Bill Summary – FastDemocracy

0908.01000
     Sixty-eighth
     Legislative Assembly                   HOUSE BILL NO. 1412
     of North Dakota
     Introduced by
       Representatives Mitskog, Nelson
       Senator Bekkedahl
  A BILL for an Act to amend and reenact sections 57-36-01, 57-36-02, 57-36-04, 57-36-05,
  57-36-09, and 57-36-09.1 of the North Dakota Century Code, relating to licensing requirements
  and the sale of electronic smoking devices; and to provide a penalty.
  BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
      SECTION 1. AMENDMENT. Section 57-36-01 of the North Dakota Century Code is
  amended and reenacted as follows:
      57-36-01. Definitions.
      As used in this chapter, unless the context or subject matter otherwise requires:
      1.   "Chewing tobacco" means any leaf tobacco that is intended to be placed in the mouth.
     2.   "Cigar" means any roll of tobacco wrapped in tobacco.
     3.   "Cigarette" means any roll for smoking made wholly or in part of tobacco or processed
          tobacco and encased in any material except tobacco. "Cigarette"The term also means
          any product of a cigarette-making machine.
     4.   "Cigarette-making machine" means a machine used for commercial purposes to
          process tobacco into a roll or tube, formed or made from any material other than
          tobacco, at a production rate of more than five rolls or tubes per minute.
     5.   "Consumer" means any person who has title to or possession of cigarettes, cigars,
          pipe tobacco, electronic smoking devices, or other tobacco products in storage, for
          use or other consumption in this state.
     6.   "Dealer" includes a retailer and any person other than a distributor who is engaged in
          the business of selling cigarettes, cigarette papers, cigars, pipe tobacco, electronic
          smoking devices, or other tobacco products, or any product of a cigarette-making
          machine.
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      7.   "Distributor" includes any person engaged in the business of producing or
           manufacturing cigarettes, cigarette papers, cigars, pipe tobacco, electronic smoking
           devices, or other tobacco products, or importing into this state cigarettes, cigarette
           papers, cigars, pipe tobacco, electronic smoking devices, or other tobacco products,
           for the purpose of distribution and sale thereof to dealers and retailers. The term also
           includes a dealer that fabricates, repackages, compounds, or mixes electronic
           smoking devices for purposes of sale to a consumer.
      8.   "Electronic smoking device" means a device that may be used to deliver an
           aerosolized, vaporized, or heated substance containing nicotine, regardless of
          whether the nicotine is natural or synthetic, to an individual inhaling from the device,
          and includes an electronic cigarette, e-cigar, e-pipe, vape pen, and e-hookah. The
          term includes any substance containing nicotine, regardless of whether the nicotine is
          natural or synthetic, that may be aerosolized, vaporized, or heated by the device,
          regardless of whether the device is sold separately. The term does not include:
          a.   A cigarette as defined in section 51-25-01;
          b.   A cigarette as defined in this section;
          c.   A drug, device, or combination product, as those terms are defined in the federal
               Food, Drug, and Cosmetic Act [52 Stat. 1040; 21 U.S.C. 301 et seq.], approved
               for sale by the United States food and drug administration; or
          d.   A battery or battery charger when sold separately.
     9.   "Licensed dealer" means a dealer licensed under the provisions of this chapter.
  9.10.   "Licensed distributor" means a distributor licensed under the provisions of this chapter.
 10.11.   "Other tobacco products" means snuff and chewing tobacco.
 11.12.   "Outlet" means each place of business from which tobacco products are sold.
    13.   "Person" means any individual, firm, fiduciary, partnership, corporation, limited liability
          company, trust, or association however formed.
 12.14.   "Pipe tobacco" means any processed tobacco that, because of its appearance, type,
          packaging, or labeling, is suitable for use and likely to be offered to, or purchased by,
          consumers as tobacco to be smoked in a pipe.
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  13.15.   "Place of business" means a place where tobacco products are sold or where tobacco
           products are manufactured, fabricated, stored, or kept for purposes of sale or
           consumption.
     16.   "Retailer" means a person engaged in the business of selling cigarettes, cigars, pipe
           tobacco, electronic smoking devices, or other tobacco products to consumers.
     17.   "Sale" or "sell" applies to gifts, exchanges, and barter.
  14.18.   "Snuff" means any finely cut, ground, or powdered tobacco that is intended to be
           placed in the mouth.
  15.19.   "Storage" means any keeping or retention of cigarettes, cigars, pipe tobacco,
          electronic smoking devices, or other tobacco products for use or consumption in this
          state.
 16.20.   "Use" means the exercise of any right or power incidental to the ownership or
          possession of cigarettes, cigars, pipe tobacco, electronic smoking devices, or other
          tobacco products.
    SECTION 2. AMENDMENT. Section 57-36-02 of the North Dakota Century Code is
 amended and reenacted as follows:
    57-36-02. Distributors and dealers to be licensed.
     1.   Each person engaged in the business of selling cigarettes, cigarette papers, snuff,
          cigars, electronic smoking devices, or tobacco in this state, including any distributor or
          dealer, mustshall secure a license from the attorney general before engaging or
          continuing to engage in business.
     2.   A separate application and license is required for each distributor at each outlet or
          place of business operated or maintained by a distributor within the state, and a
          separate dealer's license is required for each retail outlet when a person owns or
          controls more than one place of business dealing in cigarettes, cigarette papers, snuff,
          cigars, or tobacco. No retailer will be granted a distributor's license except a retailer
          who, in the usual course of business, performed a distributor's or wholesaler's function
          for at least one year prior to filing the license application. The application prescribed by
          the attorney general must include the name and address of the applicant, the address
          and place of business, the type of business, and other information as required for the
          proper administration of this chapter.
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           a.   A distributor's license does not authorize the distributor to make retail sales.
           b.   A distributor may not be granted a dealer's license unless the distributor has
                possessed a distributor's license issued under this chapter for at least one year
                before filing an application for a dealer's license.
           c.   Notwithstanding subdivision b, a person that can demonstrate to the satisfaction
                of the attorney general that the person has been engaged, in the normal course
                of business, in the sale of electronic smoking devices before July 1, 2018, may
                be granted a dealer's license.
           d.   Each application for a wholesale or distributor's outlet license must be
               accompanied by a fee of twenty-five dollars and a surety bond approved by the
               attorney general.
     3.   A separate application and license is required for each outlet or place of business
          operated or maintained by a dealer in this state.
          a.   A dealer may not sell tobacco products purchased from a distributor not licensed
               under this chapter.
          b.   A person issued a dealer's license under this chapter may not be issued a
               distributor's license.
     4.   Each application for a dealer's outlet or place of business license must be
          accompanied by a fee of fifteen dollars.
     5.   A license application prescribed by the attorney general must include the name and
          address of the applicant, the address and place of business, the type of business, and
          other information as required for the administration of this chapter.
     6.   A reinstatement fee of fifty dollars is required in addition to the annual license fee for
          each license renewal applied for after June thirtieth. The total reinstatement fee may
          not exceed five hundred dollars for any one licensee in any fiscal year. A distributor's
          license does not authorize the holder to make retail sales.
     7.   Each license issued must be prominently displayed on the premisesplace of business
          or outlet covered by the license.
    SECTION 3. AMENDMENT. Section 57-36-04 of the North Dakota Century Code is
 amended and reenacted as follows:
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      57-36-04. Revocation of license - Penalty.
      The attorney general may revoke the license of any dealer or distributor for failure to comply
  with any of the provisions of this chapter, or any of the rules or regulations prescribed by the tax
  commissioner or the attorney general. When a license has been legally revoked, no license
  may be issued again to the licensee for a period of one year thereafter. A person may not sell
  any cigarettes, cigarette papers, snuff, cigars, electronic smoking devices, or tobacco after that
  person's license has been revoked as provided in this chapter.
      SECTION 4. AMENDMENT. Section 57-36-05 of the North Dakota Century Code is
  amended and reenacted as follows:
     57-36-05. Unlawful to sell without license.
     A dealer or distributor may not sell cigarettes, cigarette papers, snuff, cigars, electronic
 smoking devices, or tobacco in this state at wholesale or at retail unless a license has been
 issued to that dealer or distributor as prescribed by this chapter, and a person may not sell, offer
 for sale, or possess with the intent to sell, any cigarettes, cigarette papers, snuff, cigars,
 electronic smoking devices, or tobacco without such license.
     SECTION 5. AMENDMENT. Section 57-36-09 of the North Dakota Century Code is
 amended and reenacted as follows:
     57-36-09. Records to be kept by distributors and reports made - Penalty.
     Distributors shall keep records and make reports relating to purchases and sales of
 cigarettes, cigarette papers, cigars, pipe tobacco, electronic smoking devices, or other tobacco
 products made by them, and must be punished for failure so to do, as follows:
     1.    Each distributor who shall dispose of cigarettes, cigarette papers, cigars, pipe tobacco,
           electronic smoking devices, or other tobacco products shall keep and preserve for one
           yearthree years all invoices of cigarettes, cigarette papers, cigars, pipe tobacco,
           electronic smoking devices, or other tobacco products purchased by the distributor
           and shall permit the state tax commissioner, and assistants, authorized agents, or
           representatives of the state tax commissioner, to inspect and examine all taxable
           merchandise, invoices, receipts, books, papers, and memoranda as may be deemed
           necessary by the state tax commissioner, and assistants, authorized agents, or
           representatives of the state tax commissioner in determining the amount of the tax as
           may be yet due. Each person selling or otherwise disposing of cigarettes, cigarette
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           papers, cigars, pipe tobacco, electronic smoking devices, or other tobacco products as
           a distributor shall keep a record of all sales made within the state showing the name
           and address of the purchaser and the date of sale. For sales of other tobacco
           products, the records must also include the net weight in ounces, as listed by the
           manufacturer.
      2.   On or before the fifteenth day of each month, each licensed distributor, on such form
           as the state tax commissioner shall prescribe, shall report to the tax commissioner all
           purchases and sales of cigarettes, cigarette papers, cigars, pipe tobacco, electronic
           smoking devices, or other tobacco products made from or to any persons either within
          or without this state during the preceding month. For sales of other tobacco products,
          each licensed distributor shall also report to the tax commissioner the net weight in
          ounces, as listed by the manufacturer. The tax levied by this chapter is payable
          monthly and must be remitted to the tax commissioner by each licensed distributor on
          or before the fifteenth day of the month following the monthly period.
     3.   Any person failing to file any prescribed form or return or to pay any tax within the time
          required or permitted by this section is subject to a penalty of five percent of the
          amount of tax due or five dollars, whichever is greater, plus interest of one percent of
          the tax per month or fraction of a month of delay except the first month after the return
          or the tax became due. The tax commissioner, if satisfied that the delay was
          excusable, may waive all or any part of the penalty. The penalty must be paid to the
          tax commissioner and disposed of in the same manner as are other receipts under this
          chapter.
     SECTION 6. AMENDMENT. Section 57-36-09.1 of the North Dakota Century Code is
 amended and reenacted as follows:
     57-36-09.1. WarehouseOutlet - Record of deliveries and shipments.
     Records of all deliveries of shipments of cigarettes and, snuff, cigars, electronic smoking
 devices, or other tobacco products from a licensed public warehouseoutlet to persons within
 this state must be kept by the warehouseoutlet and be available to the tax commissioner for
 inspection. They must show the name and address of the consignee, the date, the quantity and
 purchase price of cigarettes, snuff, cigars, electronic smoking devices, or other tobacco
 products delivered, and such other information as the tax commissioner may require. These
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 records must be preserved for one yearthree years from the date of delivery of the cigarettes,
 snuff, cigars, electronic smoking devices, or other tobacco products.
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Statutes affected: 
INTRODUCED: 57-36-01, 57-36-02, 57-36-04, 57-36-05, 57-36-09, 57-36-09.1
Enrollment: 57-36-01, 57-36-02, 57-36-04, 57-36-05, 57-36-09, 57-36-09.1