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1 H.729
2 Introduced by Representatives Gregoire of Fairfield, Anthony of Barre City,
3 Boyden of Cambridge, Campbell of St. Johnsbury, Christie of
4 Hartford, Cole of Hartford, Dodge of Essex, Garofano of Essex,
5 Hango of Berkshire, Harrison of Chittenden, Howard of
6 Rutland City, Labor of Morgan, LaBounty of Lyndon, Masland
7 of Thetford, Noyes of Wolcott, Sibilia of Dover, Stebbins of
8 Burlington, Templeman of Brownington, and Williams of
9 Granby
10 Referred to Committee on
11 Date:
12 Subject: Tobacco products; tobacco substitutes; directory
13 Statement of purpose of bill as introduced: This bill proposes to establish a
14 directory of tobacco substitutes, often referred to as e-cigarettes, that are
15 allowed to be sold in this State.
16 An act relating to establishing a tobacco substitute directory VT LEG #373158 v.1
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1 It is hereby enacted by the General Assembly of the State of Vermont:
2 Sec. 1. 7 V.S.A. chapter 40 is amended to read:
3 CHAPTER 40. TOBACCO PRODUCTS
4 Subchapter 1. Licenses; Purchase and Sale
5 § 1001. DEFINITIONS
6 ***
7 Subchapter 2. Directory of Tobacco Substitutes
8 § 1031. CERTIFICATIONS
9 (a)(1) Each manufacturer of tobacco substitutes that are sold in this State,
10 whether directly or through a distributor, wholesaler, retailer, or similar
11 intermediary or intermediaries, shall certify under penalty of perjury on a form
12 and in the manner prescribed by the Division of Liquor Control in the
13 Department of Liquor and Lottery, not later than August 1 annually, that the
14 manufacturer agrees to comply with this subchapter and that either:
15 (A) the manufacturer has received a marketing authorization or
16 similar order for the tobacco substitute from the U.S. Food and Drug
17 Administration pursuant to 21 U.S.C. § 387j; or
18 (B) the tobacco substitute was marketed in the United States as of
19 August 8, 2016, the manufacturer submitted a premarket tobacco product
20 application for the tobacco substitute to the U.S. Food and Drug
21 Administration pursuant to 21 U.S.C. § 387j on or before September 9, 2020,
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1 and the application either remains under investigation by the U.S. Food and
2 Drug Administration or a final decision on the application has not otherwise
3 taken effect.
4 (2) A manufacturer shall provide a separate certification form for each
5 tobacco substitute that is sold in this State.
6 (b) Each annual certification form required by subsection (a) of this section
7 shall be accompanied by:
8 (1) a copy of the marketing authorization or other order for the tobacco
9 substituted issued by the U.S. Food and Drug Administration pursuant to 21
10 U.S.C. § 387j, or evidence that the premarket tobacco product application for
11 the tobacco substitute was submitted to the U.S. Food and Drug
12 Administration and a final authorization or order has not yet taken effect; and
13 (2) a payment of $250.00 for each tobacco substitute the first time a
14 manufacturer submits a certification form for that tobacco substitute and a
15 payment of $200.00 annually thereafter for each tobacco substitute.
16 (c) A manufacturer required to submit a certification form pursuant to
17 subsection (a) of this section shall notify the Division of Liquor Control within
18 30 days following any material change affecting the information on the
19 certification form, including the issuance or denial of a marketing authorization
20 or other order by the U.S. Food and Drug Administration pursuant to 21 U.S.C.
21 § 387j or any other order or action by the U.S. Food and Drug Administration VT LEG #373158 v.1
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1 or a federal court that affects the ability of the tobacco substitute to be
2 introduced or delivered into interstate commerce for commercial distribution in
3 the United States.
4 § 1032. DIRECTORY OF TOBACCO SUBSTITUTES AND
5 MANUFACTURERS
6 (a) The Division of Liquor Control shall maintain and make publicly
7 available on the Division’s website a directory that lists all tobacco substitute
8 manufacturers and tobacco substitutes for which certification forms have been
9 submitted and shall update the directory at least monthly to ensure its accuracy.
10 (b) The Division of Liquor Control shall provide a manufacturer with
11 notice and an opportunity to cure any deficiencies before removing the
12 manufacturer or its product or products from the directory.
13 (1) The Division of Liquor Control shall not remove a manufacturer or
14 its product or products from the directory until at least 15 business days after
15 the manufacturer has been given notice of the Division’s intended action.
16 Notice shall be sufficient and shall be deemed immediately received by a
17 manufacturer if the notice is sent either electronically or by facsimile to an e-
18 mail address or facsimile number, as applicable, provided by the manufacturer
19 in its most recent certification filed pursuant to subsection 1031(a) of this
20 chapter.
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1 (2) The tobacco substitute manufacturer shall have 15 business days
2 from the date of service of the notice of the Division’s intended action to
3 establish that the manufacturer or its products, or both, should be maintained in
4 the directory.
5 (c) If a product is removed from the directory, each retailer, distributor, and
6 wholesaler shall have 21 days from the date the product is removed from the
7 directory to remove the product from its inventory and return the product to the
8 manufacturer for disposal. After 21 days following removal from the
9 directory, the tobacco substitutes identified in the notice of removal are
10 contraband and shall not be purchased or sold in this State. The cost of
11 returning the products to the manufacturer shall be borne by the person who
12 offered or held the products for sale.
13 (d) Beginning on October 1, 2024 or on the date that the Division of Liquor
14 Control first makes the directory available for public inspection on its website,
15 whichever is later:
16 (1) a person shall not sell or offer for sale in this State a tobacco
17 substitute that is not included in the directory described in this section; and
18 (2) a tobacco substitute manufacturer shall not sell, either directly or
19 through a distributor or wholesaler, retailer, or similar intermediary or
20 intermediaries, a tobacco substitute in this State that is not included in the
21 directory described in this section.
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1 § 1033. PENALTIES
2 (a)(1) A retailer, distributor, or wholesaler that sells or offers for sale in this
3 State a tobacco substitute that is not included in the directory described in
4 section 1032 of this chapter shall be subject to a civil penalty of $500.00 per
5 day for each product offered for sale in violation of this subchapter until the
6 offending product is removed from the market or is properly listed in the
7 directory.
8 (2) In addition to the civil penalty set forth in subdivision (1) of this
9 subsection:
10 (A) for a second violation within a 12-month period, the license of
11 the licensee shall be suspended for at least 30 days;
12 (B) for a third violation within a 12-month period, the license of the
13 licensee shall be suspended for at least 90 days; and
14 (C) for a fourth or subsequent violation within a 12-month period, the
15 license of the licensee shall be suspended for at least one year.
16 (b) A tobacco substitute manufacturer whose tobacco substitutes are not
17 listed in the directory and are sold in this State, whether directly or through a
18 distributor or wholesaler, retailer, or similar intermediary or intermediaries,
19 shall be subject to a civil penalty of $500.00 per day for each product offered
20 for sale in violation of this subchapter until the offending product is removed
21 from the market or is properly listed in the directory. In addition, any VT LEG #373158 v.1
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1 manufacturer that falsely represents any of the information required by section
2 1031 of this chapter shall be imprisoned not more than two years or fined not
3 more than $10,000.00, or both.
4 (c) A person who violates any provision of this subchapter commits an
5 unfair and deceptive act in commerce in violation of the Consumer Protection
6 Act, 9 V.S.A. chapter 63.
7 § 1034. ENFORCEMENT; APPEALS
8 (a) To enforce the provisions of this subchapter, the Division of Liquor
9 Control and its agents, including State and local law enforcement officers, may
10 examine the books, papers, invoices, and other records of any person in
11 possession, control, or occupancy of any premises on which tobacco
12 substitutes are placed, stored, sold, or offered for sale, as well as the stock of
13 tobacco substitutes on the premises. Every person in possession, control, or
14 occupancy of any premises on which tobacco substitutes are placed, stored,
15 sold, or offered for sale shall give the Division of Liquor Control and its
16 agents, including State and local law enforcement officers, the means,
17 facilities, and opportunity for the examinations authorized by this section.
18 (b) Each retailer, distributor, or wholesaler that sells or distributes tobacco
19 substitutes in this State shall be subject to at least two unannounced
20 compliance checks annually for purposes of enforcing this section.
21 Unannounced follow-up compliance checks of all noncompliant retailers,
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1 distributors, and wholesalers shall be conducted within 30 days following any
2 violation of this subchapter. The Division of Liquor Control shall publish the
3 results of all compliance checks at least annually on its website and shall make
4 the results available to the public upon request.
5 (c)(1) Any nonresident or foreign manufacturer of tobacco substitutes that
6 has not registered to do business in this State as a foreign corporation or other
7 business entity shall, as a condition precedent to having its products included
8 or retained in the directory established pursuant to section 1032 of this chapter,
9 appoint and continually engage without interruption the services of an agent in
10 this State to act as agent for the service of process on whom all process, and
11 any action or proceeding against the manufacturer concerning or arising out of
12 enforcement of this subchapter, may be served in any manner authorized by
13 law. Such service shall constitute legal and valid service of process on the
14 manufacturer. The manufacturer shall provide the name, address, telephone
15 number, and satisfactory proof of the appointment and availability of the agent
16 to the Division of Liquor Control. The Secretary of State shall be designated
17 as agent for service of process for importers of manufacturers located outside
18 the United States. Service shall be made upon the Secretary of State in
19 accordance with the provisions of 12 V.S.A. §§ 851 and 852.
20 (2) A manufacturer shall provide notice to the Division of Liquor
21 Control 30 days prior to termination of the authority of an agent and shall VT LEG #373158 v.1
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1 further provide proof to the satisfaction of the Division of Liquor Control of
2 the appointment of a new agent not fewer than five days prior to the
3 termination of an existing agent appointment. In the event an agent terminates
4 an agent appointment, the manufacturer shall notify the Division of the
5 termination within five calendar days and shall include proof to the Division’s
6 satisfaction of appointment of a new agent.
7 (3) Any manufacturer whose products are sold in this State who has not
8 appointed and engaged an agent as required by this subsection shall be deemed
9 to have appointed the Secretary of State as the manufacturer’s agent and may
10 be proceeded against in courts of this State by service of process upon on the
11 Secretary of State; provided, however, that the appointment of the Secretary of
12 State as the manufacturer’s agent shall not satisfy the condition precedent, as
13 set forth in subdivision (1) of this subsection, for having the manufacturer’s
14 products included or retained in the directory.
15 (d) A determination by the Division of Liquor Control not to include or to
16 remove from the directory a manufacturer or a product is a final agency
17 decision with the same status as an agency decision or order in a contested case
18 under the Vermont Administrative Procedure Act. A tobacco substitute
19 manufacturer aggrieved by a determination of the Division of Liquor Control
20 under this subchapter may appeal to the Superior Court of Washington County,
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1 which shall review the matter pursuant to 3 V.S.A. § 815. An appeal under
2 this subsection may include a request for declaratory or injunctive relief.
3 (e) All fees and penalties collected by the Division of Liquor Control
4 pursuant to this subchapter shall be deposited into the Liquor Control
5 Enterprise Fund and used to administer and enforce this subchapter.
6 § 1035. REPORTING REQUIREMENT; RULEMAKING
7 (a) Annually, on or before January 31, the Division of Liquor Control shall
8 submit a report to the General Assembly regarding the status of the directory,
9 the manufacturers and products included in the directory, revenue and
10 expenses related to the administration of this subchapter, and enforcement
11 activities undertaken pursuant to this subchapter.
12 (b) The Board of Liquor and Lottery may adopt rules in accordance with
13 3 V.S.A. chapter 25 to carry out the purposes of this subchapter.
14 Sec. 2. EFFECTIVE DATE
15 This act shall take effect on July 1, 2024 and shall apply as follows:
16 (1) tobacco substitute manufacturers shall submit their first annual
17 certifications under 7 V.S.A. § 1031 on or before August 1, 2024;
18 (2) the Division of Liquor Control shall post the first directory on its
19 website pursuant to 7 V.S.A. § 1032 on October 1, 2024; and
20 (3) the Division of Liquor Control shall submit its first annual report
21 pursuant to 7 V.S.A. § 1035 on or before January 31, 2025.
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Statutes affected: As Introduced: 7-40