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HF 2677 – Sale and Regulation of Vapor Products (LSB5259HV)
Staff Contact: Louie Hoehle (515.281.6561) louie.hoehle@legis.iowa.gov
Fiscal Note Version – New
Description
House File 2677 creates a new subchapter in Iowa Code chapter 453A, relating to the
regulation of vapor products in the State, and does the following:
• Requires vapor product manufacturers to annually certify to the Iowa Department of
Revenue (IDR) that each vapor product has either received a marketing authorization or
similar order from the federal Food and Drug Administration (FDA); or that the vapor product
was marketed in the United States as of August 8, 2016, the manufacturer submitted a
premarket tobacco product application for the product to the FDA on or before September 9,
2020, and the application either remains under review by the FDA or a final decision on the
application has not otherwise taken effect.
• Requires annual certifications to be accompanied by a payment of $100 for each vapor
product listed in the certification.
• Requires the IDR to maintain and make publicly available a vapor products directory that
lists all vapor products manufacturers and vapor products for which certification forms have
been submitted.
• Establishes civil penalties and licensee discipline for a manufacturer, retailer, distributor, or
wholesaler who sells or offers for sale a vapor product in this State that is not included in the
vapor products directory.
• Establishes that a vapor products manufacturer that knowingly makes a false representation
in any of the information required in the new subchapter is guilty of a serious misdemeanor
for each false representation.
• Establishes that knowingly shipping or receiving vapor products in violation of the new
subchapter is an unfair practice and a violation of Code section 714.16.
• Provides that each distributor or retailer that distributes or sells vapor products in the State
shall be subject to unannounced compliance checks conducted by the IDR or peace officers
for the purpose of enforcing the new subchapter.
• Provides that the revenues generated from the payment of fees and penalties shall be
credited to the Health Care Trust Fund and used for the administration and enforcement of
the new subchapter.
• Requires the director of the IDR to annually submit a report to the General Assembly by
January 15 regarding the status of the vapor products directory, vapor products
manufacturers, the vapor products included in the directory, and revenue and expenditures
related to administration and enforcement activities.
Background
Some states, including Louisiana and Alabama, have enacted legislation to create a vapor
products directory. Louisiana currently has 469 vapor products listed in its Vapor and
Alternative Nicotine Products Certification and Directory. Alabama currently has 1,575 vapor
products listed in its Electronic Nicotine Delivery Systems Products Directory.
Fiscal Note
Fiscal Services Division 2
The Health Care Trust Fund consists of the revenues generated from the tax on cigarettes and
tobacco products that are credited to the Fund annually. Moneys in the Fund are used only for
purposes related to health care; substance use disorder treatment and prevention; and tobacco
use prevention, cessation, and control.
A serious misdemeanor is punishable by confinement for no more than one year and a fine of at
least $430 but not more than $2,560.
A violation of Iowa Code section 714.16 is subject to the Attorney General (AG) seeking and
obtaining, in an action in a district court, a temporary restraining order, preliminary injunction, or
permanent injunction. If requested by the AG, the court may impose a civil penalty not to
exceed $40,000 per violation and not more than $5,000 for each day of intentional violation of a
temporary restraining order, preliminary injunction, or permanent injunction.
Assumptions
• Administrative duties related to HF 2677 will be conducted by current IDR staff.
• The following will not change over the projection period: charge, conviction, and sentencing
patterns and trends; prisoner length of stay (LOS); revocation rates; plea bargaining; and
other criminal justice system policies and practices.
• A delay of six months is assumed from the effective date of this Bill to the date of first entry
of affected offenders into the correctional system.
• Marginal costs for county jails cannot be estimated due to a lack of data. For purposes of
this analysis, the marginal cost for county jails is assumed to be $50 per day.
Correctional Impact
House File 2677 creates new criminal offenses, and the correctional impact cannot be
estimated due to a lack of existing conviction data. Figure 1 shows estimates for sentencing to
State prison, parole, probation, or Community-Based Corrections (CBC) residential facilities;
LOS in months under those supervisions; and supervision marginal costs per day for serious
misdemeanors. Refer to the Legislative Services Agency (LSA) memo addressed to the
General Assembly, Cost Estimates Used for Correctional Impact Statements, dated January 16,
2024, for information related to the correctional system.
Figure 1 — Sentencing Estimate and Length of Stay (LOS)
Minority Impact
House File 2677 creates new criminal offenses. As a result, Criminal and Juvenile Justice
Planning (CJJP) of the Department of Management (DOM) cannot use existing data to estimate
the minority impact of the Bill. Refer to the LSA memo addressed to the General Assembly,
Minority Impact Statement, dated January 16, 2024, for information related to minorities in the
criminal justice system.
Fiscal Impact
House File 2677 is estimated to increase revenues to the Health Care Trust Fund from the
potential collection of fees and penalties. The amount of revenue cannot be determined due to
the unknown number of vapor products that may be included in the vapor products directory.
Conviction Offense Class
Percent
Ordered to
State
Prison
FY 2023
Avg LOS in
Prison (All
Releases)
Marginal
Cost Per
Day Prison
Percent
Ordered to
Probation
FY23 Field
Avg LOS
on
Probation
Avg Cost
Per Day on
Probation
Percent
Sentenced
to CBC
Residential
Facility
Marginal
Cost Per
Day CBC
Percent
Ordered to
County Jail
Marginal
Cost Per
Day Jail
FY23 Field
Avg LOS
on Parole
Marginal
Cost Per
Day Parole
Serious Misdemeanor 1.7% 6.6 $24.94 53.0% 19.2 $7.67 1.2% $20.00 74.2% $50.00 N/A $7.67 3
House File 2677 creates new criminal offenses, and the fiscal impact to the correctional system
cannot be estimated due to a lack of existing conviction data. The average State cost per
offense for a serious misdemeanor ranges from $400 to $6,900.
Sources
Criminal and Juvenile Justice Planning, Department of Management
Department of Corrections
Department of Revenue
Legislative Services Agency
/s/ Jennifer Acton
March 27, 2024
Doc ID 1448466
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
www.legis.iowa.gov