Texas 2025 - 89th Regular

Texas House Bill HB3772 Compare Versions

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1	1	89R10741 MCF-F
2	2	By: Craddick H.B. No. 3772
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the sale of certain e-cigarettes in this state and a
10	10	directory of e-cigarette manufacturers and their products;
11	11	authorizing fees; authorizing administrative and civil penalties;
12	12	creating a criminal offense.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Chapter 161, Health and Safety Code, is amended
15	15	by adding Subchapter I to read as follows:
16	16	SUBCHAPTER I. E-CIGARETTE DIRECTORY
17	17	Sec. 161.0951. DEFINITIONS. In this subchapter:
18	18	(1) "Directory" means the e-cigarette directory
19	19	maintained by the comptroller under Section 161.0954.
20	20	(2) "Distributor" means a person who:
21	21	(A) receives from a manufacturer e-cigarette
22	22	products for a first sale in this state or otherwise brings or
23	23	causes to be brought into this state e-cigarette products for sale,
24	24	use, or consumption;
25	25	(B) manufactures or produces e-cigarette
26	26	products; or
27	27	(C) ships, transports, or imports into this state
28	28	e-cigarette products manufactured or produced outside the United
29	29	States for a first sale in this state.
30	30	(3) "E-cigarette" has the meaning assigned by Section
31	31	161.081.
32	32	(4) "Retailer" means a person who engages in the sale
33	33	of e-cigarettes to consumers and includes the owner of a
34	34	coin-operated e-cigarette vending machine. The term includes an
35	35	e-cigarette retailer as defined by Section 147.0001.
36	36	(5) "Wholesaler" means a person, including a
37	37	manufacturer's representative, who sells or distributes
38	38	e-cigarettes in this state for resale but who is not a distributor
39	39	or interstate warehouse.
40	40	Sec. 161.0952. APPLICABILITY. This subchapter applies only
41	41	to an e-cigarette that contains nicotine.
42	42	Sec. 161.0953. CERTIFICATION AND FEES. (a) Each
43	43	manufacturer of e-cigarettes sold in this state, whether directly
44	44	or through an importer, distributor, wholesaler, retailer, or
45	45	similar intermediary, shall annually certify under penalty of
46	46	perjury, on a form the comptroller prescribes, that the
47	47	manufacturer agrees to comply with this subchapter and:
48	48	(1) the manufacturer holds for the manufacturer's
49	49	e-cigarettes a marketing authorization or similar order issued by
50	50	the United States Food and Drug Administration under 21 U.S.C.
51	51	Section 387j; or
52	52	(2) the e-cigarette manufactured by the manufacturer
53	53	was marketed in the United States as of August 8, 2016, and the
54	54	manufacturer submitted a premarket tobacco product application for
55	55	the e-cigarette to the United States Food and Drug Administration
56	56	under 21 U.S.C. Section 387j before September 8, 2020, and either:
57	57	(A) the application is under review by the United
58	58	States Food and Drug Administration; or
59	59	(B) a final decision on the application has not
60	60	taken effect.
61	61	(b) Each manufacturer of e-cigarettes shall submit a
62	62	separate certification form under Subsection (a) for each
63	63	e-cigarette product the manufacturer sells in this state.
64	64	(c) A manufacturer required to submit a certification form
65	65	under Subsection (a) shall, at the time of certification, submit to
66	66	the comptroller:
67	67	(1) either, as applicable:
68	68	(A) a copy of the marketing authorization or
69	69	other order for the e-cigarette issued by the United States Food and
70	70	Drug Administration under 21 U.S.C. Section 387j; or
71	71	(B) evidence the premarket tobacco product
72	72	application for the e-cigarette was submitted to the United States
73	73	Food and Drug Administration and a final authorization or order has
74	74	not taken effect; and
75	75	(2) a fee of $2,500.
76	76	(d) A manufacturer required to submit a certification form
77	77	under Subsection (a) shall notify the comptroller not later than
78	78	the 30th day after the date the certification form is submitted of
79	79	any material change to the information included in the
80	80	certification form, including:
81	81	(1) the subsequent issuance or denial of a marketing
82	82	authorization or other order by the United States Food and Drug
83	83	Administration under 21 U.S.C. Section 387j; and
84	84	(2) any other order issued or action taken by the
85	85	United States Food and Drug Administration that affects the ability
86	86	of the e-cigarette to be introduced or delivered into interstate
87	87	commerce for commercial distribution in the United States.
88	88	(e) The form the comptroller prescribes under this section
89	89	must include the brand name, product name, flavor, and category of
90	90	the e-cigarette product certified by the manufacturer.
91	91	(f) The information a manufacturer submits under this
92	92	section is exempt from disclosure under Chapter 552, Government
93	93	Code. A manufacturer may redact certain confidential commercial or
94	94	financial information on the documents required under Subsection
95	95	(c).
96	96	Sec. 161.0954. E-CIGARETTE DIRECTORY. (a) The comptroller
97	97	shall maintain a directory listing all e-cigarette manufacturers
98	98	and e-cigarettes, including the brand name, product name, flavor,
99	99	and category of e-cigarette product, for which the required forms,
100	100	fees, and certifications have been submitted to the comptroller
101	101	under Section 161.0953.
102	102	(b) The comptroller shall post the directory on the
103	103	comptroller's publicly accessible Internet website and update the
104	104	directory monthly to comply with this subchapter.
105	105	(c) The comptroller shall establish a process by which
106	106	importers, distributors, wholesalers, retailers, and other
107	107	relevant parties may receive notification of directory updates for
108	108	the preceding month.
109	109	Sec. 161.0955. OUT-OF-STATE MANUFACTURERS AND IMPORTERS.
110	110	(a) A manufacturer not registered to conduct business in this state
111	111	must designate and continually engage the services of a registered
112	112	agent in this state.
113	113	(b) A manufacturer not located in the United States may only
114	114	employ or contract with an importer who designates a registered
115	115	agent in this state whose services the importer continually
116	116	engages.
117	117	(c) A manufacturer described by Subsection (a) or (b) must
118	118	provide to the comptroller any information the comptroller requests
119	119	about the registered agent designated by the manufacturer or the
120	120	manufacturer's importer, as applicable, including the agent's name,
121	121	address, and telephone number.
122	122	(d) A manufacturer shall provide written notice to the
123	123	comptroller not later than the 30th day before the date the
124	124	manufacturer or the manufacturer's importer, as applicable,
125	125	terminates a registered agent's designation. Not later than the
126	126	fifth day before the date the termination is effective, the
127	127	manufacturer shall provide to the comptroller any information about
128	128	the replacement the comptroller requests, including the name,
129	129	address, and telephone number of the newly appointed registered
130	130	agent.
131	131	(e) If the registered agent terminates an agency
132	132	designation, the manufacturer shall:
133	133	(1) notify the comptroller not later than the fifth
134	134	day after the date of the termination; and
135	135	(2) include proof satisfactory to the comptroller that
136	136	a new agent has been appointed.
137	137	(f) A manufacturer not registered to conduct business in
138	138	this state must file with the comptroller a surety bond or other
139	139	cash security payable to this state in the amount of $25,000. The
140	140	bond must be posted by a corporate surety located in the United
141	141	States. The surety bond or cash security must be conditioned on the
142	142	performance by the manufacturer of all requirements and obligations
143	143	under this subchapter.
144	144	(g) The liability of the surety of a bond described by
145	145	Subsection (f) may not exceed the amount of the bond for the payment
146	146	of fines, penalties, and costs of seizure, destruction, and
147	147	disposal imposed on a manufacturer under this subchapter.
148	148	(h) If payment executed from a bond under Subsection (g) is
149	149	required, the comptroller may require a manufacturer to submit to
150	150	the comptroller an additional bond or cash security.
151	151	(i) The comptroller may not include in the directory a
152	152	manufacturer who has not complied with this section or the
153	153	manufacturer's e-cigarettes.
154	154	Sec. 161.0956. SURETY RELEASE FROM LIABILITY. (a) The
155	155	comptroller shall release and discharge from liability to this
156	156	state a surety on a bond a manufacturer furnishes in accordance with
157	157	Section 161.0955 on the 60th day after the date the surety company
158	158	files with the comptroller a written request to be released and
159	159	discharged.
160	160	(b) A request described by Subsection (a) does not relieve,
161	161	release, or discharge the surety company from a liability accrued
162	162	before expiration of the 60 days.
163	163	(c) The comptroller, promptly on receipt of the request
164	164	under Subsection (a), shall notify the manufacturer who furnished
165	165	the bond that unless the manufacturer, before the expiration date
166	166	of the existing security, files with the comptroller a new bond with
167	167	a surety company located in the United States, or other authorized
168	168	security, in the amount required by Section 161.0955, the
169	169	comptroller shall remove the manufacturer and the manufacturer's
170	170	e-cigarettes from the directory.
171	171	Sec. 161.0957. EXCLUSION AND REMOVAL FROM DIRECTORY. (a)
172	172	The comptroller may not include or retain in the directory a
173	173	manufacturer or a specific e-cigarette produced by that
174	174	manufacturer if the manufacturer:
175	175	(1) failed to provide a complete and accurate
176	176	certification form, including the fee, required under Section
177	177	161.0953 with respect to an e-cigarette;
178	178	(2) sold an e-cigarette in this state for which either
179	179	the e-cigarette or the manufacturer was not certified in accordance
180	180	with this subchapter; or
181	181	(3) provided in the manufacturer's certification form
182	182	or other submitted documents information the comptroller
183	183	determined to be false or to contain a material misrepresentation
184	184	or omission.
185	185	(b) The comptroller may not remove a manufacturer or
186	186	specific e-cigarette from the directory for a reason described by
187	187	Subsection (a) unless:
188	188	(1) the comptroller provides to the manufacturer
189	189	notice that the manufacturer or an e-cigarette produced by the
190	190	manufacturer will be removed from the directory if the manufacturer
191	191	fails to cure the deficiencies; and
192	192	(2) the manufacturer fails to cure the deficiencies
193	193	before the 15th day after the date the manufacturer received notice
194	194	under Subdivision (1).
195	195	(c) The comptroller may not remove a manufacturer or
196	196	e-cigarette produced by the manufacturer from the directory before
197	197	the 30th day after the date the comptroller provides the notice
198	198	under Subsection (b)(1).
199	199	(d) Notice provided under Subsection (b)(1) is considered
200	200	sufficient and immediately received if the comptroller sends the
201	201	notice by facsimile or electronically to an e-mail address or
202	202	facsimile number provided by the manufacturer in the manufacturer's
203	203	most recent certification submitted under this subchapter.
204	204	Sec. 161.0958. DIRECTORY LISTING REQUIRED FOR RETAIL SALE
205	205	OF E-CIGARETTES. (a) An importer, distributor, wholesaler,
206	206	retailer, or similar intermediary may not sell in this state at
207	207	retail an e-cigarette not included in the directory.
208	208	(b) A retailer may not sell an e-cigarette that was removed
209	209	from the directory or that is produced by a manufacturer that was
210	210	removed from the directory after the 30th day following the date the
211	211	e-cigarette or manufacturer was removed from the directory.
212	212	Sec. 161.0959. DISPOSITION OF PROHIBITED E-CIGARETTES. (a)
213	213	An e-cigarette intended for sale or distribution in this state that
214	214	is not included in the directory is subject to seizure,
215	215	destruction, and disposal. The importer, distributor, wholesaler,
216	216	retailer, or similar intermediary from whom the e-cigarette is
217	217	seized is responsible for the cost of the seizure, destruction, and
218	218	disposal.
219	219	(b) An e-cigarette intended for sale or distribution in this
220	220	state that was removed from the directory or that was certified by a
221	221	manufacturer that was removed from the directory is subject to
222	222	seizure, destruction, and disposal after the 30th day following the
223	223	date on which the e-cigarette or manufacturer was removed from the
224	224	directory. The importer, distributor, wholesaler, retailer, or
225	225	similar intermediary from whom the e-cigarette is seized is
226	226	responsible for the cost of the seizure, destruction, and disposal.
227	227	Sec. 161.0960. AUDITS. (a) The comptroller shall provide
228	228	for two annual random audits of each importer, distributor,
229	229	wholesaler, and retailer who sells or distributes e-cigarettes in
230	230	this state to ensure compliance with this subchapter. The
231	231	comptroller shall provide for a subsequent audit not later than the
232	232	30th day after the date on which an importer, distributor,
233	233	wholesaler, or retailer was audited and determined not to be in
234	234	compliance with this subchapter.
235	235	(b) The comptroller shall annually publish the results of
236	236	the audits on the comptroller's Internet website.
237	237	Sec. 161.0961. CIVIL PENALTIES. (a) An importer,
238	238	distributor, wholesaler, retailer, or similar intermediary who
239	239	violates Section 161.0958 is subject to a civil penalty in an
240	240	amount:
241	241	(1) for a first violation, equal to $1,000 for each
242	242	individual e-cigarette sold or offered for sale;
243	243	(2) for a second violation occurring before the first
244	244	anniversary of the date of the first violation, not less than $1,250
245	245	and not more than $1,500 for each individual e-cigarette sold or
246	246	offered for sale; and
247	247	(3) for a third or subsequent violation occurring
248	248	before the first anniversary of the date of the first violation, not
249	249	less than $1,750 and not more than $2,000 for each individual
250	250	e-cigarette sold or offered for sale.
251	251	(b) A manufacturer who causes an e-cigarette removed from or
252	252	not included in the directory to be sold or offered for sale in this
253	253	state, whether directly or through an importer, distributor,
254	254	wholesaler, retailer, or similar intermediary is subject to a civil
255	255	penalty in an amount equal to $10,000 for each individual
256	256	e-cigarette sold or offered for sale in violation of Section
257	257	161.0958.
258	258	(c) The attorney general may bring an action to recover a
259	259	civil penalty imposed under this section.
260	260	(d) The attorney general may recover reasonable attorney's
261	261	fees and other reasonable expenses incurred in investigating and
262	262	bringing an action under this section.
263	263	Sec. 161.0962. DECEPTIVE TRADE PRACTICE. A violation of
264	264	Section 161.0958 is a deceptive trade practice under Subchapter E,
265	265	Chapter 17, Business & Commerce Code, and is actionable under that
266	266	subchapter.
267	267	Sec. 161.0963. ADMINISTRATIVE SANCTIONS. (a) The
268	268	comptroller shall suspend for a period of 30 days the permit,
269	269	registration, certificate, or other authority of an importer,
270	270	distributor, wholesaler, retailer, or similar intermediary who
271	271	violates Section 161.0958 a second time before the first
272	272	anniversary of the date of the first violation.
273	273	(b) The comptroller shall revoke the permit, registration,
274	274	certificate, or other authority of an importer, distributor,
275	275	wholesaler, retailer, or similar intermediary who violates Section
276	276	161.0958 a third time before the first anniversary of the date of
277	277	the first violation.
278	278	Sec. 161.0964. CRIMINAL OFFENSE. A manufacturer commits an
279	279	offense if the manufacturer falsely represents information on a
280	280	certification form under Section 161.0953. An offense under this
281	281	section is a Class B misdemeanor.
282	282	Sec. 161.0965. FEES COLLECTED. A fee or civil penalty the
283	283	comptroller collects under this subchapter may be used only for the
284	284	administration and enforcement of this subchapter.
285	285	Sec. 161.0966. REPORT TO LEGISLATURE. The comptroller
286	286	shall prepare and submit to the legislature not later than
287	287	September 1 of each year a report that contains:
288	288	(1) the current status of the directory, including the
289	289	dates of the initial and updated versions;
290	290	(2) issues related to updating the directory;
291	291	(3) revenue received and expenses incurred in
292	292	administering this subchapter;
293	293	(4) enforcement activities taken in accordance with
294	294	this subchapter; and
295	295	(5) the most recent version of the directory.
296	296	Sec. 161.0967. RULES. The comptroller shall adopt rules
297	297	necessary to implement this subchapter.
298	298	SECTION 2. (a) Notwithstanding Section 161.0953, Health and
299	299	Safety Code, as added by this Act, a manufacturer is not required to
300	300	comply with the requirements of that section until September 15,
301	301	2025.
302	302	(b) Notwithstanding Section 161.0954, Health and Safety
303	303	Code, as added by this Act, the comptroller of public accounts is
304	304	not required to maintain the directory until November 1, 2025.
305	305	(c) Notwithstanding Section 161.0958, Health and Safety
306	306	Code, as added by this Act, an importer, distributor, wholesaler,
307	307	retailer, or similar intermediary is not required to comply with
308	308	the requirements of that section until January 1, 2026.
309	309	(d) Notwithstanding Section 161.0966, Health and Safety
310	310	Code, as added by this Act, the comptroller of public accounts is
311	311	not required to submit a report until September 1, 2026.
312	312	SECTION 3. This Act takes effect September 1, 2025.