Senate File 226 - Introduced
SENATE FILE 226
BY COMMITTEE ON COMMERCE
(SUCCESSOR TO SF 43)
A BILL FOR
1 An Act relating to the regulation of certain tobacco and
2 hemp-related products, and providing penalties.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 DIVISION I
2 REGULATION OF DEVICE RETAILERS
3 Section 1. NEW SECTION. 453E.1 Definitions.
4 As used in this chapter, unless the context otherwise
5 requires:
6 1. “Business” means any trade, occupation, activity,
7 or enterprise engaged in for the purpose of selling or
8 distributing tobacco products and devices in this state.
9 2. “Consumer” means any person who has title to or
10 possession of devices in storage, for use or other consumption
11 in this state.
12 3. “Controlled substance” means controlled substance as
13 defined in section 124.101.
14 4. “Delivery sale” means any sale of a device to a purchaser
15 in this state where the purchaser submits the order for
16 such sale by means of a telephonic or other method of voice
17 transmission, mail or any other delivery service, or the
18 internet or other online service and the device is delivered by
19 use of mail or a delivery service. The sale of a device shall
20 constitute a delivery sale regardless of whether the seller is
21 located in this state. “Delivery sale” does not include a sale
22 to a distributor or retailer of a device not for personal use.
23 5. “Department” means the department of revenue.
24 a. “Device” means any equipment or product, made in whole
25 or in part of glass or metal, that is intended or designed for
26 use in manufacturing, compounding, converting, concealing,
27 producing, processing, preparing, injecting, ingesting,
28 inhaling, or otherwise introducing into the human body a
29 controlled substance. “Device” does not include a vapor
30 product.
31 b. In determining whether any particular item constitutes a
32 “device”, the following factors may be considered:
33 (1) The instructions, oral or written, provided with the
34 item concerning its use.
35 (2) Any descriptive materials accompanying the item which
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1 explain or depict its use.
2 (3) National and local advertising concerning the item’s
3 use.
4 (4) The manner in which the item is displayed for sale.
5 (5) Whether the owner of the place of business, or anyone in
6 control of the item at the place of business, is a legitimate
7 supplier of like or related items to the community, such as a
8 licensed distributor, manufacturer, or subjobber.
9 (6) Direct or circumstantial evidence of the ratio of sales
10 of the item to the total sales of the place of business.
11 (7) The existence and scope of legitimate uses of the item
12 in the community.
13 (8) Expert testimony concerning the item’s use.
14 c. A particular item may constitute a device notwithstanding
15 any lawful use of the item.
16 7. “Device retailer” means a person engaged in the retail
17 sale of tangible personal property who is also engaged in
18 selling devices to the ultimate consumer.
19 8. “Director” means the director of revenue.
20 9. “Distributor” means the same as defined in section
21 453A.42.
22 10. “Manufacturer” means the same as defined in section
23 453A.42.
24 11. “Place of business” means any place where tobacco
25 products and devices are sold, stored, or kept for the purpose
26 of sale or consumption; or for a business within or without the
27 state that conducts delivery sales, any place where tobacco
28 products and devices are sold or are kept for the purpose of
29 sale, including delivery sales.
30 12. “Retail outlet” means each place of business from which
31 tobacco products and devices are sold to consumers.
32 13. “Sale” means any transfer, exchange, or barter, in
33 any manner or by any means whatsoever, for consideration, and
34 includes and means all sales made by any person.
35 14. “Subjobber” means the same as defined in section
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1 453A.42.
2 15. “Tobacco products” means cigars; little cigars;
3 cheroots; stogies; periques; granulated, plug cut, crimp cut,
4 ready rubbed, and other smoking tobacco; snuff; cavendish;
5 plug and twist tobacco; fine-cut and other chewing tobaccos;
6 shorts; refuse scraps, clippings, cuttings and sweepings of
7 tobacco, and other kinds and forms of tobacco, prepared in
8 such manner as to be suitable for chewing or smoking in a pipe
9 or otherwise, or both for chewing and smoking; but shall not
10 include cigarettes as defined in section 453A.1.
11 16. “Tobacco retailer” means a retailer as defined in
12 section 453A.42.
13 17. “Use” means the exercise of any right or power
14 incidental to the ownership of tobacco products or devices.
15 18. “Vapor product” means the same as defined in section
16 453A.1.
17 Sec. 2. NEW SECTION. 453E.2 Administration —— rules ——
18 intent.
19 1. The director shall administer this chapter. The director
20 shall collect, supervise, and enforce the collection of all
21 fees, taxes, and civil penalties imposed under this chapter.
22 2. The director may adopt rules pursuant to chapter 17A that
23 are necessary to enforce this chapter.
24 3. The director may designate employees to administer
25 and enforce the provisions of this chapter, including the
26 collection of all taxes provided for in this chapter. In the
27 enforcement, the director may request aid from the attorney
28 general, the special agents of the state, any county attorney,
29 or any peace officer. The director may appoint clerks and
30 additional help as may be needed to administer this chapter.
31 4. This chapter or the holding of a device retailer permit
32 or a device delivery sale permit under this chapter shall not
33 be construed to provide for any of the following:
34 a. Immunity from prosecution or the limitation of the
35 application of other state law and regulations governing
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1 tobacco products, drug paraphernalia, or controlled substances.
2 b. Authorization for the possession, marketing, offering
3 for sale, or selling of a device, the possession, marketing,
4 offering for sale, or selling of which is otherwise prohibited
5 by state or federal law.
6 Sec. 3. NEW SECTION. 453E.3 Device retailers —— permits ——
7 fees.
8 1. Permits required. A person shall not engage in the
9 business of a device retailer at any place of business or
10 through delivery sales, unless the person complies with all of
11 the following:
12 a. The person has received and holds a permit as a tobacco
13 retailer pursuant to section 453A.47A that has not been
14 suspended or revoked and is not expired; complies with the
15 provisions of chapter 453A applicable to a tobacco retailer;
16 and sells tobacco products in addition to devices at the retail
17 outlet or through delivery sales.
18 b. The person has received and holds a permit as a device
19 retailer pursuant to this section that has not been suspended
20 or revoked and is not expired, and complies with the provisions
21 of this chapter.
22 2. No sales without device retailer permit. A device
23 retailer shall not sell devices until an application has been
24 filed and the fee prescribed paid for a permit and until such
25 permit is obtained and only while such permit is not suspended,
26 revoked, or expired.
27 3. Number of device retailer permits. An application shall
28 be filed and a permit obtained for each place of business
29 owned or operated by a device retailer located in the state.
30 If an out-of-state device retailer makes delivery sales of
31 devices, an application shall be filed with the department and
32 a permit shall be issued for the out-of-state device retailer’s
33 principal place of business.
34 4. Issuance. Cities may issue device retailer permits
35 to device retailers located within their respective limits.
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1 County boards of supervisors may issue device retailer permits
2 to device retailers located in their respective counties,
3 outside of the corporate limits of cities. The city or county
4 shall submit a duplicate of any application for a device
5 retailer permit to the alcoholic beverages division of the
6 department of commerce within thirty days of issuance of a
7 device retailer permit. The alcoholic beverages division of
8 the department of commerce shall submit the current list of
9 all device retailer permits issued to the department of public
10 health by the last day of each quarter of a state fiscal year.
11 5. Fees —— expiration. All device retailer permits provided
12 for in this section shall expire on June 30 of each year. A
13 device retailer permit shall not be granted or issued until the
14 applicant has paid the fees provided for in this section for
15 the period ending June 30 next, to the city or county granting
16 the device retailer permit. The fee for a device retailer
17 permit is one thousand five hundred dollars.
18 6. Application. Device retailer permits shall be issued
19 only upon application, accompanied by the one thousand five
20 hundred dollar fee, made upon forms furnished by the department
21 upon written request. The failure to furnish such forms
22 shall be no excuse for the failure to file the form unless
23 absolute refusal is shown. The forms shall specify all of the
24 following:
25 a. The manner under which the device retailer transacts or
26 intends to transact business as a device retailer.
27 b. The principal office, residence, and place of business,
28 to which the device retailer permit is to apply.
29 c. If the applicant is not an individual, the names of the
30 partners if the applicant is a partnership or the names of
31 the principal officers or members if the applicant is a legal
32 entity, and their addresses.
33 d. Such other information as the director shall by rule
34 prescribe.
35 7. Records and reports of device retailers.
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1 a. The director shall prescribe the forms necessary for
2 the efficient administration of this section and may require
3 uniform books and records to be used and kept by each device
4 retailer or other person as deemed necessary.
5 b. Every device retailer shall, when requested by the
6 department, make additional reports as the department deems
7 necessary and proper and shall at the request of the department
8 furnish full and complete information pertaining to any
9 transaction of the device retailer involving the purchase or
10 sale of devices, including the number of devices sold.
11 8. Requirements for sale.
12 a. A device retailer shall not sell, give, or otherwise
13 supply a device to any person under twenty-one years of age and
14 must verify the age of all purchasers of devices. If a device
15 is purchased at a retail outlet, valid proof of the purchaser’s
16 identity and age shall be obtained at the time the device is
17 supplied to the purchaser. If a device is purchased through a
18 delivery sale, valid proof of the purchaser’s identity and age
19 shall be obtained in accordance with section 453E.4.
20 b. A device retailer shall only display and sell devices
21 in a location of a retail outlet where the device retailer
22 ensures that the devices are not visible to a person younger
23 than twenty-one years of age and where no person younger than
24 twenty-one years of age is present or permitted to enter at any
25 time.
26 Sec. 4. NEW SECTION. 453E.4 Delivery sale of devices ——
27 permit —— requirements.
28 1. a. A person shall not mail, ship, or otherwise cause
29 to be delivered any device in connection with a delivery sale
30 to any other person within this state unless the person has
31 applied for and holds a device delivery sale permit as provided
32 in this section.
33 b. A person applying for a device delivery sale permit shall
34 submit an application for the permit electronically, or in a
35 manner prescribed by the director.
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1 c. An application submitted pursuant to paragraph “b” shall
2 be accompanied by a permit fee in the amount of one thousand
3 five hundred dollars.
4 d. The director may in accordance with this section issue a
5 device delivery sale permit which shall be valid for one year
6 from the date of issuance unless it is sooner suspended or
7 revoked for a violation of this section.
8 e. A permit issued pursuant to this section may be renewed
9 annually by submitting a renewal application in a manner
10 prescribed by the director, accompanied by the one thousand
11 five hundred dollar permit fee.
12 2. The delivery sale of devices pursuant to this
13 section shall be subject to the following requirements and
14 restrictions:
15 a. All devices delivered by delivery sale directly to a
16 resident of this state shall be sold only by a device delivery
17 sale permit holder.
18 b. A device delivery sale permit holder shall only deliver
19 devices by delivery sale to a resident of this state who is at
20 least twenty-one years of age for the resident’s personal use
21 and not for resale.
22 c. All devices delivered by delivery sale directly to a
23 resident of this state shall be conspicuously labeled with the
24 words “CONTAINS DEVICE: SIGNATURE OF PERSON AGE 21 OR OLDER
25 REQUIRED FOR DELIVERY” or shall be conspicuously labeled with
26 alternative wording preapproved by the director.
27 d. A device delivery sale permit holder shall obtain
28 valid proof of identity and age prior to delivery, and shall
29 obtain the signature of a person age twenty-one or older as a
30 condition of delivery.
31 e. A device delivery sale permit holder shall maintain
32 records of devices delivered which include the name of the
33 device manufacturer, quantity of devices delivered, recipient’s
34 name and address and verification of age on an electronic or
35 paper form of signature from the recipient of the device, and
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1 sales and excise taxes paid. Records shall be submitted to
2 the director on a monthly basis in a form and manner to be
3 determined by the director. Records shall be maintained for at
4 least five years.
5 3. A device delivery sale permit holder shall remit to the
6 director an amount equivalent to the applicable sales tax and
7 excise tax on devices subject to delivery sale at the rates
8 specified in section 423.2 and section 453E.5, as applicable.
9 The amount shall be remitted at the time and in the manner
10 provided in section 453E.5.
11 4. A device delivery sale permit holder shall be deemed to
12 have consented to the jurisdiction of the director or any other
13 agency or court in this state concerning enforcement of this
14 section and any related laws, rules, or regulations. A device
15 delivery sale permit holder shall allow the director to perform
16 an audit of records of devices upon request.
17 Sec. 5. NEW SECTION. 453E.5 Sales and use tax on sales and
18 delivery sales of devices —— examination of records and premises
19 —— subpoena for witnesses and papers.
20 1. A sale or delivery sale of a device within this state
21 shall be subject to the sales tax provided in chapter 423,
22 subchapter II. All the provisions for the lien of the tax, its
23 collection, and all actions as provided in the uniform sales
24 and use tax administration Act, chapter 423, shall apply to the
25 tax imposed in this chapter.
26 2. There is levied and imposed an excise tax on a device
27 purchased in this state through a sale or purchased for use
28 in this state through a delivery sale of forty percent of the
29 purchase price of the device.
30 3. A device delivery sale permit holder shall be deemed to
31 have waived all claims that such permit holder lacks physical
32 presence within this state for purposes of collecting and
33 remitting the sales and excise taxes.
34 4. A device delivery sale