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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
e-liquids; tobacco products; vapor products
Purpose
Establishes licensure for the sale of tobacco products, vapor products, alternative nicotine products or e-liquids (tobacco, vapor or nicotine products) and prescribes licensure requirements, penalties and adjudication procedures. Modifies criminal penalties relating to underage tobacco possession and sales and expands the Smoke-Free Arizona Act prohibition to include vapor products and e-liquids. Contains requirements for enactment for initiatives and referendums (Proposition 105).
Background
In 2019, the Federal Food, Drug and Cosmetic Act was amended to raise the federal minimum age for the sale of tobacco products from 18 years old to 21 years old (legal age) (Further Consolidated Appropriations Act, 2020). Statute deems a person to be guilty of a petty offense if the person: 1) knowingly sells, gives or furnishes a tobacco product, vapor product or any instrument or paraphernalia designed for smoking or ingesting tobacco to a person who is under 18 years old (minor); and 2) is a minor who buys, possesses or knowingly receives a tobacco product, vapor product or any instrument or paraphernalia designed for smoking or ingesting tobacco. A minor who misrepresents their age to induce any person to sell, give or furnish a tobacco product, vapor product or any instrument or paraphernalia designed for smoking or ingesting of tobacco is guilty of a petty offense and must pay a fine up to $500 (A.R.S. § 13-3622).
In 2006, Arizona voters passed the Smoke-Free Arizona Act to establish smoking restrictions. The Act prohibits smoking in all public places and places of employment, with outlined exceptions. A person who smokes where smoking is prohibited is guilty of a petty offense (A.R.S. § 36-601.01).
The
DLLC regulates the production, distribution and sale of alcoholic beverages
through the State Liquor Board (Board) and the Office of the DLLC Director. The
Board: 1) grants and denies liquor license applications; 2) adopts
rules; and 3) hears appeals and holds hearings relating to liquor
regulation. The duties of the Director of the DLLC (Director) include: 1)
adopting rules to establish licensure requirements; 2) responding to
a law enforcement agency investigative reports relating to violations of liquor
regulations; 3) coordinating with law enforcement agencies to enforce
Arizona law against the consumption of spirituous liquor by underage persons;
and
4) establishing an investigation unit. The Director may suspend, revoke or
refuse to renew a liquor license for outlined violations and impose a civil
penalty between $200 and $3,000 (A.R.S. Title 4).
S.B. 1496 requires two-thirds of license fees to be deposited in the Liquor Licenses Fund. Any Liquor Licenses Fund monies that exceed the legislative appropriation to DLLC are deposited in state General Fund. If the collection of licensure fees results in a change in revenues, there may be a fiscal impact to the state General Fund associated with this legislation.
Provisions
Smoke-Free Arizona Act (Proposition 105)
1. Subjects the use of vapor products and e-liquids to the prohibition against smoking in all public places and places of employment, except as outlined.
2. Exempts, from the prohibition on smoking or use of vapor products and e-liquids, a retail vapor product and e-liquid store that is physically separated.
Arizona Criminal Code
3. Conforms the minimum legal age for the sale of tobacco, vapor or nicotine products to the federal minimum age of sale for tobacco products.
4. Subjects, to a maximum fine of $500, a person who sells, gives or furnishes tobacco, vapor or nicotine products to an underage person.
5. Allows a court, in addition to any other penalty, to suspend for 180 days the privilege to drive or the nonoperating ID license of an underaged person who violates the prohibition on misrepresentation of age by use of ID with intent to induce a person to sell, give or furnish tobacco, vapor or nicotine products.
6. Expands, to apply to tobacco products or alternative nicotine products, the nonapplicability of criminal penalties relating to a person's religious use of outlined products.
Tobacco, Vapor or Nicotine Product Licensure
7. Prohibits a person from selling tobacco, vapor or nicotine products without a license.
8. Requires a person desiring a license to sell tobacco, vapor or nicotine products (license) to apply on a form furnished by the Director.
9. Deems a license to be valid for two years and stipulates that a license authorizes the licensee to sell tobacco, vapor or nicotine products only at the location provided on the license.
10. Requires all applications for a new license to be filed with and determined by the Director.
11. Requires the DLLC to issue a license only after the applicant satisfactorily shows its qualifications.
12. Requires a person license applicant to file a copy of the application with the Director and:
a) with the city or town clerk for a license within a city or town; and
b) with the county clerk for a license in an unincorporated area of a county.
13. Authorizes the Director to charge, in an amount determined by the Director:
a) initial or renewal of license application fees to be paid at the application filing; and
b) a penalty fee for a licensee that fails to renew a license by the expiration date.
14. Deems a license renewal to be filed and received by the DLLC on the date shown by a postmark of U.S. Postal Service official mark, if the license renewal is deposited, properly addressed and placed in an official depository by the license expiration date.
15. Considers, as timely, a renewal for a license that expires on a Saturday, Sunday or legal holiday if received by the DLLC on the next business day.
16. Prohibits, from selling tobacco, vapor or nicotine products, a licensee who fails to renew the license by the expiration date and terminates a license that is not renewed within 60 days after the expiration date.
17. Allows the Director, if the licensee shows good cause, to waive a late penalty and renew a terminated license.
18. Allows the DLLC to issue licenses with staggered renewal dates.
19. Stipulates that one half of an annual license fee must be charged if a license is issued less than six months before the scheduled renewal date as a result of a staggered renewal system.
20. Allows all licensing functions to be conducted electronically.
State Preemption
21. Preempts any city, town or county adopted or modified rule, regulation, code or ordinance regulating the sale or marketing of tobacco, vapor or nicotine products in conflict with or more restrictive than state law.
22. Prohibits a city, town or county from limiting any right granted by the license and this legislation.
23. Allows a city, town or county to adopt and enforce lawful zoning requirements limiting retail tobacco store or retail vapor product and e-liquid stores.
24. Allows a city, town or county to limit location from being not closer than _______ from:
a) a public or private school providing primary or secondary education;
b) a fenced playground adjacent to a school or public park, homeless shelter, youth community or recreation center, or place of worship; or
c) another retail-oriented tobacco store or vapor store.
25. Allows a city, town or county to restrict billboards within ____ of school buildings and fenced school recreation areas.
26. Excludes from the establishments a city, town or county may restrict, a retail store that is larger than 10,000 square feet or that devotes less than 10 percent of its retail space to tobacco or vapor products and accessories.
27. Allows a business already operating to continue to operate as a retail tobacco store or retail vapor product and e-liquid store.
28. Specifies that a city, town, county, school district, charter school, community college district, stadium district, or the Arizona Board of Regents may regulate the sale, marketing or use of tobacco, vapor or nicotine products on owned, leased or operated property.
Age Verification
29. Prohibits a retailer from selling, furnishing or giving tobacco, vapor or nicotine products to a person who reasonably appears to be under 27 years old without following age verification procedures.
30. Requires a licensee, licensee's employee or any other person who questions that a person ordering, purchasing or otherwise procuring the serving or delivery of tobacco, vapor or nicotine products to:
a) demand and examine identification (ID) to determine that the ID appears to be valid and unaltered;
b) examine the ID photograph to determine that the person reasonably appears to be the same person in the ID; and
c) determine that the date of birth in the ID indicates the person is not under the legal age.
31. Prescribes the following to be the only acceptable forms of ID for age verification:
a) an unexpired Arizona driver license, except for a license that is issued to a person who is under 21 years old if it is 30 days after the person reaches 21 years;
b) an unexpired driver license issued by any other state, the district of Columbia, any U.S. territory or Canada that includes a person's picture and date of birth;
c) an unexpired Arizona nonoperating ID license, except for a nonoperating license that is issued to a person who is under 21 years old if it is 30 days after the person reaches 21 years;
d) a form of ID issued by any other state, the district of Columbia, any U.S. territory or Canada that is substantially equivalent to an Arizona nonoperating license and includes a person's picture and date of birth;
e) an unexpired armed forces ID card that includes the person's picture and date of birth; and
f) a valid, unexpired passport or resident alien card that contains a person's photograph and date of birth.
32. Deems a licensee or licensee's employee to not have violated age verification requirements if the licensee or employee follows the age verification procedures and:
a) records and retains a record of the ID on the particular visit; or
b) uses a biometric identity verification device to verify a person is not under the legal age.
33. Prescribes the following acceptable forms for recording a person's ID:
a) a writing containing the ID type, date of issuance, the name and date of birth on the ID and the person's signature;
b) an electronic file or printed document produced by a device that reads a person's age from the ID;
c) a dated and signed photocopy of the ID; and
d) a photograph or digital copy of the ID.
34. Specifies the ID record or biometric identity verification defense applies to licensee and employee actions after the outlined age verification procedure is performed during the particular visit to the licensed premises.
35. Specifies that a licensee or employee is not required to demand and examine the ID of a person if the licensee or employee previously performed the age verification procedure.
36. Presumes that a licensee or employee who has not recorded and retained a record of an ID:
a) did not follow any of the age verification procedures; and
b) for the purposes of State Liquor Board (Board) hearings on a license, knows the person attempting to purchase tobacco, vapor or nicotine products is under the legal tobacco and vapor use age.
37. Provides an affirmative defense, to a criminal charge relating to sales to a person who is under the legal age, if there is proof that the licensee or employee followed the entire age verification procedure but did not retain a record.
38. Provides a defense, to a violation of the age verification requirements, if the person procuring or attempting to procure tobacco, vapor or nicotine products is not under the legal age.
Grounds for License Suspension, Revocation or Refusal to Renew
39. Authorizes the Director, after notice and a hearing, to suspend, revoke or refuse to renew any license to sell tobacco, vapor or nicotine products if:
a) a person buys for resale, sells or deals in tobacco, vapor or nicotine products in Arizona without first procuring a license;
b) a person sells or deals in tobacco, vapor or nicotine products without complying with statutory requirements;
c) a licensee or other person sells, furnishes, disposes of or gives tobacco, vapor or nicotine products to an underage person;
d) a person employs a person under 18 years old to sell or dispose of tobacco, vapor or nicotine products, with a specified exception;
e) a licensee or employee knowingly allows a person on the premises to furnish tobacco, vapor or nicotine products to an underage person;
f) a licensee or employee knowingly allows an underage person to possess tobacco, vapor or nicotine products on the premises;
g) a licensee uses a vending machine to dispense tobacco, vapor or nicotine products;
h) an employee of a licensee accepts a gratuity, compensation, remuneration or consideration to sell, furnish, dispose of or give tobacco, vapor or nicotine products to an underage person;
i) a licensee or employee sells tobacco, vapor or nicotine products to a person the licensee or employee knows intends to resell the tobacco, vapor or nicotine products;
j) the licensee or controlling person knowingly files an application or document that contains materially false or misleading information;
k) the licensee or controlling person knowingly gives testimony under oath in an investigation or proceeding that is false or misleading;
l) the licensed business if delinquent in the payment of taxes, penalties or interest to the state or a political subdivision for over 100 days in an amount that exceeds $250;
m) the licensee or controlling person leases or subleases a license or obtains, assigns, transfers or sells a license without complying with statutory requirements;
n) the licensee fails to keep for two years, and make available to the DLLC on request, invoices, records, bills or other papers and documents relating to tobacco, vapor or nicotine products;
o) the licensee or controlling person is convicted of a felony;
p) the licensee or controlling person violates or fails to comply with statute or rule relating to tobacco or vapor in Arizona or any other state; and
q) the licensee violates an order of the Board.
40. Deems an act or omission of a licensee's employee to be an act or omission of the licensee.
41. Allows a retailer to employ a person who is at least 16 years of age to check out, package or carry tobacco, vapor or nicotine products if:
a) the employer primarily sells merchandise other than tobacco, vapor or nicotine products; and
b) the underage person is supervised by a person on the premises who is at least 18 years old.
42. Stipulates that the Director may only take action for a felony conviction of a corporation if the conduct was engaged in, authorized, solicited, commanded or recklessly tolerated by the directors of the corporation or by a high managerial agent acting in the scope of employment.
43. Prohibits the DLLC from issuing a license to a person that has had a license revoked within one year before application.
44. Specifies that a license expiration, cancellation, revocation, reversion, surrender, or any other termination does not prevent the initiation or completion of a disciplinary proceeding.
45. Specifies that a license revocation, suspension or refusal to renew for unpaid taxes, penalties or interest is a contested case with the Department of Revenue.
46. Defines high managerial agent.
DLLC Penalties
47. Authorizes the Director to impose:
a) a civil penalty between $200 and $3,000 for each violation to be paid in a single payment or installments; and
b) a requirement that a licensee or other person attend a DLLC-approved training program.
48. Deems a person under the legal age to be guilty of a petty offense if the person solicits another person to purchase, sell, give or furnish tobacco, vapor or nicotine products.
49. Deems a person under the legal age to be guilty of a petty offense if the person uses an ID of another person, whether fraudulent, false or valid, to purchase tobacco, vapor or nicotine products.
50. Subjects a person who uses a driver license or nonoperating license of another person to purchase tobacco, vapor or nicotine products to suspension of the driver license or nonoperating ID license.
51. Deems a person to be guilty of a petty offense, if the person:
a) knowingly influences the sale or giving of tobacco, vapor or nicotine products by misrepresenting the person's age; or
b) orders, requests, receives or procures tobacco, vapor or nicotine products with the intent to sell or give the product to a person under the legal age.
52. Allows a judge to suspend a driver license or driving privilege for up to 30 days for first conviction and up to six months for a second or subsequent conviction relating to the misrepresentation of a person's age or the intent to sell or give the products to a person under the legal age.
53. Requires a peace officer to forward or electronically transfer, to the Director of the Arizona Department of Transportation, the required affidavit if the peace officer:
a) arrests a person for an offense which may result in the suspension of a license or privilege to operate a motor vehicle; or
b) confiscates a false ID used by a person to purchase tobacco, vapor or nicotine products.
Complaints and Hearings
54. Requires the Director to receive and investigate complaints of alleged violations of tobacco, vapor or nicotine products statutes, rules or any conditions imposed on the licensee.
55. Authorizes the Director to direct a complaint and hearing notice to a licensee on the initiation of an investigation.
56. Requires the complaint and hearing notice to state the alleged violations and direct the licensee, within 15 days after service of the complaint and hearing notice, to appear by filing an answer with the Director.
57. Allows the Director to provide for informal disposition by consent agreement or written warning, instead of issuing a complaint.
58. Allows failure to answer to a complaint to be deemed as a licensee's admission of commission of the act charged in the complaint and allows the Director to then vacate the hearing and impose any outlined sanction.
59. Allows the Director to set a hearing on any of the grounds for license action before the Director or an administrative law judge.
60. Allows the Director to waive any sanction for good cause, including excusable neglect.
61. Requires the Director, for violation of tobacco, vapor or nicotine products regulations, to consider mitigating evidence established by a preponderance of the evidence that the employee acted in violation of express direction or policy adopted by the licensee and communicated to the employee.
62. Allows a city or county law enforcement agency to initiate a complaint with the DLLC regarding statutory violations.
63. Requires the Director, if the Director receives three complaints from separate incidents from any law enforcement agency within 12 months, to transmit a written report to the Board that includes:
a) the complaints;
b) any investigation results relating to complaints; and
c) a history of all prior complaints against the licensee.
64. Requires the Board to review a report of complaints and authorizes the Board to direct the Director to conduct further investigation or serve a licensee with a complaint and notice of a hearing.
65. Requires a hearing before the Director or an administrative law judge to conform to the requirements of the statutory Uniform Administrative Hearing Procedures.
66. Allows an attorney, corporate officer or employee of a corporation to represent a corporation at a hearing.
Appeals
67. Determines, for the purposes of appeal to the superior court, a decision issued by the Director to not be final until the decision has been appealed to and ruled on by the Board.
68. Allows the Board to affirm, reverse or modify any decision issued by the Director.
69. Allows an aggrieved party to appeal to the Board a final decision of the Director regarding applicants or licensees based on contention that the decision was:
a) founded on or contained errors of law;
b) unsupported by competent evidence as disclosed by the entire record;
c) materially affected by unlawful procedures;
d) based on violation of a constitutional provision; or
e) arbitrary or capricious.
70. Requires the aggrieved party to file the appeal in writing with the DLLC within 15 days after notice of the Director's decision is served.
71. Suspends the Director's decision until determination of any appeal by the Board.
72. Requires Board or an administrative law judge to conduct a hearing on an appeal according to the requirements of the statutory Uniform Administrative Hearing Procedures.
73. Allows the Board or ALJ to accept relevant and material evidence and testimony as outlined in statute.
74. Subjects final Board decisions to statutes relating to the judicial review of administrative decisions.
75. Allows the Director to require, in a judicial review of a DLLC decision, the posting of a bond with the court to reimburse the DLLC for reasonable costs in transcribing and preparing the DLLC record and considers the bond to be payable to the DLLC if the superior court awards costs to the DLLC.
76. Requires the DLLC to prepare an official record of an appeal hearing including all testimony and exhibits.
77. States that the DLLC is not required to transcribe the record except according to a superior court appeal.
78. Allows the DLLC, on written request and receipt of a transcription fee, to transcribe the record or allow the requesting person to transcribe the record.
Enforcement Measures
79. Allows the Board or the Director to apply to the Superior Court for injunctive relief, if the Board or Director has reasonable ground to believe:
a) the person is selling tobacco, vapor or nicotine products without a valid license; or
b) violating the outlined grounds for suspension, revocation or refusal to renew.
80. Allows law enforcement agencies to use persons under the legal age to test a licensee's compliance with age verification and sale requirements if:
a) the law enforcement agency has reasonable suspicion that the licensee is violating age verification and sale requirements;
b) the person is in between 15 and 19 years old;
c) the person is not employed on an incentive or quota basis;
d) the person's appearance is that of a person under the legal age;
e) a photograph of the person accurately depicting the person's appearance and attire is taken no more than 12 hours before the attempted purchase;
f) the person places, receives and pays for the order; and
g) the person does not use any product or device.
81. Prohibits an adult from accompanying the underage person onto the licensee's premises.
82. Allows a licensee or employee cited for selling tobacco, vapor or nicotine products to an underage person to inspect the photograph taken of the person immediately after the citation.
83. Prohibits the person's appearance at a trial or administrative hearing resulting from a citation from being substantially different from the appearance at the time the citation was issued.
84. Immunizes, from prosecution, a person under the legal age who purchases or attempts to purchase tobacco, vapor or nicotine products under the direction of a law enforcement agency.
85. States that a person is not in violation of criminal code prohibitions relating to tobacco, vapor or nicotine products sales if acting under a Director-approved testing compliance program.
86. Adds, to the duties of the
Director, enforcement of Tobacco Sales statutes relating to vending machine sales,
delivery, schools, and the manufacture and sale of cigarettes and
roll-your-own-tobacco.
88. Requires the Director to coordinate with the Department of Public Safety and local law enforcement agencies for enforcement of laws prohibiting the use of tobacco, vapor or nicotine products by persons under the legal tobacco and vapor use age.
89. Authorizes the Director to:
a) remove, from the marketplace, tobacco, vapor or nicotine products that may be contaminated, illegal or adulterated;
b) issue and enforce cease and desist orders against a person that sells tobacco, vapor or nicotine products without an appropriate license or permit;
c) accept and expend private grants of monies, gifts and devises for educational programs for parents and students on the use by underage individuals of tobacco, vapor or nicotine products; and
d) adopt rules relating to enforcement of the sale of tobacco, vapor or nicotine products to or obtaining of tobacco, vapor or nicotine products by an underage person.
90. Specifies that the DLLC's enforcement authority does not limit the role of the Attorney General in enforcing Arizona laws regarding the sale or transfer of tobacco, vapor or nicotine products to persons under the legal age.
License Ownership
91. Stipulates that a license is not transferable and may not be leased or subleased.
92. Requires a licensee to report, to the Director, a change in ownership of the licensee's business, as defined by rule, within 30 days.
93. Requires a person who acquires control of a licensed corporation to file notice with the Director within 30 days and list the officers, directors or other controlling person.
94. States there is no acquisition of control if:
a) a new person is added to the ownership of a licensee's business and the controlling persons previously disclosed to the Director remain identical; or
b) there is no change in control or beneficial ownership and a licensee's business is restructured and all controlling persons of the new business and the licensee are identical.
95. Requires all officers, directors or other controlling persons to meet licensure qualification.
96. Allows the Director to issue a temporary permit to a trustee in bankruptcy to acquire and dispose of a debtor's tobacco, vapor or nicotine products.
Regulation of Sales
97. Prohibits the sale of tobacco, vapor or nicotine products using a drive-through or physical feature of the premises that allows a customer to make the purchase without leaving the person's vehicle.
98. Prohibits a person from making a delivery sale of vapor or nicotine products to an underage person.
99. Allows a person to mail, ship or otherwise deliver a vapor or nicotine product for personal consumption only if the purchaser, before the sale:
a) verifies by an independent third party that the purchaser is at least 21 years old through a commercially available database regularly used by governments and businesses to verify age and identity; and
b) accepts full payment for the purchase by check, credit card or debit card in the purchaser's name.
100. Deems, as guilty of a class 2 misdemeanor and subject to a maximum civil penalty of $5,000, a person who violates vapor or nicotine product delivery requirements.
101. Prohibits a person from selling or distributing tobacco, vapor or nicotine products:
a) by any means other than vendor-assisted sales in which the customer has no direct access to the product; or
b) self-service displays.
102. Exempts, from the prohibition on sales through a self-service display or vending machine, retail establishments if underaged persons are not allowed in and the prohibition is clearly posted on all entrances.
103. Prohibits a retailer that sells, furnishes or gives tobacco, vapor or nicotine products to prominently display a prescribed sign relating to underage sales and a warning that e-liquids, vapor products and alternative nicotine products may contain nicotine.
Definitions
104. Defines tobacco product, for the purposes of licensure requirements, penalties for underage sales, tobacco sale regulations and the Smoke-Free Arizona Act, as cigars, cigarettes, cigarette papers, smoking tobacco, chewing tobacco and smokeless tobacco.
105. Defines vapor product, for the purposes of licensure requirements, penalties for underage sales, tobacco sale regulations and the Smoke-Free Arizona Act, as either:
a) a powered vaporizer that employs a mechanical heating element, battery or circuit, regardless of shape or size, that coverts an e-liquid into a vapor intended for inhalation; or
b) a noncombustible product that employs a heating element, power source, electronic circuit or other electronic, chemical or mechanical means used to produce vapor from an e-liquid.
106. Defines alternative nicotine product, for the purposes of licensure requirements, penalties for underage sales and tobacco sale regulations, as a noncombustible product that contains nicotine and is intended for human consumption, whether chewed, absorbed, dissolved, ingested or consumed by any other means.
107. Defines e-liquid, for the purposes of licensure requirements, penalties for underage sales, tobacco sale regulations and the Smoke-Free Arizona Act, as a liquid substance that:
a) may or may not contain nicotine;
b) does not contain cannabidiol or cannabis; and
c) is intended to be vaporized and inhaled using a vapor product.
108. Excludes, from the definitions of tobacco product, vapor product and alternative nicotine product, drugs, devices or combination products authorized for sale by the U.S. Food and Drug Administration, as defined by the Federal Food, Drug and Cosmetic Act.
109. Defines retail tobacco store, retail vapor product and e-liquid store and self-service delivery display.
Miscellaneous
110. Includes e-liquids, vapor products and alternative nicotine products in the prohibition on tobacco products at schools and school-related areas.
111. Allows a school district governing board, charter school governing body or private school to adopt policies prohibiting and regulating tobacco, vapor or nicotine products at school sanctioned activities.
112. Allows common and high school courses of study to include instruction on the nature and harmful effects of e-liquids, alternative nicotine products and vapor products.
113. Makes technical and conforming changes.
114. Contains a severability clause.
115. Requires, for enactment of the Smoke-Free Arizona Act provisions, the affirmative vote of at least three-fourths of the members of each house of the Legislature (Proposition 105).
116. Becomes effective on January 1, 2022.
Prepared by Senate Research
February 16, 2021
LB/kja