This bill provides that a person who sells or distributes a vapor product to an individual under 21 in violation of either the offense of unlawful sale or distribution to underage persons or the offense of illegal vending machine sales commits a Class A misdemeanor, punishable by a sentence of imprisonment not greater than 11 months, 29 days; a fine not to exceed $2,500; or both. VAPOR PRODUCT BUSINESS LICENSE Beginning December 1, 2025, this bill generally prohibits a person, firm or corporation from operating as a retailer selling vapor products in this state without first obtaining a vapor product business license issued by the department of commerce and insurance ("department"), or selling, at retail, a vapor product to a customer except through a face-to-face sales transaction at a licensed, age-restricted vapor product business. However, persons engaged in the display, exhibition, or sale of vapor products, including flavored vapor products, at trade shows or exhibitions are not required to obtain such a license as long as (i) access to the portion of the trade show's venue where vapor products are displayed, offered for sale, or sold is restricted to persons who are 21 or older, (ii) each attendee of the trade show, as a condition of admission to the venue, presents a photo identification to verify age, and (iii) manufacturers, distributors, or retailers whose vapor products are displayed, offered for sale, or sold at the venue must conduct a secondary age authentication and verification prior to commencing the retail sale transaction for any vapor product. This bill provides that, in addition to any other fines or penalties that may apply, a retailer who violates the above provisions is subject to a civil penalty of $5,000 for the first violation, $10,000 for the second violation within three years, $25,000 and a 15-day suspension of the license for a third of subsequent violation within three years, and revocation of the license upon the fourth violation within three years. APPLICATION FOR LICENSE This bill requires each application for a vapor products business license to be made in a form prescribed by the department, along with the license fee, and any supporting documentation required by the department. The license may be renewed annually. The license must (i) be posted in a conspicuous place on the premises of the business where vapor products are sold and (ii) remain in full force and effect from the date of issuance until the next occurring January 1, unless it is surrendered by the licensee, suspended, or revoked. This bill provides that the fee for each license is $250 per year for each licensed premises, and the fee is payable to the department. The license is not transferable from one person to another or from one location to another. A new license is required whenever a retailer has a change in ownership. Duties of the Department This bill requires the department to establish a procedure for administering citations, issuing orders, and filing appeals under this bill. The department must investigate the information provided in each vapor product business licensure application and if the license is approved, conduct random inspections or compliance checks of the licensee not less than once annually during normal business hours or as deemed appropriate by the commissioner. This bill requires any violation found during a compliance check to be rechecked by the department's enforcement division not earlier than one month nor later than three months after a notice of violation is issued to the licensee, or as soon as the commissioner deems practicable. Duties of the Commissioner This bill requires the commissioner of commerce and insurance ("commissioner") to approve or deny every application for a license within 60 days from the receipt of a completed application. If the application is denied, then (i) the license is not issued, (ii) the license fee is returned to the applicant, (iii) the applicant must be notified of the commissioner's denial, which must include the reason for the denial, and (iv) the applicant may appeal the denial and request an administrative hearing on the matter. If the commissioner permanently revokes a license, then this bill requires the commissioner to notify the applicant within 10 days of the decision to revoke the license, commence a hearing on the license revocation, and issue a final order explaining the decision and facts supporting the license revocation. A final order of the commissioner is appealable to the chancery court in the jurisdiction of the licensee. RULEMAKING This bill requires the department to promulgate rules to implement this bill.

Statutes affected:
Introduced: 39-17-1510