88R17146 TYPED     By: Smith H.B. No. 4481       A BILL TO BE ENTITLED   AN ACT   relating to a directory of e-cigarettes and alternative nicotine   products sold in this state, and regulation of the sale and   distribution of e-cigarettes and alternative nicotine products;   imposing fees; creating criminal offenses; imposing a civil   penalty; imposing administrative penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 161.081, Health and Safety Code, is   amended by amending Subdivisions (1), (1-a), (3), and (4) and   adding Subdivision (1-a-1) to read as follows:                (1)  "Alternative Nicotine Product" means any   noncombustible product containing nicotine that is intended for   human consumption, whether chewed, absorbed, dissolved, ingested,   inhaled, or consumed by any other means, and does not include any   cigarette, e-cigarette, tobacco product, or any product regulated   as a drug or device by the United States Food and Drug   Administration under Subchapter V of the Federal Food, Drug, and   Cosmetic Act (21 U.S.C. Chapter 9, Subchapter V).                (1-a)  "Cigarette" has the meaning assigned by Section   154.001, Tax Code.                (1-a-1) [(1-a)] (A)  "E-cigarette" means:                            (i)  an electronic cigarette or any other   device that simulates smoking by using a mechanical heating   element, battery, or electronic circuit to deliver nicotine or   other substances to the individual inhaling from the device; or                            (ii)  a consumable liquid solution or other   material aerosolized or vaporized during the use of an electronic   cigarette or other device described by this subdivision.                      (B)  The term "e-cigarette" does not include a   prescription medical device unrelated to the cessation of smoking.                      (C)  The term "e-cigarette" includes:                            (i)  a device described by this subdivision   regardless of whether the device is manufactured, distributed, or   sold as an e-cigarette, e-cigar, or e-pipe or under another product   name or description; and                            (ii)  a component, part, or accessory for   the device, regardless of whether the component, part, or accessory   is sold separately from the device.                (3)  "Retail sale" means a transfer of possession from   a retailer to a consumer in connection with a purchase, sale, or   exchange for value of cigarettes, e-cigarettes, alternative   nicotine products, or tobacco products.                (4)  "Retailer" means a person who engages in the   practice of selling cigarettes, e-cigarettes, alternative nicotine   products, or tobacco products to consumers and includes the owner   of a coin-operated cigarette, e-cigarette, alternative nicotine   product, or tobacco product vending machine.  The term includes a   retailer as defined by Section 154.001 or 155.001, Tax Code, and an   e-cigarette retailer as defined by Section 147.0001 of this code,   as applicable.          SECTION 2.  Section 161.082, Health and Safety Code, is   amended to read as follows:          Sec. 161.082.  SALE OF CIGARETTES, E-CIGARETTES,   ALTERNATIVE NICOTINE PRODUCTS, OR TOBACCO PRODUCTS TO PERSONS   YOUNGER THAN 21 YEARS OF AGE PROHIBITED; PROOF OF AGE REQUIRED.  (a)     A person commits an offense if the person, with criminal   negligence:                (1)  sells, gives, or causes to be sold or given a   cigarette, e-cigarette, alternative nicotine product, or tobacco   product to someone who is younger than 21 years of age; or                (2)  sells, gives, or causes to be sold or given a   cigarette, e-cigarette, alternative nicotine product, or tobacco   product to another person who intends to deliver it to someone who   is younger than 21 years of age.          (b)  If an offense under this section occurs in connection   with a sale by an employee of the owner of a store in which   cigarettes, e-cigarettes, alternative nicotine product, or tobacco   products are sold at retail, the employee is criminally responsible   for the offense and is subject to prosecution.          (c)  An offense under this section is a Class C misdemeanor.          (d)  It is a defense to prosecution under Subsection (a)(1)   that the person to whom the cigarette, e-cigarette, alternative   nicotine product, or tobacco product was sold or given presented to   the defendant apparently valid proof of identification.          (e)  A proof of identification satisfies the requirements of   Subsection (d) if it contains a physical description and photograph   consistent with the person's appearance, purports to establish that   the person is 21 years of age or older, and was issued by a   governmental agency. The proof of identification may include a   driver's license issued by this state or another state, a passport,   or an identification card issued by a state or the federal   government.          (f)  It is an exception to the application of Subsection   (a)(1) that the person to whom the cigarette, e-cigarette,   alternative nicotine product, or tobacco product was sold:                (1)  is at least 18 years of age; and                (2)  presented at the time of purchase a valid military   identification card of the United States military forces or the   state military forces.          SECTION 3.  Section 161.083, Health and Safety Code, is   amended by amending Subsection (a) to read as follows:          (a)  A person may not sell, give, or cause to be sold or given   a cigarette, e-cigarette, alternative nicotine product, or tobacco   product to someone who is younger than 30 years of age unless the   person to whom the cigarette, e-cigarette, or tobacco product was   sold or given presents an apparently valid proof of identification.          SECTION 4.  Section 161.084, Health and Safety Code, is   amended by amending Subsections (a), (b) and (d) to read as follows:          (a)  Each person who sells cigarettes, e-cigarettes,   alternative nicotine products, or tobacco products at retail or by   vending machine shall post a sign in a location that is conspicuous   to all employees and customers and that is close to the place at   which the cigarettes, e-cigarettes, alternative nicotine products,     or tobacco products may be purchased.          (b)  The sign must include the statement:          PURCHASING OR ATTEMPTING TO PURCHASE CIGARETTES,   E-CIGARETTES, OR TOBACCO PRODUCTS BY A PERSON UNDER 21 YEARS OF AGE   IS PROHIBITED BY LAW.  SALE OR PROVISION OF CIGARETTES,   E-CIGARETTES, ALTERNATIVE NICOTINE PRODUCTS, OR TOBACCO PRODUCTS   TO A PERSON UNDER 21 YEARS OF AGE IS PROHIBITED BY LAW.  UPON   CONVICTION, A CLASS C MISDEMEANOR, INCLUDING A FINE OF UP TO $500,   MAY BE IMPOSED.  VIOLATIONS MAY BE REPORTED TO THE TEXAS   COMPTROLLER'S OFFICE BY CALLING (insert toll-free telephone   number).  PREGNANT WOMEN SHOULD NOT SMOKE.  SMOKERS ARE MORE LIKELY   TO HAVE BABIES WHO ARE BORN PREMATURE OR WITH LOW BIRTH WEIGHT.  THE   PROHIBITIONS ON THE PURCHASE OR ATTEMPT TO PURCHASE DESCRIBED ABOVE   DO NOT APPLY TO A PERSON WHO IS IN THE UNITED STATES MILITARY FORCES   OR STATE MILITARY FORCES.          (d)  The comptroller on request shall provide the sign   without charge to any person who sells cigarettes, e-cigarettes, or   tobacco products. The comptroller may provide the sign without   charge to distributors of cigarettes, e-cigarettes, alternative   nicotine products, or tobacco products or wholesale dealers of   cigarettes, e-cigarettes, alternative nicotine products, or   tobacco products in this state for distribution to persons who sell   cigarettes, e-cigarettes, alternative nicotine products, or   tobacco products. A distributor or wholesale dealer may not charge   for distributing a sign under this subsection.          SECTION 5.  Section 161.085, Health and Safety Code, is   amended by amending Subsections (a) and (b) to read as follows:          (a)  Each retailer shall notify each individual employed by   that retailer who is to be engaged in retail sales of cigarettes,   e-cigarettes, alternative nicotine products, or tobacco products   that state law:                (1)  prohibits the sale or distribution of cigarettes,   e-cigarettes, alternative nicotine products, or tobacco products   to any person who is younger than 21 years of age as provided by   Section 161.082 and that a violation of that section is a Class C   misdemeanor; [and]                (2)  requires each person who sells cigarettes,   e-cigarettes, alternative nicotine products, or tobacco products   at retail or by vending machine to post a warning notice as provided   by Section 161.084, requires each employee to ensure that the   appropriate sign is always properly displayed while that employee   is exercising the employee's duties, and provides that a violation   of Section 161.084 is a Class C misdemeanor; and                (3)  prohibits the sale or offer for sale of   e-cigarettes or alternative nicotine products that are not included   in the e-cigarette and alternative nicotine products directory   described by Section 161.0904.          (b)  The notice required by this section must be provided   within 72 hours of the date an individual begins to engage in retail   sales of cigarettes, e-cigarettes, alternative nicotine products,   or tobacco products.  The individual shall signify that the   individual has received the notice required by this section by   signing a form stating that the law has been fully explained, that   the individual understands the law, and that the individual, as a   condition of employment, agrees to comply with the law.          SECTION 6.  Section 161.086, Health and Safety Code, is   amended to read as follows:          Sec. 161.086.  VENDOR ASSISTED SALES REQUIRED; VENDING   MACHINES.  (a)  Except as provided by Subsection (b), a retailer or   other person may not:                (1)  offer cigarettes, e-cigarettes, alternative   nicotine products, or tobacco products for sale in a manner that   permits a customer direct access to the cigarettes, e-cigarettes,   or tobacco products; or                (2)  install or maintain a vending machine containing   cigarettes, e-cigarettes, alternative nicotine products, or   tobacco products.          (b)  Subsection (a) does not apply to:                (1)  a facility or business that is not open to persons   younger than 21 years of age at any time;                (2)  that part of a facility or business that is a   humidor or other enclosure designed to store cigars in a   climate-controlled environment and that is not open to persons   younger than 21 years of age at any time; or                (3)  a premises for which a person holds a package store   permit issued under the Alcoholic Beverage Code and that is not open   to persons younger than 21 years of age at any time.          (c)  The comptroller or a peace officer may, with or without   a warrant, seize, seal, or disable a vending machine installed or   maintained in violation of this section. Property seized under this   subsection must be seized in accordance with, and is subject to   forfeiture to the state in accordance with, Subchapter H, Chapter   154, Tax Code, and Subchapter E, Chapter 155, Tax Code.          (d)  A person commits an offense if the person violates   Subsection (a).  An offense under this subsection is a Class C   misdemeanor.          SECTION 7.  Section 161.087, Health and Safety Code, is   amended to read as follows:          Sec. 161.087.  DISTRIBUTION OF CIGARETTES, E-CIGARETTES,   ALTERNATIVE NICOTINE PRODUCTS, OR TOBACCO PRODUCTS. (a)  A person   may not distribute:                (1)  a free sample of a cigarette, e-cigarette,   alternative nicotine product, or tobacco product; or                (2)  a coupon or other item that the recipient may use   to receive a free cigarette, e-cigarette, alternative nicotine   product, or tobacco product or a sample cigarette, e-cigarette, or   tobacco product.          (a-1)  A person may not distribute to persons younger than 21   years of age a coupon or other item that the recipient may use to   receive a discounted cigarette, e-cigarette, alternative nicotine   product, or tobacco product.          (b)  Except as provided by Subsection (c), a person,   including a permit holder, may not accept or redeem, offer to accept   or redeem, or hire a person to accept or redeem:                (1)  a coupon or other item that the recipient may use   to receive a free cigarette, e-cigarette, alternative nicotine   product, or tobacco product or a sample cigarette, e-cigarette,   alternative nicotine product, or tobacco product; or                (2)  a coupon or other item that the recipient may use   to receive a discounted cigarette, e-cigarette, alternative   nicotine products, or tobacco product if the recipient is younger   than 21 years of age.          (b-1)  A coupon or other item that a recipient described by   Subsection (b) may use to receive a discounted cigarette,   e-cigarette, alternative nicotine product, or tobacco product may   not be redeemable through mail or courier delivery.          (c)  Subsections (a)(2), (a-1), (b), and (b-1) do not apply   to a transaction between permit holders unless the transaction is a   retail sale.          (d)  A person commits an offense if the person violates this   section.  An offense under this subsection is a Class C misdemeanor.          SECTION 8.  Section 161.088, Health and Safety Code, is   amended by amending Subsections (b) and (c) to read as follows:          (b)  The comptroller may make block grants to counties and   municipalities to be used by local law enforcement agencies to   enforce this subchapter and Subchapter R in a manner that can   reasonably be expected to reduce the extent to which cigarettes,   e-cigarettes, alternative nicotine products, and tobacco products   are sold or distributed, including by delivery sale, to persons who   are younger than 21 years of age.  At least annually, random   unannounced inspections shall be conducted at various locations   where cigarettes, e-cigarettes, and tobacco products are sold or   distributed, including by delivery sale, to ensure compliance with   this subchapter and Subchapter R.  The comptroller shall rely, to   the fullest extent possible, on local law enforcement agencies to   enforce this subchapter and Subchapter R.          (c)  To facilitate the effective administration and   enforcement of this subchapter, the comptroller shall make the   e-cigarette and alternative nicotine products directory described   by Sec. 161.0904 available to the public and may enter into   interagency contracts with other state agencies, and those agencies   may assist the comptroller in the administration and enforcement of   this subchapter.          SECTION 9.  The heading to Section 161.0901, Health and   Safety Code, is amended to read as follows:          Sec. 161.0901.  DISCIPLINARY ACTION AGAINST CIGARETTE,   E-CIGARETTE, ALTERNATIVE NICOTINE PRODUCT, AND TOBACCO PRODUCT   RETAILERS.          SECTION 10.  Subchapter H, Chapter 161, Health and Safety   Code, is amended by adding Section 161.0904 to read as follows:          Sec. 161.0904.  E-CIGARETTE AND ALTERNATIVE NICOTINE   PRODUCTS DIRECTORY.  (a)  A manufacturer of e-cigarettes or   alternative nicotine products that are sold in this state, whether   directly or through a wholesaler, retailer, or similar intermediary   or intermediaries, shall annually certify under penalty of perjury   on a form prescribed by the comptroller, that the manufacturer   agrees to comply with this subchapter and that:                (1)  the manufacturer has received a marketing   authorization or similar order for the e-cigarette or alternative   nicotine product from the United States Food and Drug   Administration pursuant to 21 U.S.C. Section 387j; or                (2)  the e-cigarette or alternative nicotine product   was marketed in the United States as of August 8, 2016, the   manufacturer submitted a premarket tobacco product application for   the e-cigarette or alternative nicotine product to the United   States Food and Drug Administration pursuant to 21 U.S.C. Section   387j on or before September 9, 2020, and the application either   remains under review by the United States Food and Drug   Administration or a final decision on the application has not   otherwise taken effect.          (b)  A manufacturer shall submit a separate certification   form for each e-cigarette or alternative nicotine product that is   sold in this state.          (c)  Each annual certification form required by Subsection   (a) shall be accompanied by:                (1)  a copy of the marketing authorization or other   order for the e-cigarette or alternative nicotine product issued by   the United States Food and Drug Administration pursuant to 21   U.S.C. Section 387j, or evidence that the premarket tobacco product   application for the e-cigarette or alternative nicotine product was   submitted to the United States Food and Drug Administration and a   final authorization or order has not yet taken effect; and                (2)  payment of $1,000 for each form submitted under   this section.          (d)  A manufacturer required to submit a certification form   pursuant to Subsection (a) shall notify the comptroller within 30   days of any material change to the certification form, including   the issuance or denial of a marketing authorization or other order   by the United States Food and Drug Administration pursuant to 21   U.S.C. Section 387j, or any other order or action by the United   States Food and Drug Administration that affects the ability of the   e-cigarette or alternative nicotine product to be introduced or   delivered into interstate commerce for commercial distribution in   the United States.          (e)  The comptroller shall maintain a directory that lists   all e-cigarette and alternative nicotine product manufacturers and   e-cigarettes and alternative nicotine products for which   certification forms have been submitted and shall update the   directory as necessary to ensure accuracy.          (f)  A person may not sell or offer for sale an e-cigarette or   alternative nicotine product in this state that is not included in   the directory described by Subsection (e), and an e-cigarette or   alternative nicotine product manufacturer may not sell, either   directly or through a wholesaler, retailer, or similar intermediary   or intermediaries, an e-cigarette or alternative nicotine product   in this state that is not included in the directory described by   Subsection (e).          (g)  The comptroller shall provide manufacturers notice and   an opportunity to cure deficiencies before removing manufacturers   or products from the directory.                (1)  The comptroller may not remove the manufacturer or   its products from the directory until at least 15 days after the   manufacturer has been given notice of an intended action. Notice   shall be sufficient and be deemed immediately received by a   manufacturer if the notice is sent either electronically or by   facsimile to an electronic mail address or facsimile number, as the   case may be, provided by the manufacturer in its most recent   certification filed under Subsection (a) of this section.                (2)  The e-cigarette or alternative nicotine product   manufacturer shall have 15 business days from the date of service of   the notice of the comptroller's intended action to establish that   the e-cigarette or alternative nicotine product manufacturer or its   products should be included in the directory.                (3)  A determination by the comptroller to not include   or to remove from the directory a manufacturer or a manufacturer's   product shall be subject to review by the filing of a civil action   for prospective declaratory or injunctive relief.          (h)  If a product is removed from the directory, each   retailer and wholesaler shall have twenty-one days from the day   such product is removed from the directory to remove the product   from its inventory and return the product to the manufacturer for   disposal.          (i)  A retailer who sells or offers for sale an e-cigarette   or alternative nicotine product in this state that is not included   in the directory shall be subject to disciplinary action as   described by Section 161.0901.          (j)  An e-cigarette or alternative nicotine product   manufacturer whose e-cigarettes or alternative nicotine products   are not listed in the directory and are sold in this state, whether   directly or through a wholesaler, retailer, or similar intermediary   or intermediaries, is subject to a civil penalty of $1,000. Each   sale of an e-cigarette or alternative nicotine product that is not   listed in the directory shall constitute a separate violation.          (k)  The comptroller or a person assisting the comptroller   with enforcement under Section 161.088 may seize and destroy   e-cigarettes and alternative nicotine products that are not listed   on the directory described by this section.          (1)  Funds collected under this section or pursuant to   enforcement action under this section or a disciplinary action   under Section 161.0901 shall be used to administer this section or   for block grants as described by Section 161.088(b).          SECTION 11.  This Act takes effect September 1, 2023.