1     
ELECTRONIC CIGARETTE AND OTHER NICOTINE

2     
PRODUCT AMENDMENTS

3     
2017 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Paul Ray

6     
Senate Sponsor: ____________

7     

8     LONG TITLE
9     General Description:
10          This bill enacts and amends provisions relating to electronic cigarette products,
11     nontherapeutic nicotine products, and alternative nicotine products.
12     Highlighted Provisions:
13          This bill:
14          ▸     defines terms;
15          ▸     imposes civil penalties for the sale of a nontherapeutic nicotine product or an
16     alternative nicotine product;
17          ▸     requires the Department of Health to regulate a nontherapeutic nicotine product or
18     an alternative nicotine product;
19          ▸     imposes licensing requirements on a person that sells or distributes a nontherapeutic
20     nicotine product or an alternative nicotine product;
21          ▸     imposes an excise tax on the sale of an electronic cigarette substance, a
22     nontherapeutic nicotine device substance, an alternative nicotine product, and
23     certain prefilled devices;
24          ▸     creates the Electronic Cigarette Substance and Other Nicotine Product Tax
25     Restricted Account;
26          ▸     addresses use of revenue from the taxation of an electronic cigarette substance, a
27     nontherapeutic nicotine device substance, and an alternative nicotine product; and
28          ▸     provides criminal penalties for a sale or purchase of an electronic cigarette product,
29     a nontherapeutic nicotine product, or an alternative nicotine product in violation of
30     law.
31     Money Appropriated in this Bill:
32          None
33     Other Special Clauses:
34          This bill provides a special effective date.
35     Utah Code Sections Affected:
36     AMENDS:
37          26-42-102, as last amended by Laws of Utah 2015, Chapter 132
38          26-57-101, as enacted by Laws of Utah 2015, Chapter 132
39          26-57-102, as enacted by Laws of Utah 2015, Chapter 132
40          59-14-102, as last amended by Laws of Utah 2013, Chapter 148
41          59-14-201, as last amended by Laws of Utah 2013, Chapter 148
42          59-14-203.5, as last amended by Laws of Utah 2011, Chapter 96
43          59-14-801, as enacted by Laws of Utah 2015, Chapter 132
44          59-14-802, as enacted by Laws of Utah 2015, Chapter 132
45          59-14-803, as enacted by Laws of Utah 2015, Chapter 132
46          76-10-101, as last amended by Laws of Utah 2015, Chapters 66, 132 and last amended
47     by Coordination Clause, Laws of Utah 2015, Chapter 132
48          76-10-104, as last amended by Laws of Utah 2010, Chapter 114
49          76-10-104.1, as last amended by Laws of Utah 2013, Chapter 278
50          76-10-105, as last amended by Laws of Utah 2010, Chapter 114
51          76-10-105.1, as last amended by Laws of Utah 2015, Chapters 66 and 132
52     ENACTS:
53          26-57-104, Utah Code Annotated 1953
54          59-14-804, Utah Code Annotated 1953
55          59-14-805, Utah Code Annotated 1953
56     

57     Be it enacted by the Legislature of the state of Utah:
58          Section 1. Section 26-42-102 is amended to read:
59          26-42-102. Definitions.
60          As used in this chapter:
61          (1) "Commission" means the [Utah] State Tax Commission.
62          (2) "Employee" means an employee of a licensee.
63          (3) "Enforcing agency" means the state Department of Health, or any local health
64     department, enforcing the provisions of this chapter.
65          (4) "Licensee" means a person licensed:
66          (a) under Section 59-14-201 to sell cigarettes at retail;
67          (b) under Section 59-14-301 to sell tobacco products at retail; or
68          (c) under Section 59-14-803 to sell an electronic cigarette product, nontherapeutic
69     nicotine product, or alternative nicotine product.
70          (5) "License to sell tobacco" or "license" means a license issued:
71          (a) under Section 59-14-201 to sell cigarettes at retail;
72          (b) under Section 59-14-301 to sell tobacco products at retail; or
73          (c) under Section 59-14-803 to sell an electronic cigarette product, nontherapeutic
74     nicotine product, or alternative nicotine product.
75          (6) "Tobacco" means:
76          (a) a cigarette or a tobacco product, as defined in Section 59-14-102; or
77          (b) an electronic cigarette product, a nontherapeutic nicotine product, or an alternative
78     nicotine product, as defined in Section [59-14-802] 59-14-102.
79          Section 2. Section 26-57-101 is amended to read:
80     
CHAPTER 57. ELECTRONIC CIGARETTE AND OTHER NICOTINE PRODUCT

81     
REGULATION ACT

82          26-57-101. Title.
83          This chapter is known as the "Electronic Cigarette and Other Nicotine Product
84     Regulation Act."
85          Section 3. Section 26-57-102 is amended to read:
86          26-57-102. Definitions.
87          As used in this chapter:
88          (1) "Alternative nicotine product" means the same as that term is defined in Section
89     59-14-102.
90          [(1)] (2) "Cigarette" means the same as that term is defined in Section 59-14-102.
91          [(2)] (3) "Electronic cigarette" means the same as that term is defined in Section
92     [59-14-802] 59-14-102.
93          [(3)] (4) "Electronic cigarette product" means an electronic cigarette or an electronic
94     cigarette substance.
95          [(4)] (5) "Electronic cigarette substance" means the same as that term is defined in
96     Section [59-14-802] 59-14-102.
97          (6) "Local health department" means the same as that term is defined in Section
98     26A-1-102.
99          [(5)] (7) "Manufacture" includes:
100          (a) to cast, construct, or make electronic cigarettes; or
101          (b) to blend, make, process, or prepare an electronic cigarette substance.
102          [(6)] (8) "Manufacturer sealed electronic cigarette substance" means an electronic
103     cigarette substance that is sold in a container that:
104          (a) is pre-filled by the electronic cigarette substance manufacturer; and
105          (b) the electronic cigarette manufacturer does not intend for a consumer to open.
106          (9) "Nontherapeutic nicotine device" means the same as that term is defined in Section
107     59-14-102.
108          (10) "Nontherapeutic nicotine device substance" means the same as that term is defined
109     in Section 59-14-102.
110          (11) "Nontherapeutic nicotine product" means a nontherapeutic nicotine device or a
111     nontherapeutic nicotine device substance.
112          Section 4. Section 26-57-104 is enacted to read:
113          26-57-104. Nontherapeutic nicotine products and alternative nicotine products --
114     Labeling -- Manufacturing and quality control standards.
115          (1) (a) To the extent that the United States Food and Drug Administration issues a
116     regulation regarding labeling, nicotine content, packaging, or product quality for a
117     nontherapeutic nicotine product or an alternative nicotine product, the federal regulations apply
118     and the department is not required under this section to establish a rule on the same subject for
119     which a federal regulation exists .
120          (b) The department or a local health department may not enact a rule or regulation
121     regarding labeling, nicotine content, packaging, or product quality for a nontherapeutic nicotine
122     product or an alternative nicotine content that conflicts with a regulation by the United States
123     Food and Drug Administration.
124          (2) No later than January 1, 2018, the department shall, in consultation with a local
125     health department and with input from members of the public, establish by rule made in
126     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, standards for a
127     nontherapeutic nicotine product and an alternative nicotine product regarding:
128          (a) labeling;
129          (b) nicotine content;
130          (c) packaging; and
131          (d) product quality.
132          (3) The standards established by the department under Subsection (2) do not apply to a
133     manufacturer sealed nontherapeutic nicotine product or a manufacturer sealed alternative
134     nicotine product.
135          (4) Beginning on July 1, 2018, a person may not distribute or sell a nontherapeutic
136     nicotine product or an alternative nicotine product unless the nontherapeutic nicotine product
137     or alternative nicotine product complies with the standards established by the department under
138     Subsection (2).
139          (5) (a) Beginning on July 1, 2018, a local health department may not enact a rule or
140     regulation regarding the labeling, nicotine content, packaging, or product quality of a
141     nontherapeutic nicotine product or an alternative nicotine product that is not identical to the
142     standards established by the department under Subsection (2).
143          (b) Except as provided in Subsection (5)(c), a local health department may enact a rule
144     or regulation regarding nontherapeutic nicotine product manufacturing or alternative nicotine
145     product manufacturing.
146          (c) A local health department may not enact a rule or regulation regarding a
147     manufacturer sealed nontherapeutic nicotine product or a manufacturer sealed alternative
148     nicotine product.
149          Section 5. Section 59-14-102 is amended to read:
150          59-14-102. Definitions.
151          As used in this chapter:
152          (1) (a) Except as provided in Subsection (1)(c), "alternative nicotine product" means a
153     product, other than a cigarette, a counterfeit cigarette, an electronic cigarette product, or a
154     tobacco product, that:
155          (i) contains nicotine;
156          (ii) is intended for human consumption;
157          (iii) is not purchased with a prescription from a licensed physician; and
158          (iv) is not approved by the United States Food and Drug Administration as nicotine
159     replacement therapy.
160          (b) "Alternative nicotine product" includes:
161          (i) pure nicotine;
162          (ii) snortable nicotine;
163          (iii) dissolvable orbs, pellets, sticks, or strips; and
164          (iv) nicotine-laced food and drink.
165          (c) "Alternative nicotine product" does not include a fruit, a vegetable, or a tea that
166     contains naturally occurring nicotine.
167          [(1)] (2) "Cigarette" means a roll for smoking made wholly or in part of tobacco:
168          (a) regardless of:
169          (i) the size of the roll;
170          (ii) the shape of the roll; or
171          (iii) whether the tobacco is[: (A)] flavored[; (B)], adulterated[;], or [(C)] mixed with
172     any other ingredient; and
173          (b) if the wrapper or cover of the roll is made of paper or any other substance or
174     material except tobacco.
175          [(2)] (3) "Cigarette rolling machine" means a device or machine that has the capability
176     to produce at least 150 cigarettes in less than 30 minutes.
177          [(3)] (4) "Cigarette rolling machine operator" means a person [who] that:
178          (a) (i) controls, leases, owns, possesses, or otherwise has available for use a cigarette
179     rolling machine; and
180          (ii) makes the cigarette rolling machine available for use by another person to produce
181     a cigarette; or
182          (b) offers for sale, at retail, a cigarette produced from the cigarette rolling machine.
183          [(4)] (5) "Consumer" means a person that is not required:
184          (a) under Section 59-14-201 to obtain a license under Section 59-14-202; [or]
185          (b) under Section 59-14-301 to obtain a license under Section 59-14-202[.]; or
186          (c) under Section 59-14-803 to obtain a license.
187          [(5)] (6) "Counterfeit cigarette" means:
188          (a) a cigarette that has a false manufacturing label; or
189          (b) a package of cigarettes bearing a counterfeit tax stamp.
190          (7) (a) "Electronic cigarette" means:
191          (i) an electronic device used to deliver or capable of delivering vapor containing
192     nicotine to an individual's respiratory system;
193          (ii) a component of the device described in Subsection (7)(a)(i); or
194          (iii) an accessory sold in the same package as the device described in Subsection
195     (7)(a)(i).
196          (b) "Electronic cigarette" includes an e-cigarette as that term is defined in Section
197     26-38-2.
198          (8) "Electronic cigarette product" means an electronic cigarette or an electronic
199     cigarette substance.
200          (9) "Electronic cigarette substance" means any substance, including liquid containing
201     nicotine, used or intended for use in an electronic cigarette.
202          [(6)] (10) "Importer" means a person [who] that imports into the United States, either
203     directly or indirectly, a finished cigarette for sale or distribution.
204          [(7)] (11) "Indian tribal entity" means a federally recognized Indian tribe, tribal entity,
205     or any other person doing business as a distributor or retailer of cigarettes on tribal lands
206     located in the state.
207          [(8)] (12) "Little cigar" means a roll for smoking that:
208          (a) is made wholly or in part of tobacco;
209          (b) [that] uses an integrated cellulose acetate filter or other similar filter; and
210          (c) [that] is wrapped in a substance:
211          (i) containing tobacco; and
212          (ii) that is not exclusively natural leaf tobacco.
213          [(9)] (13) (a) Except as provided in Subsection [(9)] (13)(b), "manufacturer" means a
214     person [who] that:
215          (i) manufactures, fabricates, assembles, processes, or labels a finished cigarette; or
216          (ii) makes, modifies, mixes, manufactures, fabricates, assembles, processes, labels,
217     repackages, relabels, or imports a finished electronic cigarette product, nontherapeutic nicotine
218     product, or alternative nicotine product.
219          (b) "Manufacturer" does not include a cigarette rolling machine operator.
220          [(10)] (14) "Moist snuff" means tobacco that:
221          (a) is finely[: (i)] cut[; (ii)], ground[;], or [(iii)] powdered;
222          (b) has at least 45% moisture content, as determined by the commission by rule made
223     in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
224          (c) is not intended to be:
225          (i) smoked; or
226          (ii) placed in the nasal cavity; and
227          (d) except for single-use pouches of loose tobacco, is not packaged, produced, sold, or
228     distributed in single-use units, including:
229          (i) tablets;
230          (ii) lozenges;
231          (iii) strips;
232          (iv) sticks; or
233          (v) packages containing multiple single-use units.
234          (15) "Nicotine" means a poisonous, nitrogen containing chemical that is made
235     synthetically or derived from tobacco or other plants.
236          (16) (a) "Nontherapeutic nicotine device" means a device that:
237          (i) is used to deliver nicotine to the bloodstream by:
238          (A) puffing or inhaling pure nicotine into the mouth; or
239          (B) spraying nicotine into the nose;
240          (ii) is not purchased with a prescription from a licensed physician; and
241          (iii) is not approved by the United States Food and Drug Administration as nicotine
242     replacement therapy.
243          (b) "Nontherapeutic nicotine device" includes a nontherapeutic nicotine inhaler or
244     nontherapeutic nicotine nasal spray.
245          (17) "Nontherapeutic nicotine device substance" means a cartridge that:
246          (a) contains nicotine;
247          (b) is used or intended to be used in a nontherapeutic nicotine device;
248          (c) is not purchased with a prescription from a licensed physician; and
249          (d) is not approved by the United States Food and Drug Administration as nicotine
250     replacement therapy.
251          (18) "Nontherapeutic nicotine product" means a nontherapeutic nicotine device or a
252     nontherapeutic nicotine device substance.
253          [(11)] (19) "Retailer" means a person that:
254          (a) sells or distributes a cigarette, electronic cigarette product, nontherapeutic nicotine
255     product, or alternative nicotine product to a consumer in the state; or
256          (b) intends to sell or distribute a cigarette, electronic cigarette product, nontherapeutic
257     nicotine product, or alternative nicotine product to a consumer in the state.
258          [(12)] (20) "Stamp" means the indicia required to be placed on a cigarette package that
259     evidences payment of the tax on cigarettes required by Section 59-14-205.
260          [(13)] (21) (a) "Tobacco product" means a product made of, or containing, tobacco.
261          (b) "Tobacco product" includes:
262          (i) a cigarette produced from a cigarette rolling machine;
263          (ii) a little cigar; or
264          (iii) moist snuff.
265          (c) "Tobacco product" does not include a cigarette.
266          [(14)] (22) "Tribal lands" means land held by the United States in trust for a federally
267     recognized Indian tribe.
268          Section 6. Section 59-14-201 is amended to read:
269          59-14-201. License -- Application of part -- Fee -- Bond -- Exceptions.
270          (1) It is unlawful for any person in this state to manufacture, import, distribute, barter,
271     sell, exchange, or offer cigarettes for sale without first having obtained a license issued by the
272     commission under Section 59-14-202.
273          (2) Except for the tax rates described in Subsection 59-14-204(2), this part does not
274     apply to a cigarette produced from a cigarette rolling machine.
275          (3) (a) A license may not be issued for the sale of cigarettes until the applicant has paid
276     a license fee of $30 or a license renewal fee of $20, as appropriate.
277          (b) The fee for reinstatement of a license that has been revoked, suspended, or allowed
278     to expire is $30.
279          (4) (a) (i) [A license] The commission may not [be issued] issue a license until the
280     applicant files a bond with the commission.
281          (ii) The commission shall determine the form and the amount of the bond, the
282     minimum amount of which shall be $500.
283          (iii) The bond shall be executed by the applicant as principal, with a corporate surety,
284     payable to the state and conditioned upon the faithful performance of all the requirements of
285     this chapter, including the payment of all taxes, penalties, and other obligations.
286          (b) An applicant is not required to post a bond if the applicant:
287          (i) purchases, during the license year, only products that have the proper state stamp
288     affixed as required by this chapter; and
289          (ii) files an affidavit with the applicant's application attesting to this fact.
290          Section 7. Section 59-14-203.5 is amended to read:
291          59-14-203.5. Commission action to suspend or revoke license.
292          (1) (a) The commission shall suspend or revoke licenses to sell tobacco, as required
293     under Section 26-42-103 regarding suspension or revocation of a license due to the sale of
294     cigarettes to a person younger than 19 years of age, upon receipt of notice of an enforcing
295     agency's finding of a violation of Section 26-42-103.
296          (b) The commission shall provide written notice of the suspension or revocation to the
297     licensee.
298          (2) It is the duty of the enforcing agency to advise the commission of any finding of a
299     violation of Section 26-42-103 for which suspension or revocation of the license is a penalty.
300          (3) When the commission revokes a licensee's license under this section, the
301     commission may not issue to the licensee, or to the business entity using the license that is
302     revoked, a license under Section 59-14-202 [or], Section 59-14-301 to sell tobacco, or Section
303     59-14-803 to sell an electronic cigarette product, a nontherapeutic nicotine product, or an
304     alternative nicotine product at the location for which the license was issued for one year after:
305          (a) the day on which the time for filing an appeal of the revocation ends; or
306          (b) if the revocation is appealed, the day on which the decision to uphold the
307     revocation becomes final.
308          Section 8. Section 59-14-801 is amended to read:
309     
Part 8. Electronic Cigarette and Other Nicotine Product Licensing and Taxation Act

310          59-14-801. Title.
311          This part is known as the "Electronic Cigarette and Other Nicotine Product Licensing
312     and Taxation Act."
313          Section 9. Section 59-14-802 is amended to read:
314          59-14-802. Definitions.
315          As used in this part:
316          [(1) "Cigarette" means the same as that term is defined in Section 59-14-102.]
317          [(2) (a) "Electronic cigarette" means:]
318          [(i) an electronic device used to deliver or capable of delivering vapor containing
319     nicotine to an individual's respiratory system;]
320          [(ii) a component of the device described in Subsection (2)(a)(i); or]
321          [(iii) an accessory sold in the same package as the device described in Subsection
322     (2)(a)(i).]
323          [(b) "Electronic cigarette" includes an e-cigarette as defined in Section 26-38-2.]
324          [(3) "Electronic cigarette product" means an electronic cigarette or an electronic
325     cigarette substance.]
326          [(4) "Electronic cigarette substance" means any substance, including liquid containing
327     nicotine, used or intended for use in an electronic cigarette.]
328          [(5)] (1) "Enforcing agency" means the Department of Health, a county health
329     department, or a local health department, when enforcing:
330          (a) Title 26, Chapter 42, Civil Penalties for Tobacco Sales to Underage Persons; or
331          (b) Title 26, Chapter 57, Electronic Cigarette and Other Nicotine Product Regulation
332     Act.
333          [(6)] (2) "Licensee" means a person that holds a valid license to sell an electronic
334     cigarette [products] product, a nontherapeutic nicotine product, or an alternative nicotine
335     product.
336          [(7) "License to sell an electronic cigarette product" means a license issued by the
337     commission under Subsection 59-14-803(3).]
338          (3) (a) "Manufacturer's sales price" means the amount the manufacturer of an electronic
339     cigarette substance, prefilled electronic cigarette, nontherapeutic nicotine device substance,
340     prefilled nontherapeutic nicotine device, or alternative nicotine product charges after
341     subtracting a discount.
342          (b) "Manufacturer's sales price" includes an original Utah destination freight charge,
343     regardless of:
344          (i) whether the electronic cigarette substance, prefilled electronic cigarette,
345     nontherapeutic nicotine device substance, prefilled nontherapeutic nicotine device, or
346     alternative nicotine product is shipped f.o.b. origin or f.o.b. destination; or
347          (ii) who pays the original Utah destination charge.
348          (4) "Prefilled electronic cigarette" means an electronic cigarette that is sold prefilled
349     with an electronic cigarette substance.
350          (5) "Prefilled nontherapeutic nicotine device" means a nontherapeutic nicotine device
351     that is sold prefilled with a nontherapeutic nicotine device substance.
352          Section 10. Section 59-14-803 is amended to read:
353          59-14-803. Registration and license to sell an electronic cigarette product,
354     nontherapeutic nicotine product, or alternative nicotine product.
355          (1) (a) Except as provided in Subsection [(2)] (1)(b), a person may not sell, offer to
356     sell, or distribute an electronic cigarette product, nontherapeutic nicotine product, or alternative
357     nicotine product in Utah without first:
358          (i) registering with the commission under this section; and
359          (ii) obtaining a license to sell an electronic cigarette product, nontherapeutic nicotine
360     product, or alternative nicotine product from the commission under this section.
361          [(2)] (b) A person that holds a valid license to sell cigarettes under Section 59-14-201,
362     or a person that holds a valid license to sell tobacco products under Section 59-14-301, may[,
363     without obtaining a separate license to sell an electronic cigarette product under this part,] sell,
364     offer to sell, or distribute an electronic cigarette product, nontherapeutic nicotine product, or
365     alternative nicotine product in Utah without obtaining a separate license to sell an electronic
366     cigarette product, nontherapeutic nicotine product, or alternative nicotine product in
367     accordance with this [part] section.
368          (2) (a) To register with the commission, a person shall file a bond with the
369     commission.
370          (b) (i) The bond shall be in the form and amount determined by the commission, the
371     minimum amount of which shall be $500.
372          (ii) The bond shall be executed by the registrant as principal, with a corporate surety,
373     payable to the state and conditioned upon the faithful performance of all the requirements of
374     this chapter, including the payment of all taxes, penalties, and other obligations.
375          (c) The commission may not charge a fee for registration.
376          (3) (a) Except as provided in Subsection (6), the commission shall issue a license to
377     sell an electronic cigarette product, nontherapeutic nicotine product, or alternative nicotine
378     product to a person that[:] meets the requirements of this Subsection (3).
379          [(a)] (b) [submits] The person requesting a license shall file an application, on a form
380     created by the commission, that includes:
381          (i) the person's name;
382          (ii) the address of the facility where the person will sell an electronic cigarette product,
383     nontherapeutic nicotine product, or alternative nicotine product; and
384          (iii) any other information the commission requires to implement this chapter[; and].
385          [(b)] (c) [pays] With the application, the person shall pay a fee:
386          (i) in the amount of $30 if the person is applying for a first-time license or reinstating a
387     revoked, suspended, or expired license; or
388          (ii) [if renewing the person's license,] in the amount of $20 if the person is renewing a
389     license.
390          (d) (i) The person shall file a bond with the commission in the form and the amount
391     determined by the commission, the minimum amount of which shall be $500.
392          (ii) The bond required by this Subsection (3) may be made in combination with the
393     bond required by Subsection (2).
394          (4) A license described in Subsection (3) is:
395          (a) valid only at one fixed business address;
396          (b) valid for three years;
397          (c) valid only for a physical location; and
398          (d) renewable if a licensee meets the criteria for licensing described in Subsection (3).
399          (5) The commission shall, after notifying a licensee, revoke a license described in
400     Subsection (3) if an enforcing agency determines the licensee has violated a provision of:
401          (a) Title 26, Chapter 42, Civil Penalties for Tobacco Sales to Underage Persons; or
402          (b) Title 26, Chapter 57, Electronic Cigarette and Other Nicotine Product Regulation
403     Act.
404          (6) If the commission revokes a person's license to sell an electronic cigarette product,
405     nontherapeutic nicotine product, or alternative nicotine product under Subsection (5), the
406     commission may not issue a license to sell an electronic cigarette product, nontherapeutic
407     nicotine product, or alternative nicotine product, a license to sell cigarettes under Section
408     59-14-201, or a license to sell tobacco under Section 59-14-301 to the person until one year
409     after:
410          (a) the day on which the time for filing an appeal of the revocation ends, as determined
411     by the enforcing agency; or
412          (b) if the person appeals the enforcing agency's decision to revoke the license to sell an
413     electronic cigarette product, nontherapeutic nicotine product, or alternative nicotine product,
414     the day on which the enforcing agency's decision to uphold the revocation is final.
415          (7) If the commission revokes a person's license under Subsection (5), the commission
416     shall also revoke the person's license to sell cigarettes under Section 59-14-201, if any, and the
417     person's license to sell tobacco under Section 59-14-301, if any.
418          (8) The commission may make rules in accordance with Title 63G, Chapter 3, Utah
419     Administrative Rulemaking Act, to establish the additional information described in
420     Subsection (3)[(a)](b)(iii) that a person must provide in the application described in Subsection
421     (3)[(a)](b).
422          (9) It is a class B misdemeanor for a person to violate Subsection (1).
423          Section 11. Section 59-14-804 is enacted to read:
424          59-14-804. Taxation of an electronic cigarette product, a nontherapeutic nicotine
425     product, and an alternative nicotine product.
426          (1) (a) There is levied a tax upon the following:
427          (i) an electronic cigarette substance; and
428          (ii) a prefilled electronic cigarette.
429          (b) Beginning on July 1, 2018, there is levied a tax upon the following:
430          (i) an alternative nicotine product;
431          (ii) a nontherapeutic nicotine device substance; or
432          (iii) a prefilled nontherapeutic nicotine device.
433          (2) The rate of the tax levied under Subsection (1) is .86 multiplied by the
434     manufacturer's sales price.
435          (3) (a) A manufacturer, jobber, distributor, wholesaler, retailer, consumer, or user shall
436     pay the tax levied under Subsection (1) at the time that the electronic cigarette substance,
437     prefilled electronic cigarette, nontherapeutic nicotine device substance, prefilled nontherapeutic
438     nicotine device, or alternative nicotine product is first received in the state.
439          (b) A manufacturer, jobber, distributor, wholesaler, retailer, consumer, or user may not
440     resell the electronic cigarette substance, prefilled electronic cigarette, nontherapeutic nicotine
441     device substance, prefilled nontherapeutic nicotine device, or alternative nicotine product to
442     another distributor, another retailer, or a consumer before paying the tax levied under
443     Subsection (1).
444          (4) (a) The manufacturer, jobber, distributor, wholesaler, retailer, consumer, or user
445     shall remit the taxes collected in accordance with this section to the commission.
446          (b) The commission shall deposit, for each fiscal year:
447          (i) the first $2,000,000 remitted in accordance with this section into the Electronic
448     Cigarette Substance and Other Nicotine Product Tax Restricted Account, created in Section
449     59-14-805; and
450          (ii) the balance of remittances received in accordance with this section into the General
451     Fund.
452          Section 12. Section 59-14-805 is enacted to read:
453          59-14-805. Electronic Cigarette Substance and Other Nicotine Product Tax
454     Restricted Account.
455          (1) There is created within the General Fund a restricted account known as the
456     "Electronic Cigarette Substance and Other Nicotine Product Tax Restricted Account."
457          (2) The Electronic Cigarette Substance and Other Nicotine Product Tax Restricted
458     Account consists of:
459          (a) for each fiscal year, the first $2,000,000 collected from the tax imposed by Section
460     59-14-804; and
461          (b) amounts appropriated by the Legislature.
462          (3) For each fiscal year beginning with fiscal year 2017-18, and subject to
463     appropriation by the Legislature, the Division of Finance shall distribute money from the
464     Electronic Cigarette Substance and Other Nicotine Product Tax Restricted Account to the local
465     health departments in accordance with Section 26A-1-116 for the purpose of:
466          (a) enforcing the regulation provisions under Section 26-57-103; and
467          (b) providing electronic cigarette and other nicotine product use prevention education
468     to youth.
469          Section 13. Section 76-10-101 is amended to read:
470     
Part 1. Cigarettes, Tobacco, Other Nicotine Substances, and Psychotoxic Chemical

471     
Substances

472          76-10-101. Definitions.
473          As used in this part:
474          (1) "Alternative nicotine product" means the same as that term is defined in Section
475     59-14-102.
476          (2) "Cigar" means a product that contains nicotine, is intended to be burned under
477     ordinary conditions of use, and consists of any roll of tobacco wrapped in leaf tobacco, or in
478     any substance containing tobacco, other than any roll of tobacco that is a cigarette as described
479     in Subsection [(2)] (3).
480          [(2)] (3) "Cigarette" means a product that contains nicotine, is intended to be burned
481     under ordinary conditions of use, and consists of:
482          (a) any roll of tobacco wrapped in paper or in any substance not containing tobacco; or
483          (b) any roll of tobacco wrapped in any substance containing tobacco which, because of
484     its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to
485     be offered to, or purchased by, consumers as a cigarette described in Subsection [(2)] (3)(a).
486          [(3) "Electronic cigarette" means an electronic cigarette product, as defined in Section
487     59-14-802.]
488          (4) (a) "Electronic cigarette" means:
489          (i) an electronic device used to deliver or capable of delivering vapor containing
490     nicotine to an individual's respiratory system;
491          (ii) a component of the device described in Subsection (4)(a)(i); or
492          (iii) an accessory sold in the same package as the device described in Subsection
493     (4)(a)(i).
494          (b) "Electronic cigarette" includes an e-cigarette as that term is defined in Section
495     26-38-2.
496          (5) "Electronic cigarette product" means an electronic cigarette or electronic cigarette
497     substance.
498          (6) "Electronic cigarette substance" means any substance, including liquid containing
499     nicotine, used or intended for use in an electronic cigarette.
500          (7) (a) "Nontherapeutic nicotine device" means a device that:
501          (i) is used to deliver nicotine to the bloodstream by:
502          (A) puffing or inhaling pure nicotine into the mouth; or
503          (B) spraying nicotine into the nose;
504          (ii) is not purchased with a prescription from a licensed physician; and
505          (iii) is not approved by the United States Food and Drug Administration as nicotine
506     replacement therapy.
507          (b) "Nontherapeutic nicotine device" includes a nontherapeutic nicotine inhaler or
508     nontherapeutic nicotine nasal spray.
509          (8) "Nontherapeutic nicotine device substance" means a cartridge that:
510          (a) contains nicotine;
511          (b) is used or intended to be used in a nontherapeutic nicotine device;
512          (c) is not purchased with a prescription from a licensed physician; and
513          (d) is not approved by the United States Food and Drug Administration as nicotine
514     replacement therapy.
515          (9) "Nontherapeutic nicotine product" means a nontherapeutic nicotine device or a
516     nontherapeutic nicotine device substance.
517          [(4)] (10) "Place of business" includes:
518          (a) a shop;
519          (b) a store;
520          (c) a factory;
521          (d) a public garage;
522          (e) an office;
523          (f) a theater;
524          (g) a recreation hall;
525          (h) a dance hall;
526          (i) a poolroom;
527          (j) a café;
528          (k) a cafeteria;
529          (l) a cabaret;
530          (m) a restaurant;
531          (n) a hotel;
532          (o) a lodging house;
533          (p) a streetcar;
534          (q) a bus;
535          (r) an interurban or railway passenger coach;
536          (s) a waiting room; and
537          (t) any other place of business.
538          [(5)] (11) "Smoking" means the possession of any lighted cigar, cigarette, pipe, or other
539     lighted smoking equipment.
540          Section 14. Section 76-10-104 is amended to read:
541          76-10-104. Providing a cigar, cigarette, electronic cigarette, nontherapeutic
542     nicotine product, alternative nicotine product, or tobacco to a minor -- Penalties.
543          (1) Any person who knowingly, intentionally, recklessly, or with criminal negligence
544     provides any cigar, cigarette, electronic cigarette product, nontherapeutic nicotine product, or
545     alternative nicotine product, or tobacco in any form, to any person under 19 years of age, is
546     guilty of a class C misdemeanor on the first offense, a class B misdemeanor on the second
547     offense, and a class A misdemeanor on subsequent offenses.
548          (2) For purposes of this section "provides":
549          (a) includes selling, giving, furnishing, sending, or causing to be sent; and
550          (b) does not include the acts of the United States Postal Service or other common
551     carrier when engaged in the business of transporting and delivering packages for others or the
552     acts of a person, whether compensated or not, who transports or delivers a package for another
553     person without any reason to know of the package's content.
554          Section 15. Section 76-10-104.1 is amended to read:
555          76-10-104.1. Providing tobacco paraphernalia to minors -- Penalties.
556          (1) For purposes of this section:
557          (a) "Provides":
558          (i) includes selling, giving, furnishing, sending, or causing to be sent; and
559          (ii) does not include the acts of the United States Postal Service or other common
560     carrier when engaged in the business of transporting and delivering packages for others or the
561     acts of a person, whether compensated or not, who transports or delivers a package for another
562     person without any reason to know of the package's content.
563          (b) (i) "Tobacco paraphernalia"[:(i)] means any equipment, product, or material of any
564     kind which is used, intended for use, or designed for use to package, repackage, store, contain,
565     conceal, ingest, inhale, or otherwise introduce a cigar, electronic cigarette substance,
566     nontherapeutic nicotine device substance, cigarette, or tobacco in any form into the human
567     body, including:
568          (A) metal, wooden, acrylic, glass, stone, plastic, or ceramic pipes with or without
569     screens, permanent screens, hashish heads, or punctured metal bowls;
570          (B) water pipes;
571          (C) carburetion tubes and devices;
572          (D) smoking and carburetion masks;
573          (E) roach clips: meaning objects used to hold burning material, such as a cigarette, that
574     has become too small or too short to be held in the hand;
575          (F) chamber pipes;
576          (G) carburetor pipes;
577          (H) electric pipes;
578          (I) air-driven pipes;
579          (J) chillums;
580          (K) bongs; and
581          (L) ice pipes or chillers[; and].
582          (ii) "Tobacco paraphernalia" does not include matches or lighters.
583          (2) (a) It is unlawful for a person to knowingly, intentionally, recklessly, or with
584     criminal negligence provide any tobacco paraphernalia to any person under 19 years of age.
585          (b) A person who violates this section is guilty of a class C misdemeanor on the first
586     offense and a class B misdemeanor on subsequent offenses.
587          Section 16. Section 76-10-105 is amended to read:
588          76-10-105. Buying or possessing a cigar, cigarette, electronic cigarette,
589     nontherapeutic nicotine product, or alternative nicotine product, or tobacco by a minor --
590     Penalty -- Compliance officer authority -- Juvenile court jurisdiction.
591          (1) Any [18 year old] 18-year-old person who buys or attempts to buy, accepts, or has
592     in the person's possession any cigar, cigarette, electronic cigarette product, nontherapeutic
593     nicotine product, or alternative nicotine product, or tobacco in any form is guilty of a class C
594     misdemeanor and subject to:
595          (a) a minimum fine or penalty of $60; and
596          (b) participation in a court-approved tobacco education program, which may include a
597     participation fee.
598          (2) Any person under the age of 18 who buys or attempts to buy, accepts, or has in the
599     person's possession any cigar, cigarette, electronic cigarette product, nontherapeutic nicotine
600     product, or alternative nicotine product, or tobacco in any form is subject to the jurisdiction of
601     the Juvenile Court and:
602          (a) a minimum fine or penalty of $60; and
603          (b) participation in a court-approved tobacco education program, which may include a
604     participation fee.
605          (3) A compliance officer appointed by a board of education under Section 53A-3-402
606     may issue citations for violations of this section committed on school property. Cited
607     violations shall be reported to the appropriate juvenile court.
608          Section 17. Section 76-10-105.1 is amended to read:
609          76-10-105.1. Requirement of direct, face-to-face sale of cigarettes, tobacco,
610     electronic cigarettes, nontherapeutic nicotine product, or alternative nicotine product --
611     Minors not allowed in tobacco specialty shop -- Penalties.
612          (1) As used in this section:
613          (a) "Cigarette" means the same as that term is defined in Section 59-14-102.
614          (b) (i) "Face-to-face exchange" means a transaction made in person between an
615     individual and a retailer or retailer's employee.
616          (ii) "Face-to-face exchange" does not include a sale through a:
617          (A) vending machine; or
618          (B) self-service display.
619          (c) "Retailer" means a person who:
620          (i) sells a cigarette, tobacco, [or] an electronic cigarette product, a nontherapeutic
621     nicotine product, or an alternative nicotine product to an individual for personal consumption;
622     or
623          (ii) operates a facility with a vending machine that sells a cigarette, tobacco, [or] an
624     electronic cigarette product, a nontherapeutic nicotine product, or an alternative nicotine
625     product.
626          (d) "Self-service display" means a display of a cigarette, tobacco, [or] an electronic
627     cigarette product, a nontherapeutic nicotine product, or an alternative nicotine product to which
628     the public has access without the intervention of a retailer or retailer's employee.
629          (e) "Tobacco" means any product, except a cigarette, made of or containing tobacco.
630          (f) "Tobacco specialty shop" means a retailer with a physical location that derives at
631     least 80% of its total sales from the sale of cigarettes, tobacco, [or] electronic [cigarettes]
632     cigarette products, nontherapeutic nicotine products, or alternative nicotine products.
633          (2) Except as provided in Subsection (3), a retailer may sell a cigarette, tobacco, [or] an
634     electronic cigarette product, a nontherapeutic nicotine product, or an alternative nicotine
635     product only in a face-to-face exchange.
636          (3) The face-to-face sale requirement in Subsection (2) does not apply to:
637          (a) a mail-order, telephone, or Internet sale made in compliance with Section
638     59-14-509;
639          (b) a sale from a vending machine or self-service display that is located in an area of a
640     retailer's facility:
641          (i) that is distinct and separate from the rest of the facility; and
642          (ii) where the retailer only allows an individual who complies with Subsection (4) to be
643     present; or
644          (c) a sale at a tobacco specialty shop.
645          (4) An individual who is less than 19 years old may not enter or be present at a tobacco
646     specialty shop unless the individual is:
647          (a) accompanied by a parent or legal guardian;
648          (b) present at the tobacco shop for a bona fide commercial purpose other than to
649     purchase a cigarette, tobacco, [or] an electronic cigarette product, a nontherapeutic nicotine
650     product, or an alternative nicotine product; or
651          (c) 18 years old or older and an active duty member of the United States Armed Forces,
652     as demonstrated by a valid, government-issued military identification card.
653          (5) A parent or legal guardian who accompanies, under Subsection (4)(a), an individual
654     into an area described in Subsection (3)(b), or into a tobacco specialty shop, may not allow the
655     individual to purchase a cigarette, tobacco, [or] an electronic cigarette product, a
656     nontherapeutic nicotine product, or an alternative nicotine product.
657          (6) A violation of Subsection (2) or (4) is a:
658          (a) class C misdemeanor on the first offense;
659          (b) class B misdemeanor on the second offense; and
660          (c) class A misdemeanor on the third and all subsequent offenses.
661          (7) An individual who violates Subsection (5) is guilty of providing tobacco to a minor
662     under Section 76-10-104.
663          (8) (a) Any ordinance, regulation, or rule adopted by the governing body of a political
664     subdivision of the state or by a state agency that affects the sale, placement, or display of
665     cigarettes, tobacco, [or] an electronic [cigarettes] cigarette product, a nontherapeutic nicotine
666     product, or an alternative nicotine product, that is not essentially identical to the provisions of
667     this section and Section 76-10-102 is superseded.
668          (b) Subsection (8)(a) does not apply to the adoption or enforcement of a land use
669     ordinance by a municipal or county government.
670          Section 18. Effective date.
671          This bill takes effect on July 1, 2017.




Legislative Review Note
Office of Legislative Research and General Counsel