Bill Summary – FastDemocracy

LEGISLATIVE SERVICES AGENCY
                OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
                                      200 W. Washington St., Suite 301
                                           Indianapolis, IN 46204
                                               (317) 233-0696
                                                  iga.in.gov
                                 FISCAL IMPACT STATEMENT
LS 6753                                                              NOTE PREPARED: Mar 13, 2020
BILL NUMBER: SB 1                                                    BILL AMENDED: Mar 11, 2020
SUBJECT: Tobacco and Vaping Smoking Age.
FIRST AUTHOR: Sen. Charbonneau                                       BILL STATUS: Enrolled
FIRST SPONSOR: Rep. Kirchhofer
FUNDS AFFECTED: X GENERAL                                            IMPACT: State & Local
                X DEDICATED
                  FEDERAL
Summary of Legislation: The bill prohibits a person who is less than 21 years of age from buying or
possessing: (1) tobacco; (2) e-liquids; or (3) electronic cigarettes. It makes conforming changes regarding
enforcement provisions, sales certificates, prohibition of delivery sales, and notices posted at retail
establishments and at vending machines.
The bill provides that a retail establishment that sells an e-liquid to a person less than 21 years of age is
subject to a civil judgment for an infraction. It doubles the civil judgment for an infraction for: (1) a retail
establishment that sells or distributes tobacco, an e-liquid, or an electronic cigarette to a person less than 21
years of age; and (2) certain retail establishments that allow an underage person to enter their establishment.
It modifies the time frame for when retail establishments may receive enhanced penalties for repeat e-liquid
and tobacco products violations.
The bill requires a merchant who mails or ships cigarettes as part of a delivery sale to use a shipping service
that requires a customer to present identification if they appear to be less than 30 years of age.
The bill provides that a tobacco sales certificate (certificate) may only be issued to a person who has not had
an interest in a certificate revoked by the commission for a business location within one year.
The bill makes it a Class C misdemeanor if a tobacco and vaping business operates within 1,000 feet of a
public or private elementary or secondary school.
The bill provides that a retail establishment in which tobacco products, electronic cigarettes, and e-liquids
account for at least 85% of the retail establishment's gross sales: (1) may not allow a person who is less than
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21 years of age to enter the retail establishment; and (2) is not subject to a statute prohibiting sales of tobacco
or electronic cigarettes through a self-service display.
The bill makes it a Class B infraction for a person to knowingly sell tobacco, an e-liquid, or an electronic
cigarette that contains vitamin E acetate.
It makes technical corrections.
Effective Date: July 1, 2020.
Explanation of State Expenditures: Alcohol and Tobacco Commission (ATC): The ATC would enforce
the bill’s provisions prohibiting the sale of tobacco, e-liquids, and electronic cigarettes to people under age
21. The ATC also administers and enforces laws regarding tobacco sales certificates and requirements for
posting notices at locations where tobacco products are sold. The bill provides that the ATC must not provide
a tobacco sales certificate if the person applying for the certificate had an interest in a certificate revoked by
the ATC for that business location within the preceding one year. To the extent that the ATC increases
enforcement activities, costs would increase. However, it is likely that the ATC can enforce the bill’s
provisions within its existing level of staff and resources.
Division of Mental Health and Addiction: Current law requires the Division of Mental Health and Addiction
of the Family and Social Services Administration to coordinate with the ATC and other law enforcement
agencies to conduct random unannounced inspections at locations where tobacco products are sold. The bill
requires this to also be done at locations where e-liquids or electronic cigarettes are sold. The bill’s
requirements are within the agency’s routine administrative functions and should be able to be implemented
with no additional appropriations, assuming near customary agency staffing and resource levels.
Explanation of State Revenues: Penalties: Revenue could increase by an indeterminable amount from
penalties for infraction violations concerning the sale, purchase, and possession of cigarettes, other tobacco
products, e-liquids, and electronic cigarettes by minors.
State Taxes: As of December 20, 2019, federal law prohibits the sale of tobacco products, including
cigarettes, cigars, and electronic cigarettes, to anyone under 21. The bill would not cause a decrease in
Cigarette and Tobacco Products Taxes or Sales Tax beyond any impact of current federal law.
Additional Information - Penalties: It is currently a Class C infraction for a person or retail establishment
to sell or deliver cigarettes, tobacco, or electronic cigarettes to a person under 18 years of age. It is also a
Class C infraction for a person under 18 to purchase or possess these products. In addition to increasing the
minimum age to 21 which conforms to current federal law, the bill includes e-liquids in these infractions.
The bill doubles the maximum penalties that may be imposed on retailers that sell to underage people. It also
doubles the maximum penalties for an establishment in which the sale of tobacco, e-liquids, or electronic
cigarettes account for 85% of the retail establishment’s gross sales, if they allow underage individuals to
enter the establishment. The bill increases the maximum penalty to $400 to $2,000, depending on the number
of violations in the previous one year. These penalties currently range from $200 to $1,000, depending on
the number of violations in the previous 180 days and are deposited in the Richard D. Doyle Youth Tobacco
Education and Enforcement Fund. The extent of the increase in civil judgments is indeterminable. [In 2017,
355 tobacco retailers failed the ATC’s compliance check program, and 272 failed in 2018.]
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The bill also affects other Class C infractions regarding the sale of cigarettes, tobacco products, and
electronic cigarettes. If additional judgments are entered, revenue to the General Fund and the Richard D.
Doyle Youth Tobacco Education and Enforcement Fund could increase by an indeterminable amount. The
maximum judgment for a Class C infraction is $500.
In addition, the bill makes it a Class B infraction for a person to knowingly sell tobacco, e-liquids, or
electronic cigarettes that contains vitamin E acetate. The maximum judgment for a Class B infraction is
$1,000, which would be deposited in the state General Fund. However, any additional revenue is likely to
be small.
Location of Tobacco Businesses: The bill provides that a tobacco or vaping business may not be located
within 1,000 feet of a school, with certain exceptions. Current law prohibiting tobacco businesses from
locating within 200 feet of a school will continue to apply to businesses that started operating after April 1,
1996 and before July 1, 2020. The penalty for violating this provision is a Class C misdemeanor. If additional
court cases occur and fines are collected, revenue to both the Common School Fund (from fines) and the state
General Fund (from court fees) would increase. The maximum fine for a Class C misdemeanor is $500.
However, any additional revenue would likely be small.
Explanation of Local Expenditures: Location of Tobacco Businesses: A Class C misdemeanor is
punishable by up to 60 days in jail.
Explanation of Local Revenues: Penalties: If additional court actions are filed and a judgment is entered,
local governments would receive revenue from court fees. However, any additional revenue is likely to be
small.
Location of Tobacco Businesses: If additional court actions occur and a guilty verdict is entered, local
governments would receive revenue from court fees. However, any change in revenue would likely be small.
State Agencies Affected: Alcohol and Tobacco Commission; Division of Mental Health and Addiction.
Local Agencies Affected: Trial courts, local law enforcement agencies.
I nf o r m a t i o n So ur ce s : AT C T o b a c c o Co mp l i an c e Ch e c k Enforcement Da t a ,
https://www.in.gov/atc/isep/2400.htm. U.S. Food and Drug Administration, “Selling Tobacco Products in
Retail Stores”, updated 12/20/2019, accessed 12/28/2019,
https://www.fda.gov/tobacco-products/retail-sales-tobacco-products/selling-tobacco-products-retail-stores.
Fiscal Analyst: Lauren Tanselle, 317-232-9586; Randhir Jha, 317-232-9556.
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Statutes affected: 
1. Introduced Senate Bill (S): 24-3-5-4, 24-3-5-5, 24-3-5-8, 35-31.5-2-100, 35-43-5-3.8, 35-46-1-10, 35-46-1-10.2, 35-46-1-10.5, 35-46-1-11, 35-46-1-11.7, 35-46-1-11.8
2. Senate Bill (S): 24-3-5-4, 24-3-5-5, 24-3-5-8, 35-31.5-2-100, 35-43-5-3.8, 35-46-1-10, 35-46-1-10.2, 35-46-1-10.5, 35-46-1-11, 35-46-1-11.5, 35-46-1-11.7, 35-46-1-11.8
3. Engrossed Senate Bill (S): 24-3-5-4, 24-3-5-5, 24-3-5-8, 35-31.5-2-100, 35-43-5-3.8, 35-46-1-10, 35-46-1-10.2, 35-46-1-10.5, 35-46-1-11, 35-46-1-11.5, 35-46-1-11.7, 35-46-1-11.8
4. Senate Bill (H): 24-3-5-4, 24-3-5-5, 24-3-5-8, 35-31.5-2-100, 35-43-5-3.8, 35-46-1-10, 35-46-1-10.2, 35-46-1-10.5, 35-46-1-11, 35-46-1-11.5, 35-46-1-11.7, 35-46-1-11.8
5. Engrossed Senate Bill (H): 24-3-5-4, 24-3-5-5, 24-3-5-8, 35-31.5-2-100, 35-43-5-3.8, 35-46-1-10, 35-46-1-10.2, 35-46-1-10.5, 35-46-1-11, 35-46-1-11.5, 35-46-1-11.7, 35-46-1-11.8
6. Enrolled Senate Bill (S): 24-3-5-4, 24-3-5-5, 24-3-5-8, 35-31.5-2-100, 35-43-5-3.8, 35-46-1-1, 35-46-1-10, 35-46-1-10.2, 35-46-1-10.5, 35-46-1-11, 35-46-1-11.5, 35-46-1-11.7, 35-46-1-11.8