Bill Summary – FastDemocracy

Enrolled Copy                                                                           S.B. 37
                  ELECTRONIC CIGARETTE AND OTHER NICOTINE
                                   PRODUCT AMENDMENTS
                                       2020 GENERAL SESSION
                                           STATE OF UTAH
                             Chief Sponsor: Allen M. Christensen
                                     House Sponsor: Paul Ray
 Cosponsors:                          Jani Iwamoto Scott D. Sandall
 David G. Buxton Derek L. Kitchen Jerry W. Stevenson
 Luz Escamilla Karen Mayne Ronald Winterton
 Keith Grover Ann Millner
 Wayne A. Harper Ralph Okerlund
 Lyle W. Hillyard Kathleen Riebe
13
 LONG TITLE
 General Description:
        This bill enacts and amends provisions relating to electronic cigarette products and
 nicotine products.
 Highlighted Provisions:
        This bill:
        < defines and coordinates terms;
        < increases the minimum age for obtaining, possessing, using, providing, or
 furnishing of tobacco products, paraphernalia, and under certain circumstances,
 electronic cigarettes and nicotine products to 21 years old;
        < imposes permitting requirements and processes for the sale of a nicotine product;
        < requires a tobacco retailer to provide itemized receipts and to maintain an itemized
 transaction log for sales of a tobacco product, an electronic cigarette product, or a
 nicotine product;
        < establishes a Youth Electronic Cigarette, Marijuana, and Other Drug Prevention
       S.B. 37                                                                           Enrolled Copy
 Program within the Department of Health;
        < creates a committee to advise the department on the Youth Electronic Cigarette,
 Marijuana, and Other Drug Prevention Program;
        < creates the Electronic Cigarette, Marijuana, and Other Drug Prevention Grant
 Program operated by local health departments;
        < specifies requirements relating to the Electronic Cigarette, Marijuana, and Other
 Drug Prevention Grant Program;
        < applies civil penalties to the improper sale of a nicotine product;
        < requires certain nicotine products to have a statement on the products' exterior
 packages that the products contain nicotine;
        < creates a reduction on certain tax rates for products that are issued a modified risk
 tobacco product order by the United States Food and Drug Administration;
        < imposes licensing and bonding requirements on a person that sells or distributes an
 electronic cigarette product or a nicotine product;
        < imposes an excise tax on the sale in the state of an electronic cigarette substance, a
 prefilled electronic cigarette, an alternative nicotine product, a nontherapeutic
 nicotine device substance, and a prefilled nontherapeutic nicotine device;
        < provides for the remittance of the tax collected;
        < creates the Electronic Cigarette Substance and Nicotine Product Tax Restricted
 Account;
        < addresses use of revenue from the taxation of an electronic cigarette substance, a
 prefilled electronic cigarette, an alternative nicotine product, a nontherapeutic
 nicotine device substance, and a prefilled nontherapeutic nicotine device;
        < provides criminal penalties for a sale or a purchase of an electronic cigarette product
 or a nicotine product in violation of the law;
        < prohibits a manufacturer, a wholesaler, or a retailer from providing certain discounts
 or giveaways for electronic cigarettes; and
        < makes technical and conforming changes.
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      Enrolled Copy                                                                     S.B. 37
 Money Appropriated in this Bill:
       None
 Other Special Clauses:
       This bill provides a special effective date.
 Utah Code Sections Affected:
 AMENDS:
       10-8-41.6, as last amended by Laws of Utah 2018, Chapter 231
       10-8-47 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
       17-50-333, as last amended by Laws of Utah 2018, Chapter 231
       26-1-7, as last amended by Laws of Utah 2017, Chapter 419
       26-38-2, as last amended by Laws of Utah 2018, Chapters 231 and 281
       26-57-101, as enacted by Laws of Utah 2015, Chapter 132
       26-57-102, as enacted by Laws of Utah 2015, Chapter 132
       26-62-101, as enacted by Laws of Utah 2018, Chapter 231
       26-62-102, as renumbered and amended by Laws of Utah 2018, Chapter 231
       26-62-201, as enacted by Laws of Utah 2018, Chapter 231
       26-62-202, as last amended by Laws of Utah 2019, Chapter 157
       26-62-205 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
       26-62-301, as enacted by Laws of Utah 2018, Chapter 231
       26-62-304 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
       26-62-305 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
       26-62-306, as renumbered and amended by Laws of Utah 2018, Chapter 231
       26A-1-128, as enacted by Laws of Utah 2018, Chapter 231
       51-9-203 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapters 136
 and 232
       53-3-229, as last amended by Laws of Utah 2010, Chapters 114 and 276
       53-3-810, as last amended by Laws of Utah 2010, Chapters 114 and 276
       53G-4-402, as last amended by Laws of Utah 2019, Chapters 83, 293, and 451
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       S.B. 37                                                                   Enrolled Copy
        53G-8-209, as last amended by Laws of Utah 2019, Chapter 293
        59-14-102, as last amended by Laws of Utah 2013, Chapter 148
        59-14-302, as last amended by Laws of Utah 2014, Chapter 189
        59-14-703 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
        59-14-801, as enacted by Laws of Utah 2015, Chapter 132
        59-14-802, as last amended by Laws of Utah 2019, Chapter 136
        59-14-803, as last amended by Laws of Utah 2018, Chapter 231
        63I-1-226, as last amended by Laws of Utah 2019, Chapters 67, 136, 246, 289, 455 and
 last amended by Coordination Clause, Laws of Utah 2019, Chapter 246
        76-8-311.3, as last amended by Laws of Utah 2010, Chapter 114
        76-10-101, as last amended by Laws of Utah 2015, Chapters 66, 132 and last amended
 by Coordination Clause, Laws of Utah 2015, Chapter 132
        76-10-103 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
        76-10-104 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
        76-10-104.1 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
        76-10-105 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
        76-10-105.1 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
        76-10-111, as last amended by Laws of Utah 2010, Chapter 114
        77-39-101 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapter 232
 ENACTS:
        26-7-10, Utah Code Annotated 1953
        26-57-104, Utah Code Annotated 1953
        26-62-206, Utah Code Annotated 1953
        26A-1-129, Utah Code Annotated 1953
        59-14-104, Utah Code Annotated 1953
        59-14-804, Utah Code Annotated 1953
        59-14-805, Utah Code Annotated 1953
        59-14-806, Utah Code Annotated 1953
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        Enrolled Copy                                                                             S.B. 37
        59-14-807, Utah Code Annotated 1953
        59-14-808, Utah Code Annotated 1953
115
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 10-8-41.6 is amended to read:
        10-8-41.6. Regulation of retail tobacco specialty business.
        (1) As used in this section:
        (a) "Community location" means:
        (i) a public or private kindergarten, elementary, middle, junior high, or high school;
        (ii) a licensed child-care facility or preschool;
        (iii) a trade or technical school;
        (iv) a church;
        (v) a public library;
        (vi) a public playground;
        (vii) a public park;
        (viii) a youth center or other space used primarily for youth oriented activities;
        (ix) a public recreational facility;
        (x) a public arcade; or
        (xi) for a new license issued on or after July 1, 2018, a homeless shelter.
        (b) "Department" means the Department of Health, created in Section 26-1-4.
        (c) "Electronic cigarette product" means the same as that term is defined in Section
 76-10-101.
        (d) "Licensee" means a person licensed under this section to conduct business as a
 retail tobacco specialty business.
        [(c)] (e) "Local health department" means the same as that term is defined in Section
 26A-1-102.
        (f) "Nicotine product" means the same as that term is defined in Section 76-10-101.
        [(d) "Permittee" means a person licensed under this section to conduct business as a
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        S.B. 37                                                                           Enrolled Copy
 retail tobacco specialty business.]
          [(e)] (g) "Retail tobacco specialty business" means a commercial establishment in
 which:
          (i) [the sale of tobacco products accounts] sales of tobacco products, electronic
 cigarette products, and nicotine products account for more than 35% of the total quarterly gross
 receipts for the establishment;
          (ii) 20% or more of the public retail floor space is allocated to the offer, display, or
 storage of tobacco products, electronic cigarette products, or nicotine products;
          (iii) 20% or more of the total shelf space is allocated to the offer, display, or storage of
 tobacco products, electronic cigarette products, or nicotine products; or
          (iv) the retail space features a self-service display for tobacco products, electronic
 cigarette products, or nicotine products.
          [(f)] (h) "Self-service display" means the same as that term is defined in Section
 76-10-105.1.
          [(g)] (i) "Tobacco product" means:
          (i) a tobacco product as defined in Section 76-10-101; or
          (ii) tobacco paraphernalia as defined in Section 76-10-101.
          [(i) any cigar, cigarette, or electronic cigarette, as those terms are defined in Section
 76-10-101;]
          [(ii) a tobacco product, as that term is defined in Section 59-14-102, including:]
          [(A) chewing tobacco; or]
          [(B) any substitute for a tobacco product, including flavoring or additives to tobacco;
 and]
          [(iii) tobacco paraphernalia, as that term is defined in Section 76-10-104.1.]
          (2) The regulation of a retail tobacco specialty business is an exercise of the police
 powers of the state, and through delegation, to other governmental entities.
          (3) (a) A person may not operate a retail tobacco specialty business in a municipality
 unless the person obtains a license from the municipality in which the retail tobacco specialty
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        Enrolled Copy                                                                                S.B. 37
 business is located.
        (b) A municipality may only issue a retail tobacco specialty business license to a
 person if the person complies with the provisions of Subsections (4) and (5).
        (4) (a) Except as provided in Subsection (7), a municipality may not issue a license for
 a person to conduct business as a retail tobacco specialty business if the retail tobacco specialty
 business is located within:
        (i) 1,000 feet of a community location;
        (ii) 600 feet of another retail tobacco specialty business; or
        (iii) 600 feet from property used or zoned for:
        (A) agriculture use; or
        (B) residential use.
        (b) For purposes of Subsection (4)(a), the proximity requirements shall be measured in
 a straight line from the nearest entrance of the retail tobacco specialty business to the nearest
 property boundary of a location described in Subsections (4)(a)(i) through (iii), without regard
 to intervening structures or zoning districts.
        (5) [(a) Except as provided in Subsection (5)(b), beginning July 1, 2018, a] A
 municipality may not issue or renew a license for a person to conduct business as a retail
 tobacco specialty business until the person provides the municipality with proof that the retail
 tobacco specialty business has:
        [(i)] (a) a valid permit for a retail tobacco specialty business issued under Title 26,
 Chapter 62, Tobacco, Electronic Cigarette, and Nicotine Product Retail Permit, by the local
 health department having jurisdiction over the area in which the retail tobacco specialty
 business is located; and
        [(ii)] (b) (i) for a retailer that sells a tobacco product, a valid license issued by the State
 Tax Commission in accordance with Section 59-14-201 or 59-14-301 to sell [tobacco products
 from the State Tax Commission.] a tobacco product; and
        (ii) for a retailer that sells an electronic cigarette product or a nicotine product, a valid
 license issued by the State Tax Commission in accordance with Section 59-14-803 to sell an
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        S.B. 37                                                                            Enrolled Copy
 electronic cigarette product or a nicotine product.
         [(b) A person that was licensed to conduct business as a retail tobacco specialty
 business in a municipality before July 1, 2018, shall obtain a permit from a local health
 department under Title 26, Chapter 62, Tobacco Retail Permit, on or before January 1, 2019.]
         (6) (a) Nothing in this section:
         (i) requires a municipality to issue a retail tobacco specialty business license; or
         (ii) prohibits a municipality from adopting more restrictive requirements on a person
 seeking a license or renewal of a license to conduct business as a retail tobacco specialty
 business.
         (b) A municipality may suspend or revoke a retail tobacco specialty business license
 issued under this section:
         (i) if a licensee engages in a pattern of unlawful activity under Title 76, Chapter 10,
 Part 16, Pattern of Unlawful Activity Act;
         (ii) if a licensee violates the regulations restricting the sale and distribution of
 cigarettes and smokeless tobacco to protect children and adolescents issued by the United
 States Food and Drug Administration, 21 C.F.R. Part 1140;
         (iii) upon the recommendation of the department or a local health department under
 Title 26, Chapter 62, Tobacco, Electronic Cigarette, and Nicotine Product Retail Permit; or
         (iv) under any other provision of state law or local ordinance.
         (7) (a) In accordance with Subsection (7)(b), a retail tobacco specialty business that has
 a retail tobacco specialty business license and is operating in a municipality in accordance with
 all applicable laws except for the requirement in Subsection (4), on or before December 31,
 2015, is exempt from Subsection (4).
         (b) A retail tobacco specialty business may maintain an exemption under Subsection
 (7)(a) if:
         (i) the retail tobacco specialty business license is renewed continuously without lapse
 or permanent revocation;
         (ii) the retail tobacco specialty business does not close for business or otherwise
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        Enrolled Copy                                                                                S.B. 37
 suspend the sale of tobacco products, electronic cigarette products, or nicotine products for
 more than 60 consecutive days;
        (iii) the retail tobacco specialty business does not substantially change the business
 premises or business operation; and
        (iv) the retail tobacco specialty business maintains the right to operate under the terms
 of other applicable laws, including:
        (A) Title 26, Chapter 38, Utah Indoor Clean Air Act;
        (B) zoning ordinances;
        (C) building codes; and
        (D) the requirements of a retail tobacco specialty business license issued before
 December 31, 2015.
        Section 2. Section 10-8-47 (Effective 07/01/20) is amended to read:
        10-8-47 (Effective 07/01/20). Intoxication -- Fights -- Disorderly conduct --
 Assault and battery -- Petit larceny -- Riots and disorderly assemblies -- Firearms and
 fireworks -- False pretenses and embezzlement -- Sale of liquor, narcotics, tobacco
 products, electronic cigarette products, or nicotine products to minors -- Possession of
 controlled substances -- Treatment of alcoholics and narcotics or drug addicts.
        (1) A municipal legislative body may:
        (a) prevent intoxication, fighting, quarreling, dog fights, cockfights, prize fights,
 bullfights, and all disorderly conduct and provide against and punish the offenses of