Nicotine Product Regulation

Sections 1 through 8 of the act raise the minimum age of a person to whom cigarettes, tobacco products, and nicotine products (products) may be sold from 18 years of age to 21 years of age. A products retailer must card anyone seeking to purchase products who appears to be under 50 years of age at the time of purchase.

Section 1 repeals criminal penalties against a minor for purchasing or attempting to purchase a product.

Section 7 prohibits a retailer from permitting a person under 18 years of age to sell or participate in the sale of products.

Section 8 also:

• Increases the minimum number of compliance checks required of each retail location at which the products are sold to 2 per year or at least the minimum number annually required by federal regulation, whichever number is greater; and
• Requires the executive director of the department of revenue (executive director) to adopt rules concerning enforcement of the laws governing the regulation of products, including rules:
• Regarding enforcement coordination between the division of liquor enforcement (division) in the department of revenue and local licensing authorities and regarding enforcement against products smuggling;
• Regarding fees, which must not exceed $400 per year, unless the executive director determines that statewide compliance with products regulation has dropped below 90%, at which time the executive director may, by rule, raise the maximum fee to $600; and
• Authorizing a single, large-operator license fee for retailers with more than 10 retail locations, which fee is not subject to the general maximum fee amount.

Section 9 requires every retailer of the products in the state, on and after July 1, 2021, to obtain a license for each retail location owned. The division is charged with licensing retailers and coordinating with local authorities on retail location compliance checks and investigations of complaints about retailers.

Section 10 prohibits:

• New retail locations at which products are sold from being located within 500 feet of a school unless a local licensing authority has approved a license application for the new retail location;
• Retail locations that sell electronic smoking device products from advertising those products in a manner that is visible from outside the retail location; and
• Delivery of products, other than cigars and pipe tobacco, directly to consumers unless the delivery is made by an owner or employee of a licensed retailer who is at least 21 years of age and, at the time of delivery, checks the identification of the individual receiving the delivery to determine that the individual is 21 years of age or older.

Section 11 authorizes the division to seek injunctive relief against a person who violates the act and impose fines on or suspend or revoke the state license of a retailer found to have violated the act.

Section 12 adjusts the fine amounts for violating the prohibition against selling products to minors from a maximum fine of $1,000 to $15,000 for a fifth or subsequent violation within 24 months to a maximum fine of $1,000 to $15,000 for a fourth or subsequent violation within 24 months. Additionally, the division must prohibit a retailer who commits a second or subsequent violation within 24 months from selling products at the retail location where the violation occurred for a specified period of time, starting with at least 7 days for a second violation within 24 months, to at least 30 days for a third violation within 24 months, and finally for up to 3 years for a fourth or subsequent violation within 24 months.

Additionally, section 12 establishes fines ranging from $1,000 for a first violation to $3,000 for a third or subsequent violation within 24 months for the following violations:

• Advertising electronic smoking device products at a retail location where they are sold in a manner that is visible from outside the retail location;
• Delivering products without complying with the delivery requirements; and
• Selling or offering to sell products without a valid state license. If a person sells or offers to sell products without a valid state license at least 3 times within 24 months, the person is not eligible to apply for a state license for 3 years thereafter.

Further, section 12 also applies the same fine structure that applies to selling products from a vending machine or failing to display the requisite warning to a violation of the prohibition against allowing a person under 18 years of age to sell or participate in the sale of products.

For the 2019-20 state fiscal year, the act appropriates $45,414 to the department of revenue from the liquor enforcement division and state licensing authority cash fund (cash fund) for implementation of the act.

For the 2020-21 state fiscal year, the act appropriates:

• $2,391,262 to the department of revenue from the cash fund for implementation of the act;
• $98,605 to the department of law from reappropriated funds received from the department of revenue for legal services for the department of revenue; and
• $69,450 to the department of personnel from reappropriated funds received from the department of revenue for vehicle replacement lease or purchase.
  (Note: This summary applies to this bill as enacted.)