By: Thierry H.B. No. 3218
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of e-cigarettes; requiring an
occupational permit; authorizing fees; authorizing administrative
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter H, Chapter 161, Health and Safety
Code, is amended by adding Section 161.0873 to read as follows:
Sec. 161.0873. SALE OF E-CIGARETTES WITH FLAVORING. A
person may sell, in accordance with this chapter, an e-cigarette
that contains a food-grade additive or synthetic flavoring
substance that adds flavor, provided the additive or substance is
not prohibited by the United States Food and Drug Administration.
SECTION 2. Section 161.0875(a), Health and Safety Code, is
amended to read as follows:
(a) A person may not sell or cause to be sold a container
that contains liquid with nicotine and that is an accessory for an
e-cigarette unless:
(1) the container:
(A) satisfies the child-resistant effectiveness
standards under 16 C.F.R. Section 1700.15(b)(1) when tested in
accordance with the method described by 16 C.F.R. Section 1700.20;
or
(B) [(2) the container] is a cartridge that is
prefilled and sealed by the manufacturer and is not intended to be
opened by a consumer;
(2) the container contains a tamper-evident feature:
(A) with at least one indicator or barrier to
entry that, if breached or missing, can reasonably be expected to
provide visible evidence of tampering to consumers; and
(B) that is designed to remain intact when
handled in a reasonable manner during the manufacture,
distribution, and retail display of the container; and
(3) the container's label contains a nicotine
addictiveness warning statement described by 21 C.F.R. Section
1143.3.
SECTION 3. Subchapter H, Chapter 161, Health and Safety
Code, is amended by adding Section 161.0877 to read as follows:
Sec. 161.0877. SALE OF E-CIGARETTE CONTAINERS. A person
may not sell or cause to be sold an e-cigarette container that:
(1) includes a cartoon-like fictional character that
mimics characters primarily aimed at entertaining minors;
(2) imitates or mimics trademarks or trade dress of
products that are or have been primarily marketed to minors;
(3) includes a symbol or celebrity image that is
primarily used to market products to minors; or
(4) includes an image of an individual who appears to
be younger than 27 years of age.
SECTION 4. Section 161.124, Health and Safety Code, is
amended to read as follows:
Sec. 161.124. USE OF ADVERTISING FEE. (a) In this section,
"e-cigarette" has the meaning assigned by Section 161.081.
(b) The comptroller shall deposit the fee collected under
Section 161.123 to a special account in the state treasury called
the tobacco and e-cigarette education and enforcement [education]
fund.
(c) [(b)] Money in the account may be appropriated only for
administration and enforcement of this section, enforcement of law
relating to cigarettes, e-cigarettes, and tobacco products, and the
education advertising campaign and grant program established under
Subchapter O[, Chapter 161].
SECTION 5. Section 161.452(c), Health and Safety Code, is
amended to read as follows:
(c) A person taking a delivery sale order of e-cigarettes
shall comply with:
(1) the age verification requirements prescribed by
Section 161.453;
(2) the payment requirements prescribed by Section
161.4535;
(3) the disclosure requirements prescribed by Section
161.454;
(4) [(3)] the shipping requirements prescribed by
Section 161.455;
(5) [(4)] the registration and reporting requirements
prescribed by Section 161.456; and
(6) [(5)] each law of this state that generally
applies to sales of e-cigarettes that occur entirely within this
state, including a permit requirement under Subchapter Z.
SECTION 6. Subchapter R, Chapter 161, Health and Safety
Code, is amended by adding Sections 161.4525 and 161.4535 to read as
follows:
Sec. 161.4525. AUTHORIZED INFORMATION. A person taking a
delivery sale order for e-cigarettes may request the prospective
purchaser's e-mail address.
Sec. 161.4535. PAYMENT REQUIREMENT. A person may not make a
delivery sale for e-cigarettes unless the person receives full
payment for the order before the e-cigarettes are mailed or
shipped. The payment must be in the form of:
(1) a check associated with a bank account in the
prospective purchaser's name; or
(2) a credit or debit card issued in the prospective
purchaser's name.
SECTION 7. Chapter 161, Health and Safety Code, is amended
by adding Subchapter Z to read as follows:
SUBCHAPTER Z. PERMIT REQUIREMENTS FOR E-CIGARETTE MANUFACTURER,
DISTRIBUTOR, AND RETAILER
Sec. 161.801. DEFINITIONS. In this subchapter:
(1) "Distributor" means a person who:
(A) distributes, sells, barters, or exchanges an
e-cigarette in this state for the purpose of resale; or
(B) purchases an e-cigarette directly from a
manufacturer or distributor for the purpose of resale in this
state.
(2) "E-cigarette" has the meaning assigned by Section
161.081.
(3) "Manufacturer" means a person located in this
state who is engaged in manufacturing e-cigarettes.
(4) "Retailer" means a person, other than a
manufacturer or distributor, who in the ordinary course of the
person's business:
(A) acquires any form of an e-cigarette for the
purpose of resale to the consumer; and
(B) transfers an e-cigarette to another person
for money or other consideration.
Sec. 161.802. PERMIT REQUIRED. (a) A manufacturer or
retailer may not sell an e-cigarette in this state unless the
manufacturer or retailer holds a permit issued by the commission in
accordance with this subchapter.
(b) A distributor may not distribute an e-cigarette in this
state unless the distributor holds a permit issued by the
commission in accordance with this subchapter.
(c) A person must hold a separate permit for each facility
or location operated by the person for which a permit is required
under this section.
Sec. 161.803. APPLICATION; FEE. (a) An applicant for a
manufacturer, distributor, or retailer permit under this
subchapter shall submit to the commission:
(1) an application on a form prescribed by commission
rule that includes:
(A) the name, telephone number, and address of
the applicant; and
(B) the name, telephone number, and address of
the manufacturing facility, distribution facility, or retail
location, as applicable, in this state and the person responsible
for the facility or location;
(2) a nonrefundable application fee in an amount not
to exceed:
(A) $1,000 for a manufacturer applicant;
(B) $500 for a distributor applicant; or
(C) $150 for a retailer applicant; and
(3) any other information the commission determines is
necessary.
(b) The executive commissioner by rule shall set amounts for
the application fees under this section. The amounts may not exceed
the administrative costs incurred by the commission in implementing
this subchapter.
(c) The commission shall deposit a fee received under this
section to the credit of the tobacco and e-cigarette education and
enforcement fund established under Section 161.124.
Sec. 161.804. ISSUANCE OR DENIAL. (a) The commission shall
issue or deny issuance of a permit for an application submitted
under Section 161.803 not later than the 60th day after the date the
commission receives the completed application. The commission
shall issue a permit to an applicant who the commission determines
satisfies the requirements of this subchapter and rules adopted
under this subchapter.
(b) If the commission denies issuance of a permit under
Subsection (a), the commission shall provide written reasons for
the denial to the applicant.
(c) An applicant whose initial application is denied may
reapply without submitting an application fee not later than the
30th day after the date the initial application is denied.
Sec. 161.805. PERMIT EXPIRATION. A permit issued under
this subchapter expires on:
(1) the fifth anniversary of the date the permit is
issued for a manufacturer; or
(2) the first anniversary of the date the permit is
issued for a distributor or retailer.
Sec. 161.806. TRANSFER. A permit holder may not transfer to
another person a permit issued under Section 161.804 unless the
commission approves the transfer. The commission shall approve a
transfer if the transferee satisfies the requirements of this
chapter and rules adopted under this chapter.
Sec. 161.807. UPDATED INFORMATION. If the information
provided in the permit application submitted under Section 161.803
changes, the permit holder shall provide written notice of the
change in the form and manner prescribed by commission rule not
later than the 10th business day after the date of the change.
Sec. 161.808. RECORD REQUIREMENTS. A permit holder shall
retain all e-cigarette invoices for at least two years and make the
invoices available to the commission on request.
Sec. 161.809. ENFORCEMENT. (a) The commission may revoke a
permit of a permit holder who violates this chapter or a rule
adopted under this chapter relating to e-cigarettes.
(b) The commission may impose an administrative penalty
against:
(1) a permit holder who violates this subchapter or a
rule adopted under this subchapter in an amount not to exceed
$10,000 for each day a violation continues; or
(2) a person who violates Section 161.082 in the
amount of:
(A) not less than $1,000 for the first violation;
(B) not less than $5,000 for the second
violation; and
(C) $10,000 for a subsequent violation.
(c) The commission shall deposit a penalty collected under
this section to the credit of the tobacco and e-cigarette education
and enforcement fund established under Section 161.124.
SECTION 8. As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission shall adopt rules necessary to implement this
Act.
SECTION 9. A manufacturer, distributor, or retailer subject
to Subchapter Z, Chapter 161, Health and Safety Code, as added by
this Act, is not required to comply with that subchapter until
January 1, 2020.
SECTION 10. This Act takes effect September 1, 2019.