter; and
736          (ii) files an affidavit with the applicant's application attesting to this fact.
737          Section 17. Section 59-14-801 is amended to read:
738     
Part 8. Electronic Cigarette and Other Nicotine Product Licensing and Taxation Act

739          59-14-801. Title.
740          This part is known as the "Electronic Cigarette and Other Nicotine Product Licensing

741     and Taxation Act."
742          Section 18. Section 59-14-802 is amended to read:
743          59-14-802. Definitions.
744          As used in this part:
745          [(1) "Cigarette" means the same as that term is defined in Section 59-14-102.]
746          [(2) (a) "Electronic cigarette" means:]
747          [(i) an electronic device used to deliver or capable of delivering vapor containing
748     nicotine to an individual's respiratory system;]
749          [(ii) a component of the device described in Subsection (2)(a)(i); or]
750          [(iii) an accessory sold in the same package as the device described in Subsection
751     (2)(a)(i).]
752          [(b) "Electronic cigarette" includes an e-cigarette as defined in Section 26-38-2.]
753          [(3) "Electronic cigarette product" means an electronic cigarette or an electronic
754     cigarette substance.]
755          [(4) "Electronic cigarette substance" means any substance, including liquid containing
756     nicotine, used or intended for use in an electronic cigarette.]
757          [(5)] (1) "Enforcing agency" means the Department of Health, a county health
758     department, or a local health department, when enforcing:
759          [(a) Title 26, Chapter 42, Civil Penalties for Tobacco Sales to Underage Persons; or]
760          [(b)] (a) Title 26, Chapter 57, Electronic Cigarette and Other Nicotine Product
761     Regulation Act[.]; or
762          (b) Title 26, Chapter 62, Tobacco, Electronic Cigarette, and Other Nicotine Product
763     Retail Permit.
764          [(6)] (2) "Licensee" means a person that holds a valid license to sell an electronic
765     cigarette [products] product, an alternative nicotine product, or a nontherapeutic nicotine
766     product.
767          [(7) "License to sell an electronic cigarette product" means a license issued by the
768     commission under Subsection 59-14-803(3).]
769          (3) (a) "Manufacturer's sales price" means the amount the manufacturer of an electronic
770     cigarette substance, prefilled electronic cigarette, alternative nicotine product, nontherapeutic
771     nicotine device substance, or prefilled nontherapeutic nicotine device charges after subtracting

772     a discount.
773          (b) "Manufacturer's sales price" includes an original Utah destination freight charge,
774     regardless of:
775          (i) whether the electronic cigarette substance, prefilled electronic cigarette, alternative
776     nicotine product, nontherapeutic nicotine device substance, or prefilled nontherapeutic nicotine
777     device is shipped f.o.b. origin or f.o.b. destination; or
778          (ii) who pays the original Utah destination charge.
779          Section 19. Section 59-14-803 is amended to read:
780          59-14-803. License to sell an electronic cigarette product or other nicotine
781     products.
782          (1) [Except as provided in Subsection (2), a] A person may not sell, offer to sell, or
783     distribute an electronic cigarette product [in Utah], an alternative nicotine product, or a
784     nontherapeutic nicotine product in this state without first:
785          (a) except as provided in Subsection (2), obtaining a license from the commission
786     under this section to sell an electronic cigarette product [from the commission under this
787     section.], an alternative nicotine product, or a nontherapeutic nicotine product; and
788          (b) complying with any bonding requirement described in Subsection (4).
789          (2) A person that holds a valid license to sell cigarettes under Section 59-14-201[,] or a
790     person that holds a valid license to sell tobacco products under Section 59-14-301[,] may,
791     without obtaining a separate license [to sell an electronic cigarette product under this part] in
792     accordance with this section, sell, offer to sell, or distribute in the state the following:
793          (a) an electronic cigarette product [in Utah in accordance with this part.];
794          (b) an alternative nicotine product; or
795          (c) a nontherapeutic nicotine product.
796          (3) The commission shall issue a license to sell an electronic cigarette product, an
797     alternative nicotine product, or a nontherapeutic nicotine product to a person that submits an
798     application, on a form created by the commission, that includes:
799          (a) the person's name;
800          (b) the address of the facility where the person will sell an electronic cigarette product,
801     an alternative nicotine product, or a nontherapeutic nicotine product; and
802          (c) any other information the commission requires to implement this chapter.

803          (4) A license described in Subsection (3) is:
804          (a) valid only at one fixed business address;
805          (b) valid for three years;
806          (c) valid only for a physical location; and
807          (d) renewable if a licensee meets the criteria for licensing described in Subsection (3).
808          (5) (a) The commission shall require a manufacturer, jobber, distributor, wholesaler, or
809     retailer that is responsible under this part for the collection of tax on an electronic cigarette
810     substance, a prefilled electronic cigarette, an alternative nicotine product, a nontherapeutic
811     nicotine device substance, or a prefilled nontherapeutic nicotine device to post a bond.
812          (b) The manufacturer, jobber, distributor, wholesaler, or retailer may post the bond
813     required by Subsection (5)(a) in combination with the bond required by Section 59-14-201 or
814     59-14-301.
815          (c) Subject to Subsection (5)(d), the commission shall determine the form and amount
816     of the bond.
817          (d) The minimum amount of the bond shall be:
818          (i) except as provided in Subsection (5)(d)(ii) or (iii), $500;
819          (ii) if the manufacturer, jobber, distributor, wholesaler, or retailer posts the bond
820     required by Subsection (5)(a) in combination with a bond required by either Section 59-14-201
821     or 59-14-301, $1,000; or
822          (iii) if the manufacturer, jobber, distributor, wholesaler, or retailer posts the bond
823     required by Subsection (5)(a) in combination with the bonds required by both Sections
824     59-14-201 and 59-14-301, $1,500.
825          [(5)] (6) The commission may make rules in accordance with Title 63G, Chapter 3,
826     Utah Administrative Rulemaking Act, to establish the additional information described in
827     Subsection (3)(c) that a person must provide in the application described in Subsection (3).
828          [(6)] (7) It is a class B misdemeanor for a person to violate Subsection (1).
829          [(7)] (8) The commission may not charge a fee for a license under this section.
830          Section 20. Section 59-14-804 is enacted to read:
831          59-14-804. Taxation of an electronic cigarette substance, prefilled electronic
832     cigarette, an alternative nicotine product, a nontherapeutic nicotine product, a
833     nontherapeutic device substance, and a prefilled nontherapeutic nicotine device.

834          (1) (a) There is levied a tax upon the following:
835          (i) an electronic cigarette substance; and
836          (ii) a prefilled electronic cigarette.
837          (b) Beginning on July 1, 2020, there is levied a tax upon the following:
838          (i) an alternative nicotine product;
839          (ii) a nontherapeutic nicotine device substance; or
840          (iii) a prefilled nontherapeutic nicotine device.
841          (2) The rate of tax levied under Subsection (1) is .86 multiplied by the manufacturer's
842     sales price.
843          (3) (a) A manufacturer, jobber, distributor, wholesaler, retailer, consumer, or user shall
844     pay the tax levied under Subsection (1) at the time that an electronic cigarette substance, a
845     prefilled electronic cigarette, an alternative nicotine product, a nontherapeutic nicotine device
846     substance, or a prefilled nontherapeutic nicotine device is first received in the state.
847          (b) A manufacturer, jobber, distributor, wholesaler, retailer, consumer, or user may not
848     resell an electronic cigarette substance, a prefilled electronic cigarette, an alternative nicotine
849     product, a nontherapeutic nicotine device substance, or a prefilled nontherapeutic nicotine
850     device to another distributor, another retailer, or a consumer before paying the tax levied under
851     Subsection (1).
852          (4) (a) The manufacturer, jobber, distributor, wholesaler, retailer, consumer, or user
853     shall remit the taxes collected in accordance with this section to the commission.
854          (b) The commission shall deposit, for each fiscal year:
855          (i) the first $2,000,000 remitted in accordance with this section into the Electronic
856     Cigarette Substance and Other Nicotine Product Tax Restricted Account, created in Section
857     59-14-807; and
858          (ii) the balance of remittances received in accordance with this section into the General
859     Fund.
860          Section 21. Section 59-14-805 is enacted to read:
861          59-14-805. Remittance of tax -- Returns -- Invoice required -- Filing requirement--
862     Exception -- Penalty -- Overpayment.
863          (1) (a) The manufacturer, jobber, distributor, wholesaler, retailer, consumer, or user
864     that collects the tax imposed on an electronic cigarette substance, a prefilled electronic

865     cigarette, an alternative nicotine product, a nontherapeutic nicotine device substance, or a
866     prefilled nontherapeutic nicotine device shall remit to the commission, in an electronic format
867     approved by the commission:
868          (i) the tax collected in the previous calendar quarter; and
869          (ii) the quarterly tax return.
870          (b) The tax collected and the return are due on or before the last day of April, July,
871     October, and January.
872          (2) (a) A manufacturer, jobber, distributor, wholesaler, retailer, or any other person
873     selling an electronic cigarette substance, a prefilled electronic cigarette, an alternative nicotine
874     product, a nontherapeutic nicotine device substance, or a prefilled nontherapeutic nicotine
875     device to a person other than the ultimate consumer shall furnish the purchaser with an
876     itemized invoice showing:
877          (i) the seller's name and address;
878          (ii) the name and address of the purchaser;
879          (iii) the date of sale;
880          (iv) the name and price of the product; and
881          (v) the discount, if any.
882          (b) The invoice shall show whether the price includes the tax.
883          (c) The seller and the purchaser shall retain copies of the invoice and make the invoice
884     available for inspection at the request of the commission or the commission's agent for a period
885     of three years following the sale.
886          (3) (a) A consumer that purchases an untaxed electronic cigarette substance, prefilled
887     electronic cigarette, alternative nicotine product, nontherapeutic nicotine device substance, or
888     prefilled nontherapeutic nicotine device for use or other consumption shall:
889          (i) file with the commission, on forms prescribed by the commission, a statement
890     showing the quantity and description of the item subject to tax under this part; and
891          (ii) pay the tax imposed by this part on that item.
892          (b) The consumer shall file the statement described in Subsection (3)(a) and pay the tax
893     due on or before the last day of the month immediately following the month during which the
894     consumer purchased an untaxed electronic cigarette substance, prefilled electronic cigarette,
895     alternative nicotine device substance, nontherapeutic nicotine product, or prefilled

896     nontherapeutic nicotine device.
897          (c) A consumer shall maintain records necessary to determine the amount of tax the
898     consumer is liable to pay under this part for a period of three years following the date the
899     statement required by this section was filed.
900          (4) A tourist who imports an electronic cigarette substance, a prefilled electronic
901     cigarette, an alternative nicotine product, a nontherapeutic nicotine device substance, or a
902     prefilled nontherapeutic nicotine device into the state does not need to file the statement
903     described in Subsection (3) or pay the tax if the item is for the tourist's own use or consumption
904     while in this state.
905          (5) In addition to the tax required by this part, a person shall pay a penalty as provided
906     in Section 59-1-401, plus interest at the rate and in the manner prescribed in Section 59-1-402,
907     if a person subject to this section fails to:
908          (a) pay the tax prescribed by this part;
909          (b) pay the tax on time; or
910          (c) file a return required by this part.
911          (6) An overpayment of a tax imposed by this part shall accrue interest at the rate and in
912     the manner prescribed in Section 59-1-402.
913          Section 22. Section 59-14-806 is enacted to read:
914          59-14-806. Refund of taxes paid -- Exemption for exported electronic cigarettes
915     and other nicotine products.
916          (1) When an electronic cigarette substance, a prefilled electronic cigarette, an
917     alternative nicotine product, a nontherapeutic nicotine device substance, or a prefilled
918     nontherapeutic nicotine device taxed under this chapter is sold and shipped to a regular dealer
919     in those articles in another state, the seller in this state shall be entitled to a refund of the actual
920     amount of the taxes paid, upon condition that the seller in this state:
921          (a) is a licensed dealer;
922          (b) signs an affidavit that the electronic cigarette substance, the prefilled electronic
923     cigarette, the alternative nicotine product, the nontherapeutic nicotine device substance, or the
924     prefilled nontherapeutic nicotine device was sold and shipped to a regular dealer in those
925     articles in another state;
926          (c) furnishes from the purchaser a written acknowledgment that the purchaser has

927     received the electronic cigarette substance, the prefilled electronic cigarette, the alternative
928     nicotine product, the nontherapeutic nicotine device substance, or the prefilled nontherapeutic
929     nicotine device; and
930          (d) reports the name and address of the purchaser.
931          (2) A wholesaler or distributor in this state that exports an electronic cigarette
932     substance, a prefilled electronic cigarette, an alternative nicotine product, a nontherapeutic
933     nicotine device substance, or a prefilled nontherapeutic nicotine device to a regular dealer in
934     those articles in another state shall be exempt from the payment of any tax under this chapter
935     upon furnishing proof of the sale and exportation as the commission may require.
936          Section 23. Section 59-14-807 is enacted to read:
937          59-14-807. Electronic Cigarette Substance and Other Nicotine Product Tax
938     Restricted Account.
939          (1) There is created within the General Fund a restricted account known as the
940     "Electronic Cigarette Substance and Other Nicotine Product Tax Restricted Account."
941          (2) The Electronic Cigarette Substance and Other Nicotine Product Tax Restricted
942     Account consists of:
943          (a) for each fiscal year, the first $2,000,000 collected from the tax imposed by Section
944     59-14-804; and
945          (b) amounts appropriated by the Legislature.
946          (3) (a) For each fiscal year, beginning with fiscal year 2020, and subject to
947     appropriation by the Legislature, the Division of Finance shall distribute money from the
948     Electronic Cigarette Substance and Other Nicotine Product Tax Restricted Account to the local
949     health departments as directed by the Department of Health, which shall determine the
950     allocation for each local health department using the formula created in accordance with
951     Section 26A-1-116.
952          (b) The local health departments shall use the money received in accordance with
953     Subsection (3)(a) for:
954          (i) the development and implementation of evidence-based tobacco, electronic
955     cigarette, and other nicotine product cessation programs for individuals under the age of 19;
956          (ii) enforcing:
957          (A) the regulation provisions described in Section 26-57-103;

958          (B) the labeling requirement described in Section 26-57-104; and
959          (C) the penalty provisions described in Section 26-62-305; and
960          (iii) developing and providing tobacco, electronic cigarette, and other nicotine product
961     use prevention education to individuals under the age of 19.
962          Section 24. Section 76-10-101 is amended to read:
963     
Part 1. Cigarettes, Tobacco, Other Nicotine Substances, and Psychotoxic Chemical

964     
Substances

965          76-10-101. Definitions.
966          As used in this part:
967          (1) "Alternative nicotine product" means the same as that term is defined in Section
968     59-14-102.
969          (2) "Cigar" means a product that contains nicotine, is intended to be burned under
970     ordinary conditions of use, and consists of any roll of tobacco wrapped in leaf tobacco, or in
971     any substance containing tobacco, other than any roll of tobacco that is a cigarette as described
972     in Subsection [(2)] (3).
973          [(2)] (3) "Cigarette" means a product that contains nicotine, is intended to be burned
974     under ordinary conditions of use, and consists of:
975          (a) any roll of tobacco wrapped in paper or in any substance not containing tobacco; or
976          (b) any roll of tobacco wrapped in any substance containing tobacco which, because of
977     its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to
978     be offered to, or purchased by, consumers as a cigarette described in Subsection [(2)] (3)(a).
979          [(3) "Electronic cigarette" means an electronic cigarette product, as defined in Section
980     59-14-802.]
981          (4) (a) "Electronic cigarette" means:
982          (i) an electronic device used to deliver or capable of delivering vapor containing
983     nicotine to an individual's respiratory system;
984          (ii) a component of the device described in Subsection (4)(a)(i); or
985          (iii) an accessory sold in the same package as the device described in Subsection
986     (4)(a)(i).
987          (b) "Electronic cigarette" includes an e-cigarette as that term is defined in Section
988     26-38-2.

989          (5) "Electronic cigarette product" means an electronic cigarette, an electronic cigarette
990     substance, or a prefilled electronic cigarette.
991          (6) "Electronic cigarette substance" means any substance, including liquid containing
992     nicotine, used or intended for use in an electronic cigarette.
993          (7) (a) "Nontherapeutic nicotine device" means a device that:
994          (i) has a pressurized canister that is used to administer nicotine to the user through
995     inhalation or intranasally;
996          (ii) is not purchased with a prescription from a licensed physician; and
997          (iii) is not approved by the United States Food and Drug Administration as nicotine
998     replacement therapy.
999          (b) "Nontherapeutic nicotine device" includes a nontherapeutic nicotine inhaler or
1000     nontherapeutic nicotine nasal spray.
1001          (8) "Nontherapeutic nicotine device substance" means a cartridge that:
1002          (a) contains nicotine;
1003          (b) is used or intended to be used in a nontherapeutic nicotine device;
1004          (c) is not purchased with a prescription from a licensed physician; and
1005          (d) is not approved by the United States Food and Drug Administration as nicotine
1006     replacement therapy.
1007          (9) "Nontherapeutic nicotine product" means a nontherapeutic nicotine device, a
1008     nontherapeutic nicotine device substance, or a prefilled nontherapeutic nicotine device.
1009          [(4)] (10) "Place of business" includes:
1010          (a) a shop;
1011          (b) a store;
1012          (c) a factory;
1013          (d) a public garage;
1014          (e) an office;
1015          (f) a theater;
1016          (g) a recreation hall;
1017          (h) a dance hall;
1018          (i) a poolroom;
1019          (j) a café;

1020          (k) a cafeteria;
1021          (l) a cabaret;
1022          (m) a restaurant;
1023          (n) a hotel;
1024          (o) a lodging house;
1025          (p) a streetcar;
1026          (q) a bus;
1027          (r) an interurban or railway passenger coach;
1028          (s) a waiting room; and
1029          (t) any other place of business.
1030          (11) "Prefilled electronic cigarette" means an electronic cigarette that is sold prefilled
1031     with an electronic cigarette substance.
1032          (12) "Prefilled nontherapeutic nicotine device" means a nontherapeutic nicotine device
1033     that is sold prefilled with a nontherapeutic nicotine device substance.
1034          [(5)] (13) "Smoking" means the possession of any lighted cigar, cigarette, pipe, or other
1035     lighted smoking equipment.
1036          Section 25. Section 76-10-104 is amended to read:
1037          76-10-104. Providing any cigar, cigarette, electronic cigarette, alternative nicotine
1038     product, nontherapeutic nicotine product, or tobacco to a minor -- Penalties.
1039          (1) Any person who knowingly, intentionally, recklessly, or with criminal negligence
1040     provides any cigar, cigarette, electronic cigarette product, alternative nicotine product,
1041     nontherapeutic nicotine product, or tobacco in any form[,] to any person under 19 years of
1042     age[,] is guilty of a class C misdemeanor on the first offense, a class B misdemeanor on the
1043     second offense, and a class A misdemeanor on subsequent offenses.
1044          (2) For purposes of this section "provides":
1045          (a) includes selling, giving, furnishing, sending, or causing to be sent; and
1046          (b) does not include the acts of the United States Postal Service or other common
1047     carrier when engaged in the business of transporting and delivering packages for others or the
1048     acts of a person, whether compensated or not, who transports or delivers a package for another
1049     person without any reason to know of the package's content.
1050          Section 26. Section 76-10-104.1 is amended to read:

1051          76-10-104.1. Providing tobacco paraphernalia to minors -- Penalties.
1052          (1) For purposes of this section:
1053          (a) "Provides":
1054          (i) includes selling, giving, furnishing, sending, or causing to be sent; and
1055          (ii) does not include the acts of the United States Postal Service or other common
1056     carrier when engaged in the business of transporting and delivering packages for others or the
1057     acts of a person, whether compensated or not, who transports or delivers a package for another
1058     person without any reason to know of the package's content.
1059          (b) (i) "Tobacco paraphernalia"[:(i)] means any equipment, product, or material of any
1060     kind which is used, intended for use, or designed for use to package, repackage, store, contain,
1061     conceal, ingest, inhale, or otherwise introduce a cigar, electronic cigarette substance,
1062     nontherapeutic nicotine device substance, cigarette, or tobacco in any form into the human
1063     body[, including:].
1064          (ii) "Tobacco paraphernalia" includes:
1065          (A) metal, wooden, acrylic, glass, stone, plastic, or ceramic pipes with or without
1066     screens, permanent screens, hashish heads, or punctured metal bowls;
1067          (B) water pipes;
1068          (C) carburetion tubes and devices;
1069          (D) smoking and carburetion masks;
1070          (E) roach clips: meaning objects used to hold burning material, such as a cigarette, that
1071     has become too small or too short to be held in the hand;
1072          (F) chamber pipes;
1073          (G) carburetor pipes;
1074          (H) electric pipes;
1075          (I) air-driven pipes;
1076          (J) chillums;
1077          (K) bongs; and
1078          (L) ice pipes or chillers[; and].
1079          [(ii)] (iii) "Tobacco paraphernalia" does not include matches or lighters.
1080          (2) (a) It is unlawful for a person to knowingly, intentionally, recklessly, or with
1081     criminal negligence provide any tobacco paraphernalia to any person under 19 years of age.

1082          (b) A person who violates this section is guilty of a class C misdemeanor on the first
1083     offense and a class B misdemeanor on subsequent offenses.
1084          Section 27. Section 76-10-105 is amended to read:
1085          76-10-105. Buying or possessing a cigar, a cigarette, an electronic cigarette
1086     product, an alternative nicotine product, a nontherapeutic nicotine product, or tobacco
1087     by a minor -- Penalty -- Compliance officer authority -- Juvenile court jurisdiction.
1088          (1) Any [18 year old person] 18-year-old individual who buys or attempts to buy,
1089     accepts, or has in the [person's] individual's possession any cigar, cigarette, electronic cigarette
1090     product, alternative nicotine product, nontherapeutic nicotine product, or tobacco in any form is
1091     guilty of a class C misdemeanor and subject to:
1092          (a) a minimum fine or penalty of $60; and
1093          (b) participation in a court-approved tobacco education program, which may include a
1094     participation fee.
1095          (2) Any [person] individual under the age of 18 who buys or attempts to buy, accepts,
1096     or has in the [person's] individual's possession any cigar, cigarette, electronic cigarette product,
1097     alternative nicotine product, nontherapeutic nicotine product, or tobacco in any form is subject
1098     to the jurisdiction of the juvenile court and subject to Section 78A-6-602, unless the violation
1099     is committed on school property. If a violation under this section is adjudicated under Section
1100     78A-6-117, the minor may be subject to the following:
1101          (a) a fine or penalty, in accordance with Section 78A-6-117; and
1102          (b) participation in a court-approved tobacco education program, which may include a
1103     participation fee.
1104          (3) A compliance officer appointed by a board of education under Section 53G-4-402
1105     may not issue a citation for a violation of this section committed on school property. A cited
1106     violation committed on school property shall be addressed in accordance with Section
1107     53G-8-211.
1108          Section 28. Section 76-10-105.1 is amended to read:
1109          76-10-105.1. Requirement of direct, face-to-face sale of a cigarette, tobacco, an
1110     electronic product, an alternative nicotine product, or a nontherapeutic nicotine product
1111     -- Minors not allowed in tobacco specialty shop -- Penalties.
1112          (1) As used in this section:

1113          (a) "Cigarette" means the same as that term is defined in Section 59-14-102.
1114          (b) (i) "Face-to-face exchange" means a transaction made in person between an
1115     individual and a retailer or retailer's employee.
1116          (ii) "Face-to-face exchange" does not include a sale through a:
1117          (A) vending machine; or
1118          (B) self-service display.
1119          (c) "Retailer" means a person who:
1120          (i) sells a cigarette, tobacco, [or] an electronic cigarette product, an alternative nicotine
1121     product, or a nontherapeutic nicotine product to an individual for personal consumption; or
1122          (ii) operates a facility with a vending machine that sells a cigarette, tobacco, or an
1123     electronic cigarette.
1124          (d) "Self-service display" means a display of a cigarette, tobacco, [or] an electronic
1125     cigarette product, an alternative nicotine product, or a nontherapeutic nicotine product to which
1126     the public has access without the intervention of a retailer or retailer's employee.
1127          (e) "Tobacco" means any product, except a cigarette, made of or containing tobacco.
1128          (f) "Tobacco specialty shop" means a "retail tobacco specialty business" as that term is
1129     defined:
1130          (i) as it relates to a municipality, in Section 10-8-41.6; and
1131          (ii) as it relates to a county, in Section 17-50-333.
1132          (2) Except as provided in Subsection (3), a retailer may sell a cigarette, tobacco, [or] an
1133     electronic cigarette product, an alternative nicotine product, or a nontherapeutic nicotine
1134     product only in a face-to-face exchange.
1135          (3) The face-to-face sale requirement in Subsection (2) does not apply to:
1136          (a) a mail-order, telephone, or Internet sale made in compliance with Section
1137     59-14-509;
1138          (b) a sale from a vending machine or self-service display that is located in an area of a
1139     retailer's facility:
1140          (i) that is distinct and separate from the rest of the facility; and
1141          (ii) where the retailer only allows an individual who complies with Subsection (4) to be
1142     present; or
1143          (c) a sale at a tobacco specialty shop.

1144          (4) An individual who is less than 19 years old may not enter or be present at a tobacco
1145     specialty shop unless the individual is:
1146          (a) accompanied by a parent or legal guardian;
1147          (b) present at the tobacco shop for a bona fide commercial purpose other than to
1148     purchase a cigarette, tobacco, [or] an electronic cigarette product, an alternative nicotine
1149     product, or a nontherapeutic nicotine product; or
1150          (c) 18 years old or older and an active duty member of the United States Armed Forces,
1151     as demonstrated by a valid, government-issued military identification card.
1152          (5) A parent or legal guardian who accompanies, under Subsection (4)(a), an individual
1153     into an area described in Subsection (3)(b), or into a tobacco specialty shop, may not allow the
1154     individual to purchase a cigarette, tobacco, [or] an electronic cigarette product, an alternative
1155     nicotine product, or a nontherapeutic nicotine product.
1156          (6) A violation of Subsection (2) or (4) is a:
1157          (a) class C misdemeanor on the first offense;
1158          (b) class B misdemeanor on the second offense; and
1159          (c) class A misdemeanor on the third and all subsequent offenses.
1160          (7) An individual who violates Subsection (5) is guilty of providing tobacco to a minor
1161     under Section 76-10-104.
1162          (8) (a) Any ordinance, regulation, or rule adopted by the governing body of a political
1163     subdivision of the state or by a state agency that affects the sale, placement, or display of
1164     [cigarettes] a cigarette, tobacco, [or] an electronic [cigarettes] cigarette product, an alternative
1165     nicotine product, or a nontherapeutic nicotine product that is not essentially identical to the
1166     provisions of this section and Section 76-10-102 is superseded.
1167          (b) Subsection (8)(a) does not apply to the adoption or enforcement of a land use
1168     ordinance by a municipal or county government.
1169          Section 29. Effective date.
1170          This bill takes effect on July 1, 2019.