PRINTER'S NO. 1660
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.1425
Session of
2025
INTRODUCED BY McNEILL, JAMES, BRIGGS, SHUSTERMAN, SANCHEZ,
VENKAT, GIRAL, HILL-EVANS, STEELE, SCHLOSSBERG, KHAN,
FREEMAN, SAMUELSON, HADDOCK, ECKER, KAIL, KLUNK, REICHARD,
SCHWEYER, MULLINS AND MARCELL, MAY 7, 2025
REFERRED TO COMMITTEE ON JUDICIARY, MAY 7, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in tobacco products tax, further providing for
definitions, for incidence and rate of tax, for licensing of
wholesalers and for licensing of retailers and providing for
Nicotine Electronic Cigarette Directory.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "contraband" in section 1201-A
of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, is amended and the section is amended by
adding definitions to read:
Section 1201-A. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
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22 context clearly indicates otherwise:
"Brand family." All styles of electronic cigarettes that
contain nicotine, sold under the same trademark and
differentiated from another style by means of additional
modifiers or descriptors. The term includes any brand name alone
or in conjunction with any other word, trademark, logo, symbol,
motto, selling message, recognizable pattern of colors or any
other indicia of product identification identical or similar to
or identifiable with a previously known brand of electronic
cigarettes that contain nicotine.
* * *
"Contraband." Any tobacco product for which the tax imposed
by this article has not been paid[ .] in accordance with this act
and any electronic cigarette that contains nicotine, which is
either not listed or is removed from the nicotine electronic
cigarette directory in violation of section 1235-A. The term
includes tobacco products for which property rights no longer
exist under this article and tobacco products sold, offered,
distributed or possessed for sale and tobacco products acquired,
held, owned, possessed, transported, imported or caused to be
imported that the person knows or should know are intended for
distribution or sale in this Commonwealth in violation of this
act.
"Costs of destruction." The costs incurred from the time of
seizure through to the time of destruction. The term includes,
but is not limited to, costs of seizure, transportation, storage
and destruction, including personnel costs, wages and outside
contractor costs associated with the activities.
* * *
"FDA." The United States Food and Drug Administration.
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30 "Importer." A person in any state or territory of the United
States to whom electronic cigarettes that contain nicotine that
are manufactured outside the United States are shipped,
delivered or consigned for resale.
* * *
"Timely filed premarket tobacco product application." An
application under 21 U.S.C. § 387j (relating to application for
review of certain tobacco products) for an electronic cigarette
that contains nicotine derived from tobacco marketed in the
United States as of August 8, 2016, that was submitted to the
FDA on or before September 9, 2020, and was accepted for filing
by the FDA.
"Tobacco noncompliance database." The database of persons,
including manufacturers, importers, distributors, wholesalers
and retailers, that are listed by the department on its publicly
accessible Internet website in accordance with section 1235-
A(t).
* * *
Section 2. Section 1202-A(b) of the act is amended to read:
Section 1202-A. Incidence and rate of tax.
* * *
(b) Retailer.--A retailer may only purchase tobacco products
from a licensed [dealer. If the tax is not collected by the
seller from the retailer, the tax is imposed on the retailer at
the time of purchase at the same rate as in subsections (a) and
(a.1) based on the retailer's purchase price of the tobacco
products. The retailer shall remit the tax to the department. ]
wholesaler.
* * *
Section 3. Section 1222-A(a) of the act is amended by adding
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30 paragraphs and the section is amended by adding a subsection to
read:
Section 1222-A. Licensing of wholesalers.
(a) Requirements.--Applicants for a wholesale license or
renewal of that license shall meet the following requirements:
* * *
(8) The applicant shall have submitted the surety bond
required by subsection (c), accurately represented the size
and cost of its inventory and other information required by
the surety bond and timely provided any requested financial
statement and additional records.
(9) The information provided by the wholesaler in its
application shall not contain false information or material
misrepresentations or omissions.
* * *
(c) Surety bond.--The applicant shall, at the time of
application, file with the department a surety bond payable to
the Commonwealth in an amount fixed by the department of at
least $25,000. The following shall apply:
(1) The required surety bond:
(i) Shall be subject to execution under paragraph
(4).
(ii) Shall be conditioned on the wholesaler's
compliance with the requirements of this act.
(iii) Shall be posted by a surety bond company
located within this Commonwealth and approved by the
department.
(iv) Must state that the wholesaler will faithfully
comply with the provisions of this article during the
effective period of the license.
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30 (2) The department may require a wholesaler to furnish a
bond in excess of $25,000, as necessary to ensure the
wholesaler's compliance with this act. The following shall
apply:
(i) For the purpose of determining whether an
existing bond is sufficient, the department may, by
written notice, require a wholesaler to furnish an
inventory by brand and cost, financial statement and
additional records in the form as the department may
prescribe to determine whether additional bonding is
warranted when compared to the risk of unrecouped costs
of destruction of contraband to the Commonwealth.
(ii) Upon failure of a wholesaler to furnish an
inventory by brand and cost, financial statement or
additional requested records within thirty 30 days of
written notice, or upon a determination that the
wholesaler misrepresented the information or the volume
of its product shipped into or within the United States,
the department may deny, suspend or revoke the
wholesaler's license.
(3) A surety on a wholesaler's bond shall be liable up
to the amount of the bond, and the Commonwealth may execute
on the surety bond:
(i) for costs of destruction of the wholesaler's
product to the extent it exceeds the amounts recovered
from the person from whom the product is confiscated or a
surety for the person; and
(ii) to recover civil penalties, costs and fees
assessed against the wholesaler.
(4) A surety on a bond furnished by a wholesaler as
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30 provided in this section shall be released and discharged
from liability to the Commonwealth accruing on the bond after
expiration of sixty 60 days from the date upon which the
surety shall have lodged with the Attorney General a written
request to be released and discharged. The following shall
apply:
(i) This paragraph shall not operate to relieve,
release or discharge the surety from liability already
accrued or which shall accrue before the expiration of
the 60-day period.
(ii) The Attorney General shall, upon receiving any
such request, notify the wholesaler who furnished the
bond. Unless the wholesaler, on or before the expiration
of the 60-day period, files with the department a new
bond, with corporate surety approved by and acceptable to
the department, the department shall revoke the
wholesaler's license.
(iii) If a new bond is furnished by the wholesaler,
the department shall cancel and surrender the old bond of
the wholesaler as soon as it is satisfied that the new
bond provides adequate security for the wholesaler's
obligations.
Section 4. Section 1223-A of the act is amended to read:
Section 1223-A. Licensing of retailers.
(a) Requirements.-- Applicants for a retail license or
renewal of that license shall meet the following requirements:
(1) The premises in which the applicant proposes to
conduct business are adequate to protect the revenues.
(2) The applicant shall not have failed to disclose any
material information required by the department.
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30 (3) The applicant shall not have any material false
statement in the application.
(4) The applicant shall not have violated any provision
of this article.
(5) The applicant shall have filed all required State
tax reports and paid any State taxes not subject to a timely
perfected administrative or judicial appeal or subject to a
duly authorized deferred payment plan.
(6) The applicant shall have submitted the surety bond
required by subsection (b), accurately represented the size
and cost of the applicant's inventory and timely provided any
requested financial statement and additional records.
(b) Surety bond.--The applicant shall at the time of
application file with the department a surety bond payable to
the Commonwealth in an amount fixed by the department of at
least $2,500. The following shall apply:
(1) Every bond must have as surety a surety company
approved by the department.
(2) The bond must state that the retailer will
faithfully comply with the provisions of this article during
the effective period of the license.
(3) The department may require any retailer to furnish
additional, acceptable corporate surety bond as necessary to
ensure that the costs of destruction of contraband are
secured based upon the size and cost of inventory of a
retailer as represented by the retailer in its surety bond.
The following shall apply:
(i) For the purpose of determining whether an
existing bond is sufficient, the department may, by
written notice, require a retailer to furnish an
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30 inventory by brand and cost, financial statement and
additional records in the form as the department may
prescribe to determine whether additional bonding is
warranted when compared to the risk of unrecouped costs
of destruction of contraband to the Commonwealth.
(ii) Upon failure of a retailer to furnish an
inventory by brand, financial statement or additional
requested records within 30 days of written notice, or
upon a determination that the retailer misrepresented the
size or cost of its inventory through inspection or
otherwise, the department may suspend or revoke the
license.
(4) A retailer with multiple stores may post a bond not
to exceed $25,000.
(c) Surety discharge.--A surety on a bond furnished by a
retailer as provided in this section shall be released and
discharged from liability to the Commonwealth accruing on the
bond after expiration of 60 days from the date upon which the
surety lodged with the department a written request to be
released and discharged. The following shall apply:
(1) This subsection shall not operate to relieve,
release or discharge the surety from liability already
accrued or which shall accrue before the expiration of the
60-day period.
(2) The department shall, upon receiving the request,
notify the retailer who furnished the bond. Unless the
retailer, on or before the expiration of the 60-day period,
files with the department a new bond, with corporate surety
approved by and acceptable to the department, the department
shall cancel the retailer's license.
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30 (3) If a new bond is furnished by a retailer, the
department shall cancel and surrender the old bond of the
retailer as soon as it is satisfied that the costs of
destruction are reasonably covered by the new bond.
Section 5. The act is amended by adding a section to read:
Section 1235-A. Nicotine Electronic Cigarette Directory.
(a) Intent.--It is the intent of the General Assembly under
this section to establish effective tools for use by the
department and the Attorney General to prevent and deter the
sale of electronic cigarettes that contain nicotine in the
Commonwealth which have not been certified under subsection (b).
To accomplish this, thi s section requires annual manufacturer
and product certifications and a public directory listing all
certified manufacturers and electronic cigarettes that contain
nicotine. In addition , this section authorizes the department
and the Attorney General, and their agents, to perform regular
inspections of businesses who sell or store electronic
cigarettes that contain nicotine, inspect the books and records
of the persons and impose penalties for noncompliance . This
section requires the Attorney General to annually report to the
General Assembly on the effectiveness of the enforcement
activities taken under thi s section , to ide ntify all resources
used in the enforcement activities and their costs and to set
the level consistent with any enforcement activities to the
amount budgeted by the General Assembly for the enforcement
activities.
(b) Certification.--
(1) Within 60 days of the effective date of this
subsection and annually thereafter, every manufacturer of
electronic cigarettes that contain nicotine that are sold for
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30 retail sale in this Commonwealth, whether directly or through
an importer, wholesaler, distributor, retailer or similar
intermediary or intermediaries, shall execute and deliver to
the Attorney General a certification, under penalty of
perjury on a form and in the manner prescribed by the
Attorney General, that the manufacturer is compliant with
this section , agrees to continue to comply with this section ,
has posted the surety bond required by sections 1222-A and
1223-A a nd that, for each electronic cigarette that contains
nicotine:
(i) the manufacturer has received a marketing
granted order for the electronic cigarette that contains
nicotine from the FDA in accordance with 21 U.S.C. § 387j
(relating to application for review of certain tobacco
products);
(ii) the manufacturer has submitted a timely filed
premarket tobacco product application for the electronic
cigarette that contains nicotine to the FDA under 21
U.S.C. § 387j and the application either remains under
review by the FDA or has received a denial order that has
been and remains stayed by the FDA or court order,
rescinded by the FDA, or vacated by a court; or
(iii) the manufacturer was not required to submit an
additional premarket tobacco product application for the
electronic cigarette that contains nicotine because the
electronic cigarette that contains nicotine reflects
changes to the name, brand style or packaging of an
electronic cigarette that contains nicotine that is
covered under subparagraph (i) or (ii).
(2) To the extent that 21 U.S.C. § 387j is amended or
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30 the Federal Government issues subsequent regulations,
official guidance or a formal policy statement changing
compliance requirements or standards for an electronic
cigarette that contains nicotine to become federally
compliant, each manufacturer of an electronic cigarette that
contains nicotine that is sold for retail sale or to a
consumer in this Commonwealth shall submit documentation to
the Attorney General substantiating compliance with the new
Federal requirements or standards within 30 days of the date
compliance is mandated. Failure to substantiate compliance
with a new Federal mandate shall be grounds for removal of
the manufacturer and its electronic cigarettes that contain
nicotine from the directory established under this section.
(c) Declaration.--The form prescribed by the Attorney
General under subsection (b) must require each manufacturer to:
(1) Specify the name under which the manufacturer
transacts or intends to transact business, the address of the
location of the manufacturer's principal place of business,
the manufacturer's email address and the brand name,
category, such as e-liquid, power unit, device, e-liquid
cartridge, e-liquid pod or disposable, product name and
flavor of each electronic cigarette that contains nicotine
that is sold in this Commonwealth.
(2) For electronic cigarettes that contain nicotine
manufactured outside of the United States, provide a complete
list of its importers into the United States who sell the
products into the Commonwealth and the brand families sold by
the importers, including the importer's name, address,
contact name, phone number and email address at which the
importer can be reached, and a declaration signed by each
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30 importer on a form prescribed by the Attorney General. The
declaration shall state the following:
(i) The importer accepts joint and several liability
with the manufacturer for payment of civil penalties,
costs, expenses and attorney fees related to this
section .
(ii) The importer consents to personal jurisdiction
in this Commonwealth for the purposes of claims by the
Commonwealth for payment of civil penalties, costs,
expenses and attorney fees.
(iii) The importer has appointed an agent for
service of process in this Commonwealth according to the
same requirements under this section .
(iv) The importer holds a valid permit under 26
U.S.C. § 5713 (relating to permit).
(v) The importer agrees to provide any information
required under this section .
(d) Content.--Each annual certification form required by
subsections (b) and (c) shall be accompanied by:
(1) A copy of:
(i) the marketing granted order issued by the FDA
under 21 U.S.C. § 387j;
(ii) the acceptance letter issued by the FDA under
21 U.S.C. § 387j for a timely filed premarket tobacco
product application; or
(iii) a document issued by the FDA or by a court
confirming that the premarket tobacco product application
has received a denial order that has been and remains
stayed by the FDA or court order, rescinded by the FDA or
vacated by a court.
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30 (2) A payment of $2,000 for each brand family of
electronic cigarette that contains nicotine, plus $200 for
each brand style of the product, the first time a
manufacturer submits a certification form for that brand
family of electronic cigarette that contains nicotine and a
payment of $1,000 annually thereafter for each brand family
of electronic cigarette that contains nicotine, plus $100 for
each brand style of the product.
(e) Confidentiality.--Except to the extent that the FDA or
the manufacturer has made the information public or a third
party disclosed the information and the manufacturer has not
taken legal action to prevent further disclosure, the
information submitted by the manufacturer under subsection (d)
(1) and (h) shall be considered confidential commercial or
financial information for purposes of the act of February 14,
2008 (P.L.6, No.3), known as the Right-to-Know Law. The
manufacturer may redact confidential commercial or financial
information provided under subsection (d)(1) and (h). The
Attorney General or department shall not disclose the
information except as required or authorized by law.
(f) Notification.--A manufacturer required to submit a
certification form under subsections (b) and (c) shall notify
the Attorney General within 30 days of any material change to
the certification form, including the issuance or denial of a
marketing order by the FDA under 21 U.S.C. § 387j, or any other
order or action by the FDA or any court that affects the ability
of the electronic cigarette that contains nicotine to be
introduced or delivered into interstate commerce for commercial
distribution in the United States.
(g) Directory.-- Within 120 days from the effective date of
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30 this subsection , the Attorney General shall maintain and make
available on the Attorney General's publicly accessible Internet
website a directory that lists all manufacturers of electronic
cigarettes that contain nicotine, brand names, categories, such
as e-liquid, e-liquid cartridge, e-liquid pod or disposable,
product names and flavors for which certification forms have
been submitted and approved by the Attorney General and shall
update the directory at least monthly to ensure accuracy. The
Attorney General shall establish a process to provide licensed
retailers, distributors and wholesalers notice of the initial
publication of the directory and changes made to the directory
in the prior month.
(h) Compliance.--The department and the Attorney General may
require a manufacturer to submit additional information as
necessary to determine compliance with this section, including,
but not limited to, samples of the packaging or labeling of each
brand family and style, each stock keeping unit number for each
brand style included in the certification for listing on the
directory, copies of invoices and other sales records for each
brand family of electronic cigarettes that contain nicotine sold
in this Commonwealth, and any documents related to the
manufacturer's premarket tobacco application, to determine
whether a manufacturer is in compliance with this section . T he
Attorney General may require manufacturers to provide a sworn
affidavit as to the authenticity of any documents submitted by
the manufacturer in support of its certification or in response
to a request by the Attorney General.
(i) Nondisclosure.--A manufacturer or the manufacturer's
electronic cigarette that contains nicotine may not be included
or retained in the directory if the Attorney General determines
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30 that any of the following apply:
(1) The manufacturer failed to provide a complete and
accurate certification as required by subsection (b).
(2) The manufacturer submitted a certification that does
not comply with the requirements of subsections (b), (c) and
(d)(1).
(3) The manufacturer failed to include with its
certification the payment required by subsection (d)(2).
(4) If the manufacturer is located outside of the United
States, the manufacturer failed to provide the information
and declaration required by subsection (c)(2).
(5) The manufacturer failed to provide the surety bond
required by subsect ion (k) or misrepresented any of the
information required by the surety bond.
(6) The information provided by the manufacturer in its
certification is determined by the Attorney General to
contain false information or material misrepresentations or
omissions.
(j) Denial.--The Attorney General may deny a manufacturer's
certification if any of the following apply:
(1) The manufacturer sold products in this Commonwealth
required to be certified under this section during a period
when either the manufacturer or the brand family had not been
certified and listed on the directory.
(2) The manufacturer was denied listing or involuntarily
removed from another state's electronic cigarette directory
and the agency decision is final and no longer subject to
appeal, if the other state's directory has requirements
similar to those of the directory under this section.
(3) The manufacturer failed to provide any information
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30 requested under subsection (h).
(4) The information provided by the manufacturer in its
certification or under subsection (h) is determined to
contain false information or material misrepresentations or
omissions.
(5) The manufacturer failed to submit complete and
accurate reports as required by the Prevent All Cigarette
Trafficking Act of 2009 (Pub. L. No. 111-154).
(6) The manufacturer has been convicted of violating 18
Pa.C.S. § 6305 (relating to sale of tobacco products) .
(7) The manufacturer failed to adhere to the Federal
nicotine packaging standard required by 15 U.S.C. § 1472a
(relating to special packaging for liquid nicotine
containers). For purposes of this paragraph, all electronic
cigarettes constitute "liquid nicotine containers" under the
Federal nicotine packaging standard.
(k) The following shall apply:
(1) Manufacturers seeking to certify to sell electronic
cigarettes that contain nicotine shall at the time of
certification to the Attorney General submit a surety bond
payable to the Commonwealth in an amount fixed by the
Attorney General of at least $50,000.
(2) The required surety bond:
(i) Shall be subject to execution under paragraph
(4).
(ii) Shall be conditioned on the manufacturer's
compliance with the requirements of this section .
(iii) Shall be posted by a surety bond company
located within this Commonwealth and approved by the
Attorney General.
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30 (iv) Must state that the manufacturer will
faithfully comply with the provisions of this article
during the effective period of the certification.
(3) The Attorney General may require a manufacturer to
furnish a bond in excess of $50,000, as necessary to ensure
the manufacturer's compliance with this section . For the
purpose of determining whether an existing bond is
sufficient, the Attorney General may, by written notice,
require a manufacturer to furnish an inventory by brand and
cost, financial statement and additional records in the form
as the department may prescribe to determine whether
additional bonding is warranted when compared to the risk of
unrecouped costs of destruction of contraband to the
Commonwealth. Upon failure of a manufacturer to furnish an
inventory by brand and cost, financial statement or
additional requested records within 30 days of written
notice, or upon a determination that the manufacturer
misrepresented the information or the volume of its product
shipped into or within the United States, the Attorney
General may deny listing or remove the manufacturer from the
directory.
(4) A surety on a manufacturer's bond shall be liable up
to the amount of the bond, and the Commonwealth may execute
on the surety bond:
(i) for costs of destruction of the manufacturer's
product to the extent it exceeds the amounts recovered
from the person from whom such product is confiscated or
a surety for the person; and
(ii) to recover civil penalties, costs and fees
assessed against the wholesaler under this section .
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30 (5) A surety on a bond furnished by a manufacturer as
provided in this section shall be released and discharged
from liability to the Commonwealth accruing on the bond after
expiration of 60 days from the date upon which the surety
shall have lodged with the Attorney General a written request
to be released and discharged. This paragraph shall not
operate to relieve, release or discharge the surety from
liability already accrued or which shall accrue before the
expiration of the 60-day period. The Attorney General shall,
upon receiving a request, notify the manufacturer who
furnished the bond. Unless the manufacturer, on or before the
expiration of the 60-day period, files with the department a
new bond, with corporate surety approved by and acceptable to
the Attorney General, the Attorney General shall deny or
remove the listing of the manufacturer. If a new bond is
furnished by a manufacturer, the Attorney General shall
cancel and surrender the old bond of the manufacturer as soon
as the bond is satisfied the new bond provides adequate
security for the manufacturer's obligations.
(l) Removal from directory.--The Attorney General shall
provide manufacturers notice and an opportunity to cure
deficiencies before denying a certification or removing
manufacturers or products from the directory. The following
shall apply:
(1) The Attorney General may not remove the manufacturer
or its products from the directory until at least 30 business
days after the manufacturer has been given notice of an
intended action stating the reasons for removal. Notice shall
be sufficient and deemed immediately received by a
manufacturer if the notice is sent either electronically or
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30 by facsimile to an email address or facsimile number provided
by the manufacturer in its most recent certification filed
under subsections (a), (b), (c) and (d).
(2) The manufacturer of electronic cigarettes that
contain nicotine shall have 30 business days from the date of
service of the notice of the Attorney General's intended
action to cure the deficiencies or otherwise establish that
the manufacturer or its products should be included in the
directory.
(m) Returns.--If a product is removed from the directory,
each retailer, distributor, wholesaler and importer shall have
30 business days from the day such product is removed from the
directory to sell the product or remove the product from its
inventory and return the product to the manufacturer for
disposal. Manufacturers shall accept returns of and provide
refunds for such products and shall dispose of such products in
compliance with all Federal, State and local environmental laws
and regulations. After 30 business days following removal from
the directory, the product identified in the notice of removal
is contraband, may not be purchased or sold for retail sale in
this Commonwealth and is subject to seizure, forfeiture and
destruction. The cost of the seizure, forfeiture and destruction
shall be borne by the person from whom the product is
confiscated, except that no product may be seized from a
consumer who has made a bona fide purchase of the product. The
department and the Attorney General may store and dispose of the
seized products as appropriate, in accordance with Federal,
State and local laws pertaining to storage and disposal of such
products.
(n) Prohibition.--Except as provided in paragraphs (1) and
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30 (2), within 120 days of the effective date of this subsection or
on the date that the Attorney General first makes the directory
available for public inspection on its official website,
whichever is later, electronic cigarettes that contain nicotine
not included in the directory under subsection (g) may not be
sold for retail sale in this Commonwealth either directly or
through an importer, distributor, wholesaler, retailer or
similar intermediary or intermediaries. The following shall
apply:
(1) Each retailer shall have 120 days from the date that
the Attorney General first makes the directory available for
inspection on its publicly accessible Internet website to
sell products that were in its inventory and not included in
the directory or to remove those products from its inventory.
(2) Each distributor or wholesaler shall have 120 days
from the date that the Attorney General first makes the
directory available for inspection on its publicly accessible
Internet website to remove the products intended for sale in
this Commonwealth from its inventory.
(3) After 120 days following publication of the
directory, electronic cigarettes that contain nicotine not
listed in the directory and intended for sale in the
Commonwealth are contraband and are subject to seizure,
forfeiture and destruction, and may not be purchased or sold
for retail sale in this Commonwealth. The cost of the
seizure, forfeiture and destruction shall be borne by the
person from whom the products are confiscated, except that no
products may be seized from a consumer who has made a bona
fide purchase of such product. The Attorney General may store
and dispose of the seized products as appropriate, in
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30 accordance with Federal, State and local laws pertaining to
storage and disposal of the products.
(o) Penalties.--The following penalties shall apply to
violations of this section:
(1) A retailer, distributor, wholesaler or importer who
sells or offers for sale an electronic cigarette that
contains nicotine for retail sale in this Commonwealth that
is not included in the directory shall be subject to:
(i) A civil penalty of $500 for each product offered
for sale in violation of this section until the offending
product is removed from the market or until the offending
product is properly listed on the directory.
(ii) For a second violation within a 12-month
period, a civil penalty of at least $750 but not more
than $1,000 per day per product, and the license of the
licensee shall be suspended for at least 14 days.
(iii) For a third violation within a 12-month
period, a civil penalty of at least $1,000 but not more
than $1,500 per day per product, and the license of the
licensee shall be revoked.
(2) A manufacturer whose electronic cigarettes that
contain nicotine are not listed in the directory and are sold
for retail sale in this Commonwealth, whether directly or
through an importer, distributor, wholesaler, retailer or
similar intermediary or intermediaries, shall be subject to a
civil penalty of $1,000 for each product offered for sale in
violation of this section until the offending product is
removed from the market or until the offending product is
properly listed on the directory. Any manufacturer that
falsely represents any information required by subsection
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30 (b), (c) or (g) commits a misdemeanor of the third degree for
each false representation.
(3) A person, including any manufacturer, importer,
wholesaler, distributor or retailer, who sells or offers to
sell an electronic cigarette that contains nicotine to an
importer or dealer listed in the tobacco noncompliance
database shall be subject to a civil penalty of $500 for each
product sold to or offered to be sold to the person. A
consumer who has made a bona fide purchase of the product
shall not be subject to the penalties in this section.
(4) A person, including any manufacturer, importer,
wholesaler, distributor or retailer, who purchases an
electronic cigarette that contains nicotine from a person
listed in the tobacco noncompliance database shall be subject
to a civil penalty of $500 for each product purchased. A
consumer who has made a bona fide purchase of such product
shall not be subject to the penalties in this section.
(5) A person, including any manufacturer, importer,
wholesaler, distributor or retailer that violates both
paragraphs (3) and (4) related to the same product shall be
subject to the penalties provided under this section o nly
once and not compounded or consecutively.
(6) A violation of this section shall be deemed to be an
unfair or deceptive act or practice in violation of the act
of December 17, 1968 (P.L.1224, No.387), known as the Unfair
Trade Practices and Consumer Protection Law.
(7) For purposes of this subsection, the term "each
product" shall mean each individual electronic cigarette that
contains nicotine offered for sale, notwithstanding whether
the electronic cigarette that contains nicotine bears the
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30 same stock keeping unit number.
(8) In an action to enforce this section , the
Commonwealth shall be entitled to recover costs, including
the costs of investigation, expert witness fees and
reasonable attorney fees.
(p) Tobacco Products Administration Cash Fund.--All costs,
including costs of investigation and costs of destruction,
certification fees, expert witness fees, attorney fees, civil
penalties and amounts recovered on surety bonds collected by the
department and the Attorney General under this section shall be
remitted to the State Treasurer for credit to the Tobacco
Products Administration Cash Fund and used for administration
and enforcement of this section .
(q) Enforcement.--To enforce the provisions of this section,
the department or the Attorney General, or their designees,
including any Commonwealth or local enforcement officer, may
examine the books, papers, invoices and other records of any
person in possession, control or occupancy of any premises in
the Commonwealth where electronic cigarettes that contain
nicotine are placed, stored, sold or offered for sale, including
the stock of electronic cigarettes that contain nicotine on the
premises. Each person in the possession, control or occupancy of
any premises where electronic cigarettes that contain nicotine
are placed, sold or offered for sale shall give the department
or the Attorney General, or their designees, including any
Commonwealth or local enforcement officer, the means, facilities
and opportunity for the examinations authorized by this section.
A person that willfully refuses t o cooperate with or permit an
examination as provided under this section shall be subject to
the criminal penalties, fines and costs provided under section
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30 1214-A .
(r) Violations.--A person who violates this section shall be
subject to the criminal penalties, fines and costs otherwise
provided by this article. The Commonwealth may seek injunctive
relief or other order to prevent a threatened or actual
violation of, or to ensure compliance by, a person with this
section.
(s) Compliance.--Each retailer, distributor, wholesaler,
importer and any similar intermediary that sells or distributes
electronic cigarettes that contain nicotine in this Commonwealth
shall be subject to unannounced compliance checks. The
department and the Attorney General shall jointly publish the
results of all compliance checks at least annually and shall
make the results available to the public on request.
(t) Database.--The department shall maintain and publish on
its publicly accessible Internet website a tobacco noncompliance
database listing every person, including any manufacturer,
importer, wholesaler, distributor or retailer that has three or
more violations under this section within the preceding 12
months. The person shall remain listed on the tobacco
noncompliance database through the end of the 12th full calendar
month after the person's most recent violation under this
section.
(u) Agent for service of process.--Any nonresident
manufacturer of electronic cigarettes that contain nicotine
shall, as a condition precedent to being included in the
directory created in this section, appoint and continually
engage without interruption the services of an agent in the
Commonwealth to act as agent for the service of process on whom
all process, and any action or proceeding against it concerning
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30 or arising out of the enforcement of this section, may be served
in any manner authorized by law. Service by certified mail on
the agent shall constitute legal and valid service of process on
the manufacturer. The manufacturer shall provide the name,
address, telephone number, email address and proof of the
appointment and availability of such agent to the department and
Attorney General. The following shall apply:
(1) The manufacturer shall provide notice to the
department and Attorney General 30 calendar days prior to
termination of the authority of an agent and shall further
provide proof, as required by the department and Attorney
General, of the appointment of a new agent no less than five
calendar days prior to the termination of an existing agent
appointment. If an agent terminates an agency appointment,
the manufacturer shall notify the department and Attorney
General of the termination within five calendar days and
shall include proof, as required by the department and
Attorney General, of the appointment of a new agent.
(2) Any manufacturer whose electronic cigarettes that
contain nicotine are sold in this Commonwealth without the
appointment of an agent as required by this section shall be
deemed to have appointed the Secretary of State as its agent
for service of process. The appointment of the Secretary of
State under this subsection shall not satisfy the condition
precedent required to be included or retained in the
directory.
(v) Foreign importers.--In the case of a manufacturer
located outside of the United States, each importer into the
United States of the manufacturer's brand families that are sold
in this Commonwealth shall bear joint and several liability with
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30 the manufacturer for payment of all civil penalties, fees, costs
and attorney fees due under this section .
(w) Determination.--A determination by Attorney General to
not include or to remove from the directory a manufacturer or a
product shall be subject to review by the filing of a petition
for review with Commonwealth Court within 21 days of the
determination. No party other than the manufacturer may
challenge a determination by the department or Attorney General.
(x) Resale.--No retailer shall purchase electronic
cigarettes that contain nicotine for resale except from a
licensed wholesaler operating with a valid license issued in
accordance with section 1222-A.
(y) Regulations.--The department or the Attorney General may
promulgate rules necessary to effectuate the purposes of this
section.
(z) Report.--Beginning July 1 after the effective date of
this subsection and annually thereafter, the Attorney General
shall provide a report to the General Assembly regarding the
status of the directory, manufacturers and products included in
the directory, revenue and expenditures related to
administration of this section and enforcement activities
undertaken in accordance with this section.
(aa) Publication.--The department and the Attorney General
shall share documents and information obtained pursuant to this
section with other Federal, State and local agencies as
necessary to enforce this section, similar statutes of other
states or localities, and other tobacco-related laws and
regulations.
Section 6. This act shall take effect in 60 days.
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