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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
Senate: PS DP 7-0-0-0 | 3rd Read 26-3-1-0 |
SB
1603: America250 specialty plates
S/E: vapor products; regulation
Sponsor: Senator Leach, LD 17
Committee on Transportation & Infrastructure
Summary of the Strike-Everything Amendment to SB1603
Overview
Regulates vapor products. Prescribes requirements for the Board of the Arizona Department of Liquor Licenses and Control (DLLC), the Director of DLLC (Director) and the Attorney General (AG) and vapor product manufacturers relating to vapor products.
History
Currently the United States Food and Drug Administration (FDA) regulates the manufacturing, importing, packaging, labeling, promoting, sale and distribution of tobacco products, including cigarettes, cigars, smokeless tobacco and electronic cigarettes.
Current statute tasks DLLC with regulating alcoholic beverages regulation. DLLC is established consisting of the Board of DLLC (Board) which is required to grant and deny applications, adopt rules, hear appeals and hold hearings on alcoholic beverages regulation. The Director must administer and may adopt rules relating to alcoholic beverages regulation (A.R.S. §§ 4-111; 4-112).
Provisions
Board, Director and AG Powers and Duties
1. Authorizes the Director or the AG to enforce vapor products regulation and to designate agents to enforce the regulation. (Sec. 7)
2. Allows the Director, the AG or their designees 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 a premises where vapor products are placed, stored, sold or offered for sale. (Sec. 7)
3. Instructs each person that possesses, controls or occupies a premises where vapor products are placed, sold or offered for sale to allow the Director, the AG or their designees the means, facilities and opportunity for the examinations. (Sec. 7)
4. Classifies a vapor product offered for sale in violation as contraband subject to seizure without warrant by the Director, the AG, their designees or employees or by any law enforcement officer of this state if ordered by the Director or AG. (Sec. 7)
5. Enables the Director and the AG to establish rules necessary to affect the purposes of the vapor products regulation.
6. Stipulates the rules must ensure that the Director and AG share information regarding inspection and enforcement activities. (Sec. 7)
7. Requires the Director, beginning January 1, 2026, and on or before January 1 of each year thereafter, to provide to the President of the Senate and the Speaker of the House of Representatives a report with:
a) the status of the directory, including a discussion of the date of initial publication, dates of updated versions and issues the Director has encountered relating to making updates to the directory;
b) revenue and expenditures;
c) enforcement activities undertaken; and
d) a copy of the most recent version of the directory. (Sec. 7)
8. Stipulates the Board must coordinate and share information with the AG regarding investigations and violations on vapor products. (Sec. 3)
9. Instructs the Director to adopt rules to establish and maintain a directory of vapor products and vapor product manufacturers, conduct inspections and take enforcement action. (Sec. 3)
10. Requires the Director to take necessary steps to maintain effective liaison with the AG in the enforcement of regulation on alcoholic beverages and vapor products. (Sec. 3)
11. Allows the Director to examine books, records and papers of a licensee or a retailer, distributor or wholesaler of vapor products. (Sec. 3)
12. Permits the Director to impose penalties and take other action against retailers, distributors, wholesalers or manufacturers of vapor products. (Sec. 3)
13. Prohibits any member of the Board, except for a member designated by the Governor to be appointed from the industry, or the Director or any employee of DLLC from being financially interested directly or indirectly in any business that manufacturers or sells vapor products. (Sec. 4)
14. Permits the Director, the Director's agents and any peace officer enforcing alcoholic beverages and vapor products regulation to visit during the hours in which the premises are occupied and inspect the premises of a retailer, distributor or wholesaler of vapor products. (Sec. 5)
15. Directs DLLC to charge a fee for the certification required for vapor products and use all monies received from fees for certifications submitted to implement and enforce vapor products regulation. (Sec. 6)
Vapor Products Certification
16. Mandates, on or before October 1, 2025 and annually thereafter, each manufacturer of a vapor product sold for retail sale or to a consumer, whether directly or through an importer, wholesaler, distributor, retailer or similar intermediary or intermediaries, to execute and submit to the Director a certification on a form and in a manner prescribed by the Director under penalty of perjury that the manufacturer is compliant with vapor product regulation and that, for each vapor product sold for retail sale or to a consumer:
a) the manufacturer received a marketing granted order for the vapor product from the FDA; or
b) the manufacturer submitted a timely filed premarket tobacco product application for the vapor product to the FDA and the application meets specified criteria. (Sec. 7)
17. Stipulates the manufacturer is not required to submit an additional marketing granted order or premarket tobacco product application for the vapor product solely because of changes to the name, brand style or packaging of a vapor product. (Sec. 7)
18. Specifies an annual certification filed to separately list each brand name, product name, category and flavor for each vapor product sold must be accompanied by either:
a) a copy of either the marketing granted order issued by the FDA or the acceptance letter issued by the FDA for a timely filed premarket tobacco product application; or
b) a document issued by the FDA or by a court confirming that the timely filed premarket tobacco product application has received a denial order that has been and remains stayed by the FDA or court order, rescinded by the FDA or vacated by a court. (Sec. 7)
19. Specifies that an annual certification must be accompanied by a fee the first time a manufacturer submits a certification for each vapor product and an annual fee for each vapor product each time a manufacturer submits an annual certification for that vapor product. (Sec. 7)
20. States that the fee must be prescribed by the Director. (Sec. 7)
Manufacturer Requirements
21. Classifies information submitted to DLLC by the manufacturer as confidential commercial or financial information and exempts it from regulation on searches and copies. (Sec. 7)
22. Allows the manufacturer to redact certain confidential commercial or financial information. (Sec. 7)
23. Requires each manufacturer of a vapor product sold for retail sale or to a consumer, to the extent that the requirements, standards, subsequent regulations, other federal guidance or formal policy statements are issued that change compliance requirements or standards for a vapor product to become federally compliant, to submit documentation to the Director that shows compliance with that new federal requirement or standard. (Sec. 7)
24. Specifies that failure to show compliance with any new federal requirements or standards must be grounds for removal of the manufacturer and the manufacturer's vapor products from the directory. (Sec. 7)
25. Stipulates that a manufacturer required to submit a certification must notify the Director within 30 days after any material change to the certification form, including the issuance or denial of a marketing authorization, or other FDA order or any other FDA order or action or any court that affects the ability of the vapor product to be introduced or delivered into interstate commerce for commercial distribution in the United States. (Sec. 7)
DLLC Directory on Vapor Products
26. Tasks the Director, beginning December 1, 2025, with maintaining and making publicly available on the official DLLC website a directory listing all vapor product manufacturers and all vapor products for which certification forms have been submitted and approved by the Director. (Sec. 7)
27. Outlines that the directory must include all the following:
a) brand names;
b) product name;
c) vapor product categories; and
d) flavors. (Sec. 7)
28. Requires the Director to update the directory at least monthly. (Sec. 7)
29. Stipulates the Director must establish a process to provide retailers, distributors, wholesalers and any other relevant parties notice of the initial publication of the directory and any changes made to the directory from the prior month. (Sec. 7)
30. Prohibits a manufacturer or vapor product from being included or retained in the directory if the Director determines that the manufacturer:
a) failed to submit a complete and accurate certification;
b) submitted a certification that does not comply with vapor products regulation;
c) failed to submit the fee;
d) sold vapor products during a period when either the manufacturer or the vapor product had not been certified and listed on the directory; and
e) provided information as part of the certification that contains false information or material misrepresentations or omissions, as determined by the Director. (Sec. 7)
31. Subjects a manufacturer to a class 3 misdemeanor for each false representation, material misrepresentation or omission, that knowingly falsely represents, materially misrepresents or omits any information required by a certification and that on notice from the Director does not correct the false, materially misrepresented or omitted information. (Sec. 7)
32. Instructs the Director to provide a manufacturer a notice of deficiencies in a certification and an opportunity to fix deficiencies before removing the manufacturer or vapor product from the directory. (Sec. 7)
33. Restricts the Director from removing a manufacturer or vapor product from the directory for at least 30 days after the manufacturer has been given notice by the Director of an intended action to remove the manufacturer or vapor product from the directory. (Sec. 7)
34. Requires the notice of an intended action to remove the manufacturer or vapor product from the directory to clearly describe the reasons for the intended action. (Sec. 7)
35. Stipulates that the notice must be considered sufficient and be deemed received by the manufacturer if the notice is provided either electronically to an email address or by fax to a number provided by the manufacturer in the manufacturer's most recent certification. (Sec. 7)
36. Provides the manufacturer with 15 days after the date of service of the notice of the intended action to cure the deficiencies in the certification or otherwise establish that the manufacturer or vapor product should be included in the directory. (Sec. 7)
37. Asserts retailers, distributors and wholesalers have 30 days to sell a manufacturer's vapor products that were in the retailer's, distributor's or wholesaler's inventory for sale as of the date of removal of the manufacturer or vapor product from the directory. (Sec. 7)
38. Subjects the vapor products of a manufacturer removed from the directory to seizure, forfeiture and destruction or disposal and may not be purchased or sold to a consumer, after the 30 days removal from the directory. (Sec. 7)
39. Stipulates the cost of seizure, forfeiture and destruction or disposal to be paid by the person or entity from whom the vapor products are confiscated. (Sec. 7)
40. Mandates, beginning December 1, 2025, or on the date that the Director first makes the directory available for public inspection, whichever is later, vapor products not included in the directory may not be sold in this state or to a consumer, either directly or through an importer, distributor, wholesaler, retailer or similar intermediary or intermediaries. (Sec. 7)
41. Provides exceptions to when the Director first makes the directory available apply if:
a) each retailer has 60 days after the date that the Director first makes the directory available to sell vapor products that were in the retailer's inventory and not included in the directory or must remove those vapor products from inventory; or
b) each distributor or wholesaler has 60 days after the date that the Director first makes the directory available to remove those vapor products intended for retail sale from the distributor's or wholesaler's inventory. (Sec. 7)
42. Subjects vapor products not listed in the directory and intended for retail sale 60 days after the Director makes the directory available to seizure, forfeiture, destruction or disposal and may not be purchased or sold for retail sale or to a consumer. (Sec. 7)
Civil Penalties on Vapor Product Violations
43. Enables the Director or AG to impose civil penalties for violations. (Sec. 7)
44. Subjects a retailer, distributor, wholesaler or importer who sells or offers a vapor product for retail sale or to a consumer that is not included in the directory to a civil penalty of $500 for each day of the violation until the vapor product is removed from the market or properly listed in the directory. (Sec. 7)
45. Prescribes, for a second violation within a 12-month period, a civil penalty of at least $750 but not more than $1,000 per day. (Sec. 7)
46. Outlines, for a third or subsequent violation within a 12-month period, the civil penalty must be at least $1,000 but not more than $1,500 per day. (Sec. 7)
47. Subjects a manufacturer whose vapor products are not listed in the directory and that causes the vapor products that are not listed to be sold for retail sale or to a consumer, whether directly or through an importer, distributor, wholesaler, retailer or similar intermediary or intermediaries, to a civil penalty of $10,000 for each individual vapor product offered for sale in violation until the vapor product is removed from the market or is listed on the directory. (Sec. 7)
48. Specifies that a second or subsequent violation must constitute an unfair or deceptive act or practice and allows the AG to investigate the act or practice and take action. (Sec. 7)
49. Entitles DLLC to recover costs, including the costs of investigation, expert witness fees and reasonable attorney fees. (Sec. 7)
Out-of-State Vapor Product Manufacturer and Agent Requirements
50. Outlines, as a condition to having a name or vapor product listed and retained in the directory, a manufacturer not registered to do business in this state must appoint and continually engage without interruption a registered agent for service of process on whom all process and any action arising out of the enforcement of this article may be served. (Sec. 7)
51. Directs the manufacturer to provide to the Director the name, address and telephone number of the manufacturer's agent and any other information relating to the manufacturer's agent as requested by the Director. (Sec. 7)
52. Specifies a manufacturer located outside of the United States must cause each of the manufacturer's importers of vapor products to be sold in this state to appoint and continually engage without interruption the services of a registered agent. (Sec. 7)
53. Applies all obligations with respect to the appointment of an agent to an importer of vapor products. (Sec. 7)
54. Instructs a manufacturer to provide written notice to the Director 30 days before the termination of the authority of an agent. (Sec 7)
55. Asserts, not less than five days before the termination of an existing agent appointment, the manufacturer must provide to the Director the name, address and telephone number of the manufacturer's newly appointed agent and any other information relating to the new appointment as requested by the Director. (Sec. 7)
56. Requires the manufacturer to notify the Director of the termination within five days after the termination and include proof of the appointment of a new agent if an agent terminates the appointment. (Sec 7)
57. Directs any nonresident or foreign manufacturer not registered to do business in this state as a foreign corporation or business entity to submit to the Director a surety bond or other cash security payable to this state in the amount of $25,000. (Sec. 7)
58. Specifies the bond be posted by a corporate surety located within the United States. (Sec. 7)
59. Stipulates the bond be conditioned on the performance by the manufacturer of all requirements and obligations. (Sec. 7)
60. Provides that a surety on a manufacturer's bond must be liable up to the amount of the bond and this state may execute on such surety bond for the payment of fines and civil penalties imposed on the manufacturer for the costs of seizure and destruction of vapor products sold in violation. (Sec. 7)
61. Authorizes, if this state executes on the surety bond, this state to require the manufacturer to provide an additional bond as a condition for retaining the manufacturer or its vapor products in the directory. (Sec. 7)
62. Requires a surety on a bond furnished by a manufacturer be released and discharged from liability to this state accruing on the bond 60 days after the date on which the surety has lodged with the Director a written request to be released and discharged. (Sec. 7)
63. Clarifies that a release and discharge does not relieve, release or discharge the surety from any liability that has already accrued or that accrues before the 60-day period expires. (Sec. 7)
64. Instructs the Director, on receiving a written request from a surety to be released and discharged, notify the manufacturer that furnished the bond. (Sec. 7)
65. Requires the Director to remove the manufacturer and its vapor products from the directory, unless the manufacturer, on or before the expiration of the 60-day period, files with the Director a new bond and the Director approves and accepts the surety. (Sec. 7)
Unannounced Compliance Checks
66. Subjects each retailer, distributor and wholesaler that sells or distributes vapor products to unannounced compliance checks. (Sec. 7)
67. Mandates unannounced follow-up compliance checks of all noncompliant retailers, distributors and wholesalers be conducted within 30 days after any violation. (Sec. 7)
68. Instructs the Director to publish the results of all compliance checks at least annually and make the results available to the public on request. (Sec. 7)
Miscellaneous
69. Changes the heading of Title 4 of Arizona Revised Statutes to Alcoholic Beverages and Vapor Products, rather than Alcoholic Beverages. (Sec. 1)
70. Defines pertinent terms. (Sec. 2)
71. Makes technical and conforming changes. (Sec. 2-6)
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SB 1603
Initials LM/KL Page 0 Transportation & Infrastructure
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