Bill Text: HI SB63 | 2022 | Regular Session | Introduced

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Bill Title: Relating To Electronic Smoking Devices.

Spectrum: Partisan Bill (Democrat 16-0)

Status: (Introduced - Dead) 2021-12-10 - Carried over to 2022 Regular Session. [SB63 Detail]

Download: Hawaii-2022-SB63-Introduced.html

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THE SENATE	S.B. NO.	63
THIRTY-FIRST LEGISLATURE, 2021
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to electronic smoking devices.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that tobacco use remains the leading cause of preventable disease and death in the United States and in Hawaii.  Tobacco use and nicotine addiction is a serious public health problem that results in loss of life and financial burdens on society and the healthcare system.  Each year, tobacco use costs approximately $170,000,000,000 in direct health care expenditures and $156,000,000,000 in lost productivity around the nation.  The legislature further finds that all tobacco products are addictive and inherently dangerous, including electronic smoking devices, also known as e-cigarettes, capable of delivering nicotine, flavor, and other chemicals inhaled by the user.

     The legislature has determined that comprehensive regulatory action on tobacco products in Hawaii is necessary to reduce tobacco-related health disparities and end the youth vaping epidemic.  The legislature has a substantial interest in reducing the number of individuals of all ages who use tobacco products, protecting adolescents from tobacco dependence and nicotine addiction, and reducing the illnesses and premature death associated with tobacco use.

     The legislature further finds that while there has been a decline in the use of combustible cigarettes over the last decade, there has been a dramatic increase in the use of electronic smoking devices by Hawaii's youth.  Results from the 2019 Youth Risk Behavior Survey released by the Centers for Disease Control and Prevention showed an increase in youth e‑cigarette use among high school students in Hawaii.  Nearly one in three high school students, or roughly thirty-one per cent used e‑cigarettes in the last thirty days, an increase from 25.5 per cent in 2017.  Additionally, the percentage of frequent high school users doubled from 5.1 per cent in 2017 to 10.4 per cent in 2019, and daily e-cigarette use has more than doubled from 3.5 per cent in 2017 to 7.9 per cent in 2019.

     Current use of electronic smoking devices by county reveals an even more troubling situation, with 2017 figures exceeding thirty per cent on the islands of Hawaii, Maui, and Kauai.  These rates are higher than the national average, demonstrating a disturbing trend of youth nicotine use in Hawaii, and threaten to undermine the benefits derived from the decline in combustible cigarette use that has been achieved.

     The popularity of electronic cigarettes among youth is especially concerning because these products contain nicotine.  The United States Surgeon General noted in the 2016 report titled "E-Cigarette Use Among Youth and Young Adults" that "[b]ecause the adolescent brain is still developing, nicotine use during adolescence can disrupt the formation of brain circuits that control attention, learning, and susceptibility to addiction."

     Use of an electronic smoking device also puts the user at risk for lung injury and even death.  In 2019, the Centers for Disease Control sounded the alarm on the national outbreak of e‑cigarette, or vaping, product use-associated lung injury (EVALI).  As of February 18, 2020, a total of 2,807 EVALI cases and sixty-eight deaths were reported nationwide.  In 2019, the Hawaii state department of health confirmed four local cases of EVALI.  A recent 2020 Stanford study has also determined that teenagers and young adults who used e-cigarettes were five times more likely to be diagnosed with COVID-19 than nonusers.  Those who had used both e-cigarettes and conventional cigarettes were almost seven times more likely to be diagnosed with coronavirus disease 2019.

     The legislature further finds that a significant driver to increased youth use of electronic smoking devices is the availability of flavored tobacco products.  While the Family Smoking Prevention and Tobacco Control Act of 2009 prohibited characterizing flavors, including fruit and candy flavorings, in cigarettes, it did not ban the use of characterizing flavors in other tobacco products, such as electronic smoking devices.

     Adding flavoring to tobacco changes the taste and reduces the harshness of the otherwise unflavored tobacco product, making smoking more appealing and easier for beginners to try and become addicted.  According to a recent survey, eighty-one per cent of youth and eighty-six per cent who have ever used a tobacco product reported that the first tobacco product they used was flavored.

     The legislature additionally finds that young people are disproportionately using flavored tobacco products including menthol.  In 2010, seventy-eight per cent of Native Hawaiians and pacific islanders and forty-two per cent of white adult smokers consume menthol cigarettes.  By 2050, conservative estimates suggest that over three hundred thousand deaths can be averted if it were not for menthol cigarette smoking.

     Given the significant threat to public health posed by electronic smoking devices, the legislature has introduced numerous policies and practices to subject electronic smoking devices to the same regulations as cigarettes, including removing flavored products, establishing a tobacco tax on e‑cigarettes, requiring retail licensure, and restricting online sales.  The legislature also notes that while twenty-five states have placed taxes on e-cigarettes, Hawaii currently levies no state tobacco tax on e-cigarettes and that prices of e-cigarette products are often lower than cigarettes, even though their use carries similar health risks.  Research has shown that increasing the price of tobacco products, such as through cigarette taxes, is a proven intervention that reduces the rate of smoking by adult and youth smokers.  The legislature concludes that comprehensive regulatory action on e-cigarettes in Hawaii is necessary to reduce tobacco-related health disparities and end the youth vaping epidemic.

     Accordingly, the purpose of this Act is to:

     (1)  Make unlawful the sale of flavored tobacco products, mislabeling of e-liquid products containing nicotine, and sale of tobacco products other than through retail sales via in-person exchange;

     (2)  Include e-liquid and electronic smoking devices in the definition of "tobacco products" for purposes of the cigarette tax and tobacco tax law;

     (3)  Increase the license fee for wholesalers and dealers of tobacco products and retail tobacco permit fee;

     (4)  Require retailers to pay an additional excise tax on the gross receipts from the retail sale of electronic smoking devices on and after July 1, 2021;

     (5)  Direct a certain percentage of moneys received from the cigarette tax and tobacco tax to the Hawaii tobacco prevention and control trust fund to establish and fund a comprehensive youth tobacco cessation program;

     (6)  Repeal the electronic smoking device retailer registration unit; and

     (7)  Repeal provisions relating to delivery of sales under the cigarette tax and tobacco tax law.

     This Act shall be known and may be cited as the Reversing the Youth Tobacco Epidemic Act of 2021.

     SECTION 2.  Chapter 712, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:

     "§712-    Sale of tobacco products; flavored; nicotine-free; remote retail sales.  (1)  Beginning July 1, 2021, it shall be unlawful for any retailer or any agents or employees of the retailer to:

     (a)  Sell, offer for sale, or possess with the intent to sell or offer for sale, a flavored tobacco product or e-liquid;

     (b)  Mislabel as nicotine-free, or sell or market for sale  as nicotine-free, any e-liquid product that contains nicotine; and

     (c)  Have tobacco products, including electronic smoking devices, e-liquid, and electronic smoking device accessories delivered or sold to end consumers other than through retail sales through a direct, face-to-face, or over-the-counter exchange between a licensed retailer and a consumer at a tobacco retail location.  This restriction includes a prohibition on sales performed through mail, curbside pickup, or delivery anywhere outside a licensed retail location.

     (2)  A statement or claim directed to consumers or the public that a tobacco product is flavored shall be prima facie evidence that the tobacco product is a flavored tobacco product; provided that the statement or claim may include but not be limited to text, color, or images on the tobacco product's labeling or packaging that is used to explicitly or implicitly communicate that the tobacco product has a flavor other than tobacco made by a manufacturer or an agent or employee of the manufacturer in the course of the person's agency or employment.

     (3)  Any flavored tobacco product found in a retailer's possession that is in violation of this section shall be considered contraband, promptly seized, subject to immediate forfeiture and destruction or disposal as hazardous waste, and shall not be subject to the procedures set forth in chapter 712A.

     (4)  Any retailer who violates this section shall be punished as follows:

     (a)  For the first offense, a fine of $1,000;

     (b)  For the second offense, a fine of $2,000; and

     (c)  For a third and subsequent offense, a fine of $5,000.

All fines shall be paid to the department of health and deposited into the Hawaii tobacco prevention and control trust fund established pursuant to section 328L-5.  Retailers shall be responsible for all costs associated with disposing of their confiscated product found to be in violation of this section.

     (5)  Notwithstanding any other law to the contrary, any county may adopt a rule or ordinance that places greater restrictions on the access to tobacco or electronic smoking device products than provided for in this section.  In the case of a conflict between the restrictions in this section and any county rule or ordinance, the more stringent restrictions shall prevail.

     (6)  For the purposes of this section:

     "Distinguishable" means perceivable by either the sense of smell or taste.

     "Electronic smoking device" has the same meaning as defined in section 712-1258(7).

     "E-liquid" means any liquid or like substance, which may or may not contain nicotine, that is capable of being used in an electronic smoking device, whether or not packaged in a cartridge or other container.

     "Flavored tobacco product" means any tobacco product that contains a taste or smell, other than the taste or smell of tobacco, that is distinguishable by an ordinary consumer either prior to, or during the consumption of, a tobacco product, including but not limited to any taste or smell relating to fruit, menthol, mint, wintergreen, chocolate, cocoa, vanilla, honey, molasses, or any candy, dessert, alcoholic beverage, herb, or spice.

     "Labeling" means written, printed, pictorial, or graphic matter upon a tobacco product or any of its packaging.

     "Packaging" means a pack, box, carton, or container of any kind, or if no other container, wrapping, including cellophane, in which a tobacco product is sold or offered for sale to a consumer.

     "Retailer" means an entity that sells, offers for sale, or exchanges or offers to exchange for any form of consideration tobacco products or e-liquids to consumers.  "Retailer" includes the owner of a tobacco retail location.

     "Tobacco product" means any:

     (a)  Product containing, made of, or derived from tobacco or nicotine that is intended for human consumption or is likely to be consumed, whether inhaled, absorbed, or ingested by any other means, including but not limited to a cigarette, cigar, pipe tobacco, chewing tobacco, snuff, or snus;

     (b)  Electronic smoking device and any substances that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine; or

     (c)  Component, part, or accessory of paragraph (a) or (b), whether or not any of these contains tobacco or nicotine, including but not limited to filters, rolling papers, blunt or hemp wraps, hookahs, and pipes.

"Tobacco product" does not include drugs, devices, or combination products authorized for sale by the United States Food and Drug Administration; as those terms are defined in the Federal Food, Drug, and Cosmetic Act; medical cannabis, or manufactured cannabis products under chapter 329D.

     "Tobacco retail location" means any premises where tobacco products are sold or distributed to a consumer, including but not limited to any store, bar, lounge, cafe, vending machine, or structure."

     SECTION 3.  Section 245-1, Hawaii Revised Statutes, is amended as follows:

     1.  By adding three new definitions to be appropriately inserted and to read:

     ""E-liquid" means any liquid or like substance, which may or may not contain nicotine, that is capable of being used in an electronic smoking device, whether or not packaged in a cartridge or other container.  "E-liquid" does not include drugs, devices, or a combination of products approved for sale by the United States Food and Drug Administration as those terms are defined in the Federal Food, Drug, and Cosmetic Act; medical cannabis; or manufactured cannabis products under chapter 329D, including devices uses to aerosolize, inhale, or ingest manufactured cannabis products manufactured or distributed in accordance with section 329D-10(a).

     "Electronic smoking device" means any electronic product, or part thereof, whether for one-time use or reusable that can be used to deliver nicotine or another substance to a person inhaling from the device including but not limited to electronic cigarettes, electronic cigars, electronic cigarillos, electronic pipes, vaping pens, hookah pens, and other similar devices that rely on vaporization or aerosolization, and any cartridge or component part of the device or product.  "Electronic smoking device" includes any liquid or gel capable of use in such electronic device that can be used by a person to simulate smoking in the delivery of nicotine or any other substance, intended for human consumption, through inhalation of vapor or aerosol from the product.  "Electronic smoking device" does not include:

     (1)  Cigarettes;

     (2)  A product that has been approved by the United States Food and Drug Administration for the sale of or use as a tobacco cessation product or for other medical purposes and is marketed and sold or prescribed exclusively for that approved purpose;

     (3)  Prescription drugs;

     (4)  Medical cannabis or manufactured cannabis products under chapter 329D; and

     (5)  Medical devices used to aerosolize, inhale, or ingest prescription drugs, including manufactured cannabis products manufactured or distributed in accordance with section 329D-10(a).

     "Smoke" or "smoking" means inhaling, exhaling, burning, carrying, or possessing any activated, lighted, or heated tobacco product, plant product, or any similar substance intended for human consumption or inhalation, including the use of an electronic smoking device."

     2.  By amending the definition of "tobacco products" to read:

     ""Tobacco products" means [tobacco]:

     (1)  Tobacco in any form, other than cigarettes or little cigars[, that is prepared or intended for consumption or for personal use by humans, including large cigars and any substitutes thereof other than cigarettes that bear the semblance thereof, snuff, chewing or smokeless tobacco, and smoking or pipe tobacco.]; or

     (2)  Electronic smoking devices.

"Tobacco products" includes but is not limited to large cigars and any substitutes thereof other than cigarettes that bear the semblance thereof, pipe tobacco, chewing or smokeless tobacco, snuff, snus, e-liquid, electronic smoking devices containing e-liquid, and components or parts containing e-liquid."

     SECTION 4.  Section 245-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The license shall be issued by the department upon application therefor, in such form and manner as shall be required by rule of the department, and the payment of a fee of [$2.50,] $2,500, and shall be renewable annually on July 1 for the twelve months ending the succeeding June 30."

     SECTION 5.  Section 245-2.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The retail tobacco permit shall be issued by the department upon application by the retailer in the form and manner prescribed by the department, and the payment of a fee of [$20.] $100.  Permits shall be valid for one year, from December 1 to November 30, and renewable annually.  Whenever a retail tobacco permit is defaced, destroyed, or lost, or the permittee relocates the permittee's business, the department may issue a duplicate retail tobacco permit to the permittee for a fee of $5 per copy."

     SECTION 6.  Section 245-3, Hawaii Revised Statutes, is amended to read as follows:

     "§245-3  Taxes.  (a)  Every wholesaler or dealer, in addition to any other taxes provided by law, shall pay for the privilege of conducting business and other activities in the State:

     (1)  An excise tax equal to 5.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 1998, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (2)  An excise tax equal to 6.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after September 30, 2002, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (3)  An excise tax equal to 6.50 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2003, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (4)  An excise tax equal to 7.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2004, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (5)  An excise tax equal to 8.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2006, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (6)  An excise tax equal to 9.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2007, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (7)  An excise tax equal to 10.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2008, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (8)  An excise tax equal to 13.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after July 1, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (9)  An excise tax equal to 11.00 cents for each little cigar sold, used, or possessed by a wholesaler or dealer on and after October 1, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

    (10)  An excise tax equal to 15.00 cents for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2010, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

    (11)  An excise tax equal to 16.00 cents for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2011, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

    (12)  An excise tax equal to seventy per cent of the wholesale price of each article or item of tobacco products, other than large cigars, sold by the wholesaler or dealer on and after September 30, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer; and

    (13)  An excise tax equal to fifty per cent of the wholesale price of each large cigar of any length, sold, used, or possessed by a wholesaler or dealer on and after September 30, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer.

Where the tax imposed has been paid on cigarettes, little cigars, or tobacco products that thereafter become the subject of a casualty loss deduction allowable under chapter 235, the tax paid shall be refunded or credited to the account of the wholesaler or dealer.  The tax shall be applied to cigarettes through the use of stamps.

     (b)  Every retailer, in addition to any other taxes provided by law, shall pay for the privilege of conducting business and other activities in the State an excise tax equal to seventy per cent of the gross proceeds from the retail sale of each electronic smoking device sold on and after July 1, 2021; provided that the tax imposed under this subsection shall not be subject to the limitations on tax described in subsection (c)(3) with respect to persons and amounts previously taxed.

     [(b)] (c)  The taxes, however, are subject to the following limitations:

     (1)  The measure of the taxes shall not include any cigarettes or tobacco products exempted, and so long as the same are exempted, from the imposition of taxes by the Constitution or laws of the United States;

     (2)  The measure of taxes shall exempt and exclude all sales of cigarettes and tobacco products to the United States (including any agency or instrumentality thereof that is wholly owned or otherwise so constituted as to be immune from the levy of a tax under this chapter), sold by any person licensed under this chapter; and

     (3)  The taxes shall be paid only once with respect to the same cigarettes or tobacco product.  This limitation shall not prohibit the imposition of the excise tax on receipts from sales of tobacco products under subsection (a)(5); provided that the amount subject to the tax on each sale shall not include amounts previously taxed under this chapter."

     SECTION 7.  Section 245-15, Hawaii Revised Statutes, is amended to read as follows:

     "§245-15  Disposition of revenues.  All moneys collected pursuant to this chapter shall be paid into the state treasury as state realizations to be kept and accounted for as provided by law; provided that, of the moneys collected under the tax imposed pursuant to:

     (1)  Section 245-3(a)(5), after September 30, 2006, and prior to October 1, 2007, 1.0 cent per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

     (2)  Section 245-3(a)(6), after September 30, 2007, and prior to October 1, 2008:

          (A)  1.5 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

          (B)  0.25 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

          (C)  0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

     (3)  Section 245-3(a)(7), after September 30, 2008, and prior to July 1, 2009:

          (A)  2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

          (B)  0.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

          (C)  0.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

          (D)  0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

     (4)  Section 245-3(a)(8), after June 30, 2009, and prior to July 1, 2013:

          (A)  2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

          (B)  0.75 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

          (C)  0.75 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

          (D)  0.5 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234;

     (5)  Section 245-3(a)(11), after June 30, 2013, and prior to July 1, 2015:

          (A)  2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

          (B)  1.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

          (C)  1.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

          (D)  1.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234; [and]

     (6)  Section 245-3(a)(11), after June 30, 2015, and thereafter:

          (A)  2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

          (B)  1.125 cents per cigarette, but not more than $7,400,000 in a fiscal year, shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

          (C)  1.25 cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

          (D)  1.25 cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234[.]; and

     (7)  Section 245-3(b), after June 30, 2021, and thereafter       per cent of the taxes accumulated shall be deposited to the credit of the Hawaii tobacco prevention and control trust fund established pursuant to section 328L-5, to establish a comprehensive youth tobacco cessation program to fund health education, prevention, and nicotine cessation programs about the risks and dangers of the use of electronic smoking devices for youth.

The department shall provide an annual accounting of these dispositions to the legislature."

     SECTION 8.  Section 245-16, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  This section shall not apply to the shipment of cigarettes if any of the following conditions are met:

     (1)  The cigarettes are exempt from taxes as provided by section [245-3(b)] 245-3(c) or are otherwise exempt from the applicability of this chapter as provided by section 245-62;

     (2)  All applicable Hawaii taxes on the cigarettes are paid in accordance with the requirements of this chapter; or

     (3)  The person or entity engaged in the business of selling, advertising, or offering cigarettes for sale and transfer or shipment:

          (A)  Has fully complied with all of the requirements of chapter 10A (commencing with section 375) of title 15 of the United States Code, otherwise known as the Jenkins Act; and

          (B)  Includes on the outside of the shipping container an externally visible and easily legible notice located on the same side of the shipping container as the address to which the shipping container is delivered stating as follows:

              "CIGARETTES:  HAWAII LAW PROHIBITS THE SALE OF CIGARETTES TO INDIVIDUALS UNDER TWENTY-ONE YEARS OF AGE AND REQUIRES THE PAYMENT OF ALL APPLICABLE TAXES.  YOU ARE LEGALLY RESPONSIBLE FOR ALL APPLICABLE UNPAID TAXES ON THESE CIGARETTES.""

     SECTION 9.  Section 245-22.5, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

     "(d)  This section shall not apply to cigarettes that are exempt from taxes as provided by section [245-3(b).] 245-3(c)."

     SECTION 10.  Section 245-39, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a) Sections 245-37 and 245-38 shall not apply to cigarettes that are exempt from taxes as provided by section [245-3(b).] 245-3(c)."

     SECTION 11.  Section 328L-5, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  There is established the Hawaii tobacco prevention and control trust fund as a separate fund of a nonprofit entity having a board of directors and qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, into which shall be deposited moneys received as provided under [section] sections 245-15(7) and 328L-2(b)(2).  The director of health with the concurrence of the governor, shall select, in accordance with law, the entity based upon the proven record of accomplishment of the entity in administering a similar trust fund."

     2.  By amending subsection (c) to read:

     "(c)  The entity selected under subsection (a), for each fiscal year, may expend up to fifty per cent of the total market value of the Hawaii tobacco prevention and control trust fund on the preceding June 30, for tobacco prevention and control, including but not limited to[,] establishing and funding a comprehensive youth tobacco cessation program pursuant to section 245-15(7), reducing cigarette smoking and tobacco use among youth and adults through education and enforcement activities, and controlling and preventing chronic diseases where tobacco is a risk factor."

     SECTION 12.  Section 712-1258, Hawaii Revised Statutes, is amended by amending subsection (6) to read as follows:

     "(6)  Any person who violates subsection (1) or (4), or both, shall be fined $500 for the first offense.  Any subsequent offenses shall subject the person to a fine not less than $500 nor more than $2,000.  Any person under twenty-one years of age who violates subsection (5) [shall be]:

    (a)   For the first offense, shall:

          (i)  Be fined $10 for the first offense[.  Any];

         (ii)  Complete a tobacco education program or a tobacco use cessation program approved by the director of health or;

        (iii)  Perform three hours of community service during hours when the person is not employed and is not attending school; and

    (b)   For any subsequent offense, shall [subject the violator]:

          (i)  Be subject to a fine of $50, no part of which shall be suspended[,]; or [the person shall be required to perform]

         (ii)  Perform not less than forty-eight hours nor more than seventy-two hours of community service during hours when the person is not employed and is not attending school.

     Any tobacco product or electronic smoking device, as those terms are defined in subsection (7), in the person's possession at the time of violation of subsection (5) shall be seized, summarily forfeited to the State, and destroyed by law enforcement following the conclusion of an administrative or judicial proceeding finding that a violation of subsection (5) has been committed.  The procedures set forth in chapter 712A shall not apply to this subsection."

     SECTION 13.  Chapter 28, part XII, Hawaii Revised Statutes, is repealed.

     SECTION 14.  Section 245-17, Hawaii Revised Statutes, is repealed.

     ["[§245-17]  Delivery sales.  (a)  No person shall conduct a delivery sale or otherwise ship or transport, or cause to be shipped or transported, any electronic smoking device in connection with a delivery sale to any person under the age of twenty-one.

     (b)  A person who makes delivery sales shall not accept a purchase or order from any person without first obtaining the full name, birth date, and address of that person and verifying the purchaser's age by:

     (1)  An independently operated third-party database or aggregate of databases that are regularly used by government and businesses for the purpose of age and identity verification and authentication;

     (2)  Receiving a copy of a government issued identification card from the purchaser; or

     (3)  Requiring age and signature verification in the shipment process and upon and before actual delivery.

     (c)  The purchaser shall certify their age before completing the purchaser's order.

     (d)  Any person who violates this section shall be fined $500 for the first offense.  Any subsequent offenses shall subject the person to a fine of no less than $500 but no more than $2,000.  Any person under twenty-one years of age who violates this section shall be fined $10 for the first offense; provided that any subsequent offense shall subject the person to a fine of $50, no part of which shall be suspended, or the person shall be required to perform no less than forty-eight hours but no more than seventy-two hours of community service during hours when the person is not employed or attending school.

     (e)  The department shall not adopt rules prohibiting delivery sales.

     (f)  For the purposes of this section:

     "Delivery sale" means any sale of an electronic smoking device to a purchaser in the State where either:

     (1)  The purchaser submits the order for sale by means of a telephonic or other method of voice transmission, the mail or any other delivery service, or the internet or other online service; or

     (2)  The electronic smoking device is delivered by use of the mail or any other delivery service.

The foregoing sales of electronic smoking devices shall constitute a delivery sale regardless of whether the seller is located within or without the State.

     "Electronic smoking device" means any electronic product that can be used to aerosolize and deliver nicotine or other substances to the person inhaling from the device, including but not limited to an electronic cigarette, electronic cigar, electronic cigarillo, or electronic pipe, and any cartridge or other component of the device or related product."]

     SECTION 15.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 16.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 17.  This Act shall take effect on July 1, 2021.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Flavored Tobacco Products; Cigarette Tax and Tobacco Tax; Retail Sale; Electronic Smoking Device; Tobacco Products; Hawaii Tobacco Prevention and Control Trust Fund; Comprehensive Youth Tobacco Cessation Program

 

Description:

Makes unlawful the sale of flavored products for electronic smoking devices, mislabeling of e-liquid products containing nicotine, and sale of tobacco products other than through retail sales via in-person exchange.  Establishes penalties.  Includes e-liquid and electronic smoking devices in the definition of "tobacco products" for purposes of the cigarette tax and tobacco tax law.  Increases the license fee for wholesalers and dealers of tobacco products and retail tobacco permit fee.  Requires retailers to pay an additional excise tax on the retail price of electronic smoking devices on and after 7/1/2021.  Directs a certain percentage of moneys received from the cigarette tax and tobacco tax to the Hawaii tobacco prevention and control trust fund to establish and fund a comprehensive youth tobacco cessation program.  Requires a person under twenty-one years of age who unlawfully purchases or possesses tobacco products, including electronic smoking devices, to complete a tobacco education or use cessation program or perform community service for a first offense.  Repeals the electronic smoking device retailer registration unit.  Repeals provisions relating to delivery of sales under the cigarette tax and tobacco tax law.

 

 

 

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