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ARIZONA HOUSE OF REPRESENTATIVESFifty-sixth Legislature Second Regular Session |
Senate: FICO DP 5-2-0-0; 3rd Read 20-8-2-0 |
SB 1365: state agencies; cash payment; acceptance
S/E: vapor products; sale; directory
Sponsor: Senator Bolick, LD 2
Committee on Ways & Means
Summary of the Strike-Everything Amendment to SB 1365
Overview
Requires manufacturers of vapor products sold in Arizona to be certified by the Attorney General (AG). Establishes a directory administered by the AG of vapor products approved for sale and the Vapor Product Fund (Fund). Outlines processes and procedures regarding the certification process, the directory, violations, investigations and nonresident or foreign manufacturers.
History
The U.S. Food and Drug Administration (FDA) regulates the manufacture, import, packaging, labeling, advertising, promotion, sale and distribution of electronic nicotine distribution systems (ENDS), including components and parts of ENDS but excluding accessories. Regulated components and parts of ENDS include e-liquids, a glass or plastic vial container of e-liquid, cartridges, atomizers, cartomizers and clearomizers, certain batteries, digital display or lights to adjust settings, tank systems, drip tips or mouthpieces, flavorings for ENDS and programmable software (FDA).
The AG is required to be the legal advisor of the departments of Arizona, render such legal services as the departments require and to establish administrative and operational policies and procedures within their department. Except as otherwise provided by law, the AG may 1) employ and assign assistant attorneys general and other employees necessary to perform the functions of the department; 2) compromise or settle any action or claim against Arizona or any department, board or agency of Arizona; and 3) charge reasonable fees for distributing official publications, including AG legal opinions and the Arizona agency handbook (A.R.S. § 41-192).
Provisions
Certification Form
1.
Requires each manufacturer of
vapor products sold in Arizona, whether directly or indirectly through a
distributor, retailer or similar intermediary, to certify under penalty of
perjury to the AG by August 1, 2024, and annually thereafter, that:
a) the manufacturer has received a marketing authorization or similar order for the vapor product from the FDA; or
b) the vapor product was marketed in the U.S. on or before August 8, 2016, the manufacturer submitted a premarket tobacco product application for the vapor product to the FDA on or before September 9, 2020, and the application either remains under review by the FDA or a final decision on the application has not taken effect. (Sec. 1)
2. Prescribes the certification form to require a manufacturer to separately list each vapor product that the manufacturer sells in Arizona. (Sec. 1)
3. Requires each annual certification form to be accompanied by:
a) a copy of the marketing authorization or other order for the vapor product issued by the FDA or a copy of the acceptance later issued by the FDA for the filed premarket tobacco product application and a final authorization order has not taken effect; and
b) a fee for each vapor product in an amount determined by the AG. (Sec. 1)
4. Allows the AG to revise the certification form periodically. (Sec. 1)
5. Mandates a manufacturer required to submit a certification form to notify the AG within 30 days after any material change to the certification form, including the issuance or denial of a marketing authorization or other order by the FDA, or any other action by the FDA that affects the ability of the vapor product to be introduced or delivered into interstate commerce for commercial distribution in the United States. (Sec. 1)
Fund
6. Establishes the Fund, consisting of monies deposited. (Sec. 1)
7. Directs the AG to administer the Fund and to use the monies exclusively for administrating and enforcing the directory. (Sec. 1)
8. States that monies in the Fund are continuously appropriated and exempt from lapsing. (Sec. 1)
Directory
9. Prescribes the AG to maintain and make publicly available on its website a directory that lists all manufacturers and vapor products for which certification forms have been submitted and to update the directory at least monthly. (Sec. 1)
10. Requires the AG to provide notice to manufacturers and an opportunity to cure deficiencies before removing them or their products from the directory. (Sec. 1)
11. Prohibits the AG from removing the manufacturer or its vapor products from the directory for 15 days of notice. (Sec. 1)
12. Deems notice as sufficient and immediately received by a manufacturer if the notice is sent electronically or by fax. (Sec. 1)
13. Grants a manufacturer 15 days after notice by the AG to establish that the manufacturer or its vapor products should be included in the directory. (Sec. 1)
14. Allows any decision by the AG to remove or not include a manufacturer or vapor product to be appealed. (Sec. 1)
15. Requires retailers and manufacturers to remove vapor products removed from the directory from its inventory and return the product to the manufacturer for disposal within 21 days. (Sec. 1)
Prohibitions and Violations
16. Classifies vapor products as contraband 21 days after removal from the directory, and allows all classified products to be subject to seizure, forfeiture and destruction and is prohibited from being purchased or sold in Arizona. (Sec. 1)
17. Requires a person whose vapor products are confiscated to pay for the cost of the seizure, forfeiture and destruction. (Sec. 1)
18. Prohibits, beginning the later date of October 1, 2024, or the date the AG first makes the directory available for public inspection on its website, a person or manufacturer from selling or offering for sale a vapor product not on the directory in Arizona. (Sec. 1)
19. Places civil penalties on a distributor, retailer or other person who sells or offers for sale in Arizona a vapor product not included in the directory for each vapor product in violation of an amount of:
a) up to $500 for a first violation;
b) between $750 and $1,000 for a second violation within 36 months;
c) between $1,000 and $1,500 for a third violation within 36 months; and
d) between $1,500 and $3,000 for a fourth or subsequent violation within 36 months. (Sec. 1)
20. Places a daily civil penalty of $500 for each vapor product in violation on a manufacturer whose vapor products are not listed in the directory and sold in Arizona, whether directly or through a distributor, retailer or similar intermediary. (Sec. 1)
21. Places a class 3 misdemeanor on a manufacturer that falsely presents any required information for each false representation. (Sec. 1)
22. Classifies a violation of the directory as an unlawful practice, and allows the AG to investigate and take appropriate action. (Sec. 1)
Investigations
23. Allows the AG to enforce and designate agents to enforce the certification. (Sec. 1)
24. Allows the AG or their designee to examine the stock of vapor products on the premises and the books, papers, invoices and other records of a person that possesses, controls or occupies premises where the products are placed, stored, sold or offered for sale. (Sec. 1)
25. Requires each person eligible for the investigation to allow the AG or their designee the means, facilities and opportunity for certification examinations. (Sec. 1)
26. Classifies vapor products offered for sale in violation of the certification as contraband, and allows the product to be seized without a warrant by the AG, the AG's designee, employees or by Arizona law enforcement officers if directed by the AG. (Sec. 1)
27. Requires the AG to investigate each complaint it receives relating to certification requirements. (Sec. 1)
28. Allows the AG to recover attorney fees and reasonable expenses incurred in investigating and preparing the case if action is brought. (Sec. 1)
29. Deems each distributor and retailer subject to unannounced compliance checks to enforce certification requirements. (Sec. 1)
30. Outlines the conduct and information required in compliance checks. (Sec. 1)
31. Requires the AG to publish the results of all compliance checks at least annually, and to make the results available to the public on request. (Sec. 1)
Nonresident or Foreign Manufacturers
32. Requires a nonresident or foreign manufacturer not registered as a foreign corporation, foreign limited partnership, foreign limited liability company or foreign series to appoint and continually engage the services of a U.S. agent to act as an agent for the services of process. (Sec. 1)
33. Requires the nonresident or foreign manufacturer to provide certain information about the agent to the AG. (Sec. 1)
34. Prohibits a nonresident or foreign manufacturer from having its vapor products listed or retained in the directory if the manufacturer does not comply with the appointment of an agent. (Sec. 1)
35. Clarifies that the appointment of the Secretary of State (SOS) as the agent does not allow the nonresident or foreign manufacturer to have its vapor products included or retained in the directory. (Sec. 1)
36. Requires the nonresident or foreign manufacturer to:
a) provide notice to the AG at least 30 calendar days before the termination of the agent's authority;
b) provide proof to the AG of the appointment of a new agent at least five calendar days before the termination of an existing agent appointment; and
c) if an agent terminates an agency appointment, notify the AG of the termination within five calendar days and include proof of the appointment of a new agent to the AG. (Sec. 1)
37. Delegates the SOS to be appointed as the agent and may be proceeded against in courts of Arizona by service of process on the SOS of a nonresident or foreign manufacturer whose vapor products are sold in Arizona that has not appointed and engaged an agent. (Sec. 1)
Miscellaneous
38. Requires, beginning January 31, 2025, the AG to annually provide a report to the President of the Senate and the Speaker of the House of Representatives regarding:
a) the status of the directory, manufacturers and vapor products included in the directory;
b) revenues and expenditures related to the administration of the directory; and
c) enforcement activities. (Sec. 1)
39. Allows the AG to adopt rules necessary to administer the directory and certification. (Sec. 1)
40. Defines vapor product. (Sec. 1)
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44. SB 1365
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