SB 326 — AN ACT CONCERNING THE SALE OF CERTAIN ELECTRONIC NICOTINE DELIVERY SYSTEMS, VAPOR PRODUCTS, CIGARETTES AND TOBACCO PRODUCTS.

Subsection (a) of section 21a-415 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this chapter, [and] section 53-344 and section 4 of this act:

(1) "Authorized owner" means the owner or authorized designee of a business entity that is applying for a registration or is registered with sSB326 / File No.

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98 the Department of Consumer Protection pursuant to this chapter;

(3)sSB326 "Dealer/ registration"File meansNo. an electronic nicotine delivery system certificate of dealer registration issued by the Commissioner of Consumer Protection pursuant to this section;

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682 (3) "Dealer registration" means an electronic nicotine delivery system certificate of dealer registration issued by the Commissioner of Consumer Protection pursuant to this section;

"Vapor product" does not include a medicinal or therapeutic product that is (A) used by a licensed health care provider to treat a patient in a health care setting, (B) used by a patient, as prescribed or directed by a licensed sSB326health /care Fileprovider No.in any setting, or (C) any drug or device, as defined in the federal Food, Drug and Cosmetic Act, 21 USC 321, as amended from time to time, any combination product, as described in said act, 21 USC 353(g), as amended from time to time, or any biological product, as described in 42 USC 262, as amended from time to time, and 21 CFR 600.3, as amended from time to time, authorized for sale by the United States Food and Drug Administration;

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98682 health2 caresSB326 providerFile inNo. any setting, or (C) any drug or device, as defined in the federal Food, Drug and Cosmetic Act, 21 USC 321, as amended from time to time, any combination product, as described in said act, 21 USC 353(g), as amended from time to time, or any biological product, as described in 42 USC 262, as amended from time to time, and 21 CFR 600.3, as amended from time to time, authorized for sale by the United States Food and Drug Administration;

682 (8) "Sale" or "sell" means an act done intentionally by any person, whether done as principal, proprietor, agent, servant or employee, of transferring, or offering or attempting to transfer, for consideration, includingbarteringorexchanging,orofferingtobarterorexchange;andincluding (9)bartering "Deliver" or "delivering"exchanging, means an act done intentionally by any person, whether as principal, proprietor, agent, servant or employee, of transferring, or offering or attempting to transfer,barter physical possession or controlexchange; of an electronic nicotine delivery system or vapor product.

[and] (9) "Deliver" or "delivering" means an act done intentionally by any person, whether as principal, proprietor, agent, servant or employee, of transferring, or offering or attempting to transfer, physical possession or control of an electronic nicotine delivery system or vapor product;

[.] (10) "Flavoring agent" means an additive used in food or drugs when such additive (A) is used in accordance with good manufacturing practice principles and in the minimum quantity requiredto produce its intended effect;

(B) (i) consists of one or more ingredients generally recognized as safe in food or drugs, (ii) has been previously sanctioned for use in food or drugs by the state or the federal government, (iii) meets United States Pharmacopeia standards, or (iv) is an additive permitted for direct addition to food for human consumption pursuant to 21 CFR 172, as amended from time to time;

(C) is inert and produces no effect other than the instillation or modification of flavor;

and (D) is not greater than five per cent of the total weight of the product.

2.

(NEW) (Effective January 1, 2022) (a) No person shall sell, give, deliver or possess with intent to sell in this state an electronic nicotine delivery system or a vapor product with a flavoring agent, other than tobacco flavor, that has been added for the purpose of flavoring the contents of the electronic nicotine delivery system or vapor product.

This section shall not apply to any product (1) that the United States Secretary of Health and Human Services determines to be a modified risk tobacco product pursuant to 21 USC 387k, as amended from time to time, or (2) for which the manufacturer has applied for or received a marketing order from the federal Food and Drug Administration under 21 USC 387j, as amended from time to time.

(b) (1) No person shall sell, give, deliver or possess with intent to sell, in this state an electronic nicotine delivery system or a vapor product sSB326 / File No.

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682 with a nicotine content that is greater than thirty-five milligrams per milliliter.

Each person with a manufacturer registration shall provide documentation to a person with a dealer registration, indicating the nicotine content, expressed as milligrams per milliliter, for each electronic nicotine delivery system and vapor product sold by such person with a manufacturer registration to such person with a dealer registration.

(2) Each business entity holding a dealer registration shall (A) maintain documentation, within the place of business identified in the business entity's application for dealer registration, of the nicotine content provided pursuant to subdivision (1) of this subsection by the person with a manufacturer registration, for each electronic nicotine delivery system and vapor product sold, given or delivered by such persontothebusiness entity,and(B)providesuchdocumentationatthe request of the Commissioner of Mental Health and Addiction Services, or the commissioner's designee, during any unannounced compliance check conducted pursuant to section 21-415b of the general statutes, as amended by this act.

(c)Asused in this section,"person"means any individual,authorized owner of a business entity, retail establishment, as defined in section 19a-106a of the general statutes, partnership, company, limited liability company, public or private corporation, association, trustee, executor, administrator or other fiduciary or custodian.

Sec.

3.

Section 21a-415b of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2022):

(a) Each business entity with a dealer registration shall place and maintain in legible condition at each point of sale of electronic nicotine delivery systems or vapor products a notice to consumers that states (1) the sale, giving or delivering of electronic nicotine delivery systems and vapor products to any person under twenty-one years of age is prohibited by section 53-344b, as amended by this act, (2) the use of false identification by a person under twenty-one years of age to purchase an electronicnicotine delivery systemor avaporproduct isprohibited,and sSB326 / File No.

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682 (3) the penalties and fines for violating the provisions of this section and section 53-344b, as amended by this act.

(b) (1) The Commissioner of Mental Health and Addiction Services, orthecommissioner'sdesignee,shallconduct unannouncedcompliance checks on business entities [holding] with a dealer registration by engaging persons between the ages of sixteen and twenty to enter the place of business of each such business entity to attempt to purchase an electronic nicotine delivery system or a vapor product.

(2) The Commissioner of Mental Health and Addiction Services, or the commissioner's designee, shall conduct unannounced compliance checks on business entities with a dealer registration to determine whether any such business entity is selling, giving or delivering or has sold,givenor deliveredany electronicnicotine delivery systemorvapor product with a flavoring agent, other than tobacco flavor, that has been addedforthepurpose offlavoringthe contentsoftheelectronicdelivery system or vapor product, in violation of subsection (a) of section 2 of this act.

(3) The Commissioner of Mental Health and Addiction Services, or the commissioner's designee, shall conduct unannounced compliance checks on business entities with a dealer registration to determine whether each such business entity is in possession of the documentation required under subsection (b) of section 2 of this act and whether such documentation indicates that electronic nicotine delivery systems or vapor products with a nicotine content greater than thirty-five milligrams per milliliter were sold, given or delivered by such business entity.

The commissioner shall refer all business entities that do not possess such documentation or that sold, gave, delivered or possessed with intent to sell an electronic nicotine delivery system or a vapor product with a nicotine content that is greater than thirty-five milligrams per milliliter to the Commissioner of Revenue Services.

(4) The [commissioner] Commissioner of Mental Health and Addiction Services shall conduct unannounced follow-up compliance checks of all noncompliant business entities and shall refer all sSB326 / File No.

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682 noncompliant business entities to the Commissioner of Revenue Services.

(c) Upon receipt of a referral made pursuant to subsection (b) of this section, the Commissioner of Revenue Services may, following a hearing, impose a civil penalty and direct the Commissioner of Consumer Protection to suspend or revoke the dealer registration of the business entity that is the subject of such referral.

The Commissioner of Revenue Services shall provide such business entity with written notice of the hearing, specifying the time and place of such hearing and requiring such business entity to show cause why such dealer registration should not be suspended or revoked.

The written notice of the hearing shall be mailed or delivered to such business entity not less than ten days preceding the date of the hearing.

Such notice may be served personally or by registered or certified mail.

(d) If the Commissioner of Revenue Services finds, after a hearing pursuant to subsection (c) of this section, that any person employed by any business entity issued a dealer registration under section 21a-415, as amended by this act, has sold, given or delivered an electronic nicotine delivery systemor vapor product toapersonunder twenty-one years of age, other than a person under twenty-one years of age who is delivering or accepting delivery in such person's capacity as an employee, said commissioner shall, for the first violation, require such employee to successfully complete an online prevention education program administered by the Department of Mental Health and Addiction Services not later than thirty days after said commissioner's finding.

[Said commissioner] The Commissioner of Revenue Services shall assess any employee who fails to complete such program a civil penalty of [two] four hundred dollars.

Said commissioner shall assess any employee a civil penalty of [two hundredfifty] five hundred dollars for a second or subsequent violation on or before twenty-four months after the date of the first violation.

(e) (1) If the Commissioner of Revenue Services finds, after a hearing pursuant to subsection (c) of this section, that [(1)] (A) any business sSB326 / File No.

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682 entity issued a dealer registration under section 21a-415, as amended by this act, has sold, given or delivered an electronic nicotine delivery system or vapor product to a person under twenty-one years of age, other than a person under twenty-one years of age who is delivering or accepting delivery in such person's capacity as an employee, or [(2)] (B) such person's employee has sold, given or delivered an electronic nicotine delivery systemor vapor product toapersonunder twenty-one years of age, the commissioner shall, for the first violation, require the authorized owner of such business entity to successfully complete an online prevention education program administered by the Department of Mental Health and Addiction Services not later than thirty days after said commissioner's finding.

[Said commissioner] The Commissioner of Revenue Services shall assess any business entity issued a dealer registration, whose authorized owner fails to complete such program, a civil penalty of [three] six hundred dollars for the first violation.

[Said commissioner] (2) The Commissioner of Revenue Services shall assess such business entityacivilpenaltyof [sevenhundredfifty]onethousandfivehundred dollars for a second violation on or before twenty-four months after the date of the first violation.

(3) For a third violation by such business entity on or before twenty- four months after the date of the first violation, [said commissioner] the Commissioner of Revenue Services shall assess such business entity a civilpenalty of [one]two thousanddollarsandnotify theCommissioner of Consumer Protection that the dealer registration held by such business entity under this chapter shall be suspended for not less than thirty days.

(4) For a fourth violation on or before twenty-four months after the date of the first violation, the Commissioner of Revenue Services shall assess such business entity a civil penalty of [one] two thousand dollars and notify the Commissioner of Consumer Protection that the dealer registration held by such business entity under [said] this chapter shall be revoked.

The Commissioner of Revenue Services shall order such sSB326 / File No.

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682 business entity to conspicuously post a notice in a public place stating that electronic nicotine delivery systems and vapor products cannot be sold during the period of suspension or revocation and the reasons for such suspension or revocation.

Any sale of an electronic nicotine delivery system or vapor product by such business entity during the period of such suspension or revocation shall be deemed an additional violation of this section.

(f) (1) If the Commissioner of Revenue Services finds, after a hearing pursuant to subsection (c) of this section, that (A) any business entity issued a dealer registration under section 21a-415, as amended by this act, has sold, given or delivered an electronic nicotine delivery system or vapor product with a flavoring agent, other than tobacco flavor, that has been added for the purpose of flavoring the contents of the electronic nicotine delivery system or vapor product, or (B) any such business entity does not possess documentation of nicotine content or nicotine content that indicates a level of nicotine that is greater than thirty-five milligrams per milliliter for any electronic nicotine delivery system or vapor product sold, given or delivered within the retail establishment of the business entity, the commissioner shall, for the first violation, require the authorized owner of such business entity to successfully complete an online prevention education program administered by the Department of Mental Health and Addiction Servicesnot later thanthirty daysafter saidcommissioner'sfinding.

The Commissioner of Revenue Services shall assess any business entity issued a dealer registration, whose authorized owner fails to complete such program, a civil penalty of six hundred dollars for the first violation.

(2) The Commissioner of Revenue Services shall assess such business entity a civil penalty of one thousand five hundred dollars for a second violation on or before twenty-four months after the date of the first violation.

(3) For a third violation by such business entity on or before twenty- four months after the date of the first violation, The Commissioner of sSB326 / File No.

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682 Revenue Services shall assess such business entity a civil penalty of two thousand dollars and notify the Commissioner of Consumer Protection that the dealer registration held by such business entity under this chapter shall be suspended for not less than thirty days.

(4) For a fourth violation on or before twenty-four months after the date of the first violation, the Commissioner of Revenue Services shall assess such business entity a civil penalty of two thousand dollars and notify the Commissioner of Consumer Protection that the dealer registration held by such business entity under this chapter shall be revoked.

The Commissioner of Revenue Services shall order such business entity to conspicuously post a notice in a public place stating that electronic nicotine delivery systems and vapor products cannot be sold during the period of suspension or revocation and the reasons for such suspension or revocation.

Any sale of an electronic nicotine delivery system or vapor product by such business entity during the period of such suspension or revocation shall be deemed an additional violation of this section.

[(f)] (g) Upon receipt of notice of determination from the Commissioner of Revenue Services made under subsection (e) or (f) of this section, the Commissioner of Consumer Protection shall suspend or revoke the dealer registration of the business entity that is the subject of [said] the determination.

The Commissioner of Consumer Protection shall not be required to hold a hearing in connection with any notice of determination received from the Commissioner of Revenue Services under this section.

[(g)] (h) The Commissioner of Consumer Protection shall not issue a new dealer registration to a former registrant whose dealer registration was revoked unless the commissioner is satisfied that such business entity that holds a dealer registration will comply with the provisions of this chapter and any regulations related thereto, and section 53-344b, as amended by this act.

Sec.

(NEW)Section (Effective12-295a from passage) (a) For purposes of thisthe section,general (1)statutes "flavored"is meansrepealed imparting a characterizing flavor, and (2)the "characterizingfollowing flavor"is meanssubstituted ain distinguishablelieu tastethereof or(Effective aromaJanuary imparted1, either2022): prior to or during theuse or consumptionofanelectronicnicotine delivery system or vapor product, including, but not limited to, tastes or aromas relating to any fruit, chocolate, menthol, mint, wintergreen, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, herb or spice, but does not include the taste or aroma of tobacco.

(b)OnandaftersSB326 October/ 1,2021,noFile personwithanelectronicnicotineNo. delivery system certificate of dealer registration under section 21a-415 of the general statutes, as amended by this act, shall sell, offer for sale, display for sale or possess with intent to sell any flavored electronic nicotine delivery system or flavored vapor product.

No682 electronic9 nicotinesSB326 deliveryFile systemNo. or vapor product shall be determined to be flavored solely because of the use of additives or flavoring or the inclusion of ingredient information.

A682 public(a) statement,If claimthe orCommissioner indiciaof madeRevenue orServices disseminatedfinds, after a hearing, that any person employed by thea manufacturerdealer ofor thedistributor, electronicas nicotinedefined deliveryin system,section vapor12-285, producthas sold, given or delivered cigarettes or tobacco products to a componentperson partunder twenty-one years of suchage systemother than a person under twenty-one years of age who is delivering or sSB326accepting /delivery Filein No.such person's capacity as an employee, said commissioner shall, for the first violation, require such person to successfully complete an online tobacco prevention education program administered by the Department of Mental Health and Addiction Services not later than thirty days after said commissioner's finding.

98[Said 6commissioner] sSB326The FileCommissioner No.of Revenue Services shall assess any person who fails to complete such program a civil penalty of [two] four hundred dollars.

98Said productcommissioner thatshall suchassess system,any productperson oremployed componentby parta thereofdealer has or producesdistributor a characterizingcivil flavorpenalty shallof constitute[two primahundred faciefifty] thatfive suchhundred system,dollars productfor a second or componentsubsequent partviolation thereofon isor abefore flavoredtwenty-four electronicmonths nicotineafter deliverythe systemdate orof flavoredthe vaporfirst product.violation.

(c)(b) (1) If the Commissioner of Revenue Services finds, after a hearing, that any suchdealer certificateor holderdistributor knowinglyhas violatedsold, anygiven provisionor ofdelivered subsectioncigarettes (b)or ofa thistobacco section,product theto commissionera shallperson findunder thattwenty-one suchyears certificateof holderage committedother than a violationperson andunder assesstwenty-one suchyears certificate holder a civil penalty of threeage hundredwho dollarsis fordelivering the first violation or aaccepting civildelivery penaltyin ofsuch sevenperson's hundredcapacity fiftyas dollarsan foremployee, anyor secondsuch violationdealer on or beforedistributor's thirty-sixemployee monthsafterhas thedatesold, ofthefirstgiven violation.Foror athirddelivered violationcigarettes on or beforea thirty-sixtobacco monthsproduct afterto thesuch dateperson, ofsaid the first violation, the commissioner shall assessrequire such certificatedealer holderor adistributor, civilfor penaltythe offirst oneviolation, thousandto dollarssuccessfully andcomplete anyan licenseonline ortobacco certificateprevention heldeducation program administered by suchthe certificateDepartment holderof underMental chapterHealth 214and orAddiction 420gServices ofnot thelater generalthan statutesthirty shalldays beafter revoked.said commissioner's finding.

[Said commissioner] The Commissioner of Revenue Services shall assess any dealer or distributor who fails to complete such program a civil penalty of [three] six hundred dollars.

[Said commissioner] (2) The Commissioner of Revenue Services shall assess [any] such dealer or distributor a civil penalty of [seven hundred fifty] one thousand five hundred dollars for a second violation on or before twenty-four months after the date of the first violation.

sSB326 / File No.

682 10 sSB326 File No.

682 (3) For a third violation on or before twenty-four months after the date of the first violation, [said commissioner] the Commissioner of Revenue Services shall assess such dealer or distributor a civil penalty of [one] two thousand dollars and suspend any license held by such dealer or distributor under this chapter for not less than thirty days.

(4) For a fourth violation on or before twenty-four months after the date of the first violation, [said commissioner] the Commissioner of Revenue Services shall assess such dealer or distributor a civil penalty of [one] two thousand dollars and revoke any license issued to such dealer or distributor under this chapter.

Said commissioner shall order such distributor or dealer to conspicuously post a notice in a public place within such distributor's or dealer's establishment stating that cigarettesandtobaccoproductscannotbesoldduringtheperiodofsuch suspension or revocation and the reasons for such suspension or revocation.

Any sale of cigarettes or a tobacco product by such dealer or distributor during such suspension or revocation shall be deemed an additional violation of this subsection.

(c) (1) If the Commissioner of Revenue Services finds, after a hearing, that any owner of an establishment in which a cigarette vending machine or restricted cigarette vending machine is located has sold, given or delivered cigarettes or tobacco products from any such machine to a person under twenty-one years of age other than a person under twenty-one years of age who is delivering or accepting delivery in such person's capacity as an employee, or has allowed cigarettes or tobacco products to be sold, given or delivered to such person from any such machine, said commissioner shall require such owner, for the first violation, to successfully complete an online tobacco prevention education program administered by the Department of Mental Health and Addiction Services not later than thirty days after said commissioner's finding.

[Said commissioner] The Commissioner of Revenue Services shall assess any owner who fails to complete such program a civil penalty of [five hundred] one thousand dollars.

[Said commissioner] sSB326 / File No.

682 11 sSB326 File No.

682 (2) The Commissioner of Revenue Services shall assess [any] such owner a civil penalty of [seven hundred fifty] one thousand five hundred dollars for a second violation on or before twenty-four months after the date of the first violation.

(3) For a third violation on or before twenty-four months after the date of the first violation, [said commissioner] the Commissioner of Revenue Services shall assess such owner a civil penalty of [one] two thousand dollars and immediately remove any such machine from such establishment and no such machine may be placed in such establishment for a period of one year following such removal.

(d) Any person aggrieved by any action of the [commissioner] Commissioner of Revenue Services pursuant to this section may take any appeal of such action as provided in sections 12-311 and 12-312.

Sec.

5.

Subsection (b) of section 53-344 of the general statutes is repealedandthefollowingissubstitutedinlieuthereof(EffectiveJanuary 1, 2022):

(b) Any person who sells, gives or delivers to any person under twenty-one years of age cigarettes or a tobacco product shall be fined not more than [three] six hundred dollars for the first offense, not more than [seven hundred fifty] one thousand five hundred dollars for a secondoffense onor before twenty-four monthsafter thedateofthefirst offense and not more than [one] two thousand dollars for each subsequent offense onor before twenty-fourmonthsafter thedate ofthe firstoffense.The provisionsofthissubsectionshallnotapplytoaperson under twenty-one years of age who is delivering or accepting delivery of cigarettes or a tobacco product (1) in such person's capacity as an employee, or (2) as part of a scientific study being conducted by an organization for the purpose of medical research to further efforts in cigarette and tobacco product use prevention and cessation, provided such medical research has been approved by the organization's institutional review board, as defined in section 21a-408.

Sec.

6.

Subsection (b) of section 53-344b of the general statutes is sSB326 / File No.

682 12 sSB326 File No.

682 repealedandthefollowingissubstitutedinlieuthereof(EffectiveJanuary 1, 2022):

(b) Any person who sells, gives or delivers to any person under twenty-one years of age an electronic nicotine delivery system or vapor product in any form shall be fined not more than [three] six hundred dollars for the first offense, not more than [seven hundred fifty] one thousand five hundred dollars for a second offense on or before twenty- four months after the date of the first offense and not more than [one] two thousand dollars for each subsequent offense on or before twenty- four months after the date of the first offense.

The provisions of this subsection shall not apply to a person under twenty-one years of age who isdelivering or accepting deliveryofanelectronicnicotine delivery system or vapor product (1) in such person's capacity as an employee, or (2) as part of a scientific study being conducted by an organization for the purpose of medical research to further efforts in tobacco use prevention and cessation, provided such medical research has been approved by the organization's institutional review board, as defined in section 21a-408.

Section 1 fromJanuary passage1, 12-285(a)2022 21a-415(a) Sec.

2 fromJanuary passage1, 2022 New section Sec.

3 fromJanuary passage1, 21a-415(a)2022 21a-415b Sec.

4 fromJanuary passage1, New2022 section12-295a PHSec. Joint Favorable Subst.

5 January 1, 2022 53-344(b) Sec.

6 January 1, 2022 53-344b(b) Statement of Legislative Commissioners:

In Section 3(b)(4), "commissioner" was bracketed and, after the closing bracket, "Commissioner of Mental Health and Addiction Services" was inserted for clarity, in Section 3(d) and (e), references to "said commissioner" and "Said commissioner" were bracketed and, after the closing brackets, references to "the Commissioner of Revenue Services" and "The Commissioner of Revenue Services" were inserted for clarity, and in Section 4, references to "Said commissioner" and "said commissioner" were bracketed and, after the closing brackets, sSB326 / File No.

682 13 sSB326 File No.

682 references to "The Commissioner of Revenue Services" and "the Commissioner of Revenue Services" were inserted for clarity.

FIN Joint Favorable Subst.

98682 714 sSB326 File No.

98682 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

Agency Affected Fund-Effect FY 22 $ FY 23 $ Department of Revenue Services GF - Revenue 87.91.3 million 108.82.5 Loss million Loss Department of Revenue Services GF - Cost 155,94242,933 160,62088,441 State Comptroller - Fringe GF - Cost 64,404 66,336 Benefits Mental Health & Addiction GF - PotentialCost 65,910At 67,887least At least Serv., Dept.

Cost33,750 77,096 State Comptroller - Fringe GF - PotentialCost 27,221At 28,037least At least Benefits Cost31,670 65,476 Note:

None Explanation The bill, which bans flavored cigarettes,e-cigarette tobaccoand vapor products, e-results cigarettes,in anda vaporGeneral productsFund revenue loss of $1.3 million in FY 22 (partial year) and requires$2.5 themillion Departmentin ofFY Revenue23 Servicesand (DRS)annually tothereafter, enforceas itswell provisions,as resultsthe in:following impacts:

1)Section a3 Generalresults Fundin revenuea losscost of $87.9at millionleast $33,750 in FY 22 and $108.8$70,096 million in FY 23;23 (with associated fringe benefit costs of $13,939 and $28,950, respectively) to the Department of Mental Health and Addiction Services(DMHAS)tosupportatleastoneSpecialInvestigatortocomply with the unannounced compliance checks required under the bill.

andSection 2)3 aalso costresults toin thea DRScost of $220,346$60,664 in FY 22 (partial year funding) and $226,956$124,967 in FY 23, inclusive of fringe benefit costs, for salaryone andThe fringe benefit costs associatedfor withmost twostate Revenueemployees Agentare positions.budgeted centrally in accounts administered by the Comptroller.

To the extent the Department of Mental Health and Addiction Services is required to conduct compliance checks to enforce the bill's provisions, the agency would incur increased costs for a Special Investigator ($65,910 in FY 22 and $67,887 in FY 23 with associated fringe benefit The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

98682 815 sSB326 File No.

98682 costsHearings ofOfficer $27,221at andthe $28,037,Department respectively).of Revenue Services.

The revenueOut estimateYears isbasedThe onactualannualized datafromMassachusettsthatongoing showedfiscal aimpact 25.3%identified dropinabove cigarettewould taxcontinue revenueinto followingthe implementationfuture ofsubject a similar ban, adjusted to reflectinflation. a higher share of menthol cigarettes in the Connecticut market versus the Massachusetts market.

Additionally,Sources: the revenue estimate assumes a 55% drop in e-cigarette revenue based on data indicating that flavored products comprise just over half the vaping market.

TheCenters Outfor YearsDisease StateControl Impact:and Prevention Morbidity and Mortality Weekly Report 9/18/2020 Testimony of Office of Policy and Management Secretary, Melissa McCaw US Department of Health and Human Services sSB326 / File No.

Agency682 Affected16 Fund-EffectsSB326 FYFile 24No. $ FY 25 $ FY 26 $ Department of GF - Revenue 103.3 98.2 million 93.3 million Revenue Services Loss million Department of GF - Cost* 163,832 167,109 170,451 Revenue Services State GF - Cost* 67,663 69,016 70,396 Comptroller - Fringe Benefits Mental Health & GF - Potential 69,245 70,630 72,043 Addiction Serv., Cost* Dept.

State682 GFOLR -Bill PotentialAnalysis 28,598sSB 29,170326 29,753AN ComptrollerACT -CONCERNING Cost*THE FringeSALE BenefitsOF Note:CERTAIN ELECTRONIC NICOTINE DELIVERY SYSTEMS, VAPOR PRODUCTS, CIGARETTES AND TOBACCO PRODUCTS.

GF=GeneralSUMMARY FundStarting *TheseJanuary figures1, have2022, beenthis adjustedbill forprohibits inflatione-cigarette atdealers from selling, delivering, giving, or possessing with the intent to sell, e- cigarettes and vapor products with a rate(1) ofnicotine 2%content Municipalgreat Impact:than 35 milligrams per milliliter (mg/ml) or (2) flavoring agent other than tobacco.

NoneIt Sources:excludes from the flavor ban (1) “modified risk tobacco products” designated by the U.S.

ManagementDepartment Scienceof Associates,Health Inc.and Human Services and (2) products for which a manufacturer has applied for or received a federal Food and Drug Administration (FDA) marketing order (see BACKGROUND).

MassachusettsThe Departmentbill ofalso: Revenue Monthly Blue Book Reports sSB326 / File No.

981. 9 sSB326 File No.

98requires OLRe-cigarette Billmanufacturers Analysisto sSBprovide 326documentation ANto ACTe-cigarette PROHIBITINGdealers THEon SALEthe OFnicotine FLAVOREDcontent CIGARETTES,of TOBACCOtheir PRODUCTS,products ELECTRONICand NICOTINErequires DELIVERYdealers SYSTEMSto ANDmaintain VAPORthe PRODUCTS.documentation (§ 2);

SUMMARY2. Starting October 1, 2021, this bill prohibits e-cigarette dealers and cigarette dealers and distributors from selling, offering or displaying for sale, or possessing with the intent to sell, flavored cigarettes, tobacco products, e-cigarettes, and vapor products.

Therequires billthe definesDepartment flavoredof productsMental asHealth thoseand impartedAddiction withServices a(DMHAS) distinguishableto tasteconduct orunannounced aromacompliance (i.e.,checks characterizingon flavor)e-cigarette otherdealers thanand tobacco,refer includingnon-compliant fruit,dealers chocolate,to menthol,the mint,Department wintergreen,of vanilla,Revenue honey,Services candy,(DRS) cocoa,commissioner dessert,who alcoholicmay beverage,impose herb,civil orpenalties spice.(§ 3);

The3. bill specifies that these products cannot be determined to be flavored solely because they use additives or flavorings or include ingredient information.

Underincreases the bill,penalties afor publicselling statementcigarettes, ortobacco claimproducts, madee- orcigarettes, disseminatedand byvapor aproducts manufacturerto thatindividuals theseunder productsage have21 orand produceextends athe characterizingsame flavorincreased ispenalties primato faciee-cigarette evidencedealers thatwho violate the productbill’s isflavor flavored.ban or nicotine content requirements (§§ 3-6);

For cigarette and tobaccosSB326 product/ manufacturers,File thisNo. also applies to statements or claims made or disseminated by a person they authorize.

If682 the17 DepartmentsSB326 ofFile RevenueNo. Services (DRS) commissioner finds, after a hearing, that an e-cigarette dealer or a cigarette or tobacco product dealer or distributor knowingly violated the bill’s ban on flavorings, the commissioner must assess a civil penalty of (1) $300 for the first violation and (2) $750 and $1,000, respectively, for a second and third violation that occurs within 36 months after the first violation.

Under682 the4. bill, if a cigarette or tobacco product dealer or distributor sSB326 / File No.

98increases 10the sSB326penalties Fileon No.owners of establishments with cigarette vending machines and restricted cigarette vending machines for sales to individuals under age 21 (§ 4).

98 commits a third violation within 36 months after the first violation, the DRS commissioner must either suspend the dealer’s or distributor’s license for at least 30 days or revoke the license.

But the commissioner must revoke the license if they commit a fourth violation within that time period.

For e-cigarette dealers, the bill requires the commissioner to revoke the dealer’s license or certificate if they commit a third violation within that time period.

UponJanuary passage1, COMMITTEE2022 ACTION§§ Public1-3 Health& Committee6 Joint— FavorableE-CIGARETTES SubstituteAND YeaVAPOR 25PRODUCTS NayDefinition 8of (03/05/2021)Flavoring sSB326Under /the Filebill, No.flavored e-cigarettes and vapor products are those with a flavoring agent that was added to flavor them.

98It 11defines a “flavoring agent” as an additive:

1.

used in accordance with good manufacturing practice principles and in the minimum quantity needed to produce its intended effect;

2.

(a) consisting of one or more ingredients generally recognized as safe in food or drugs, (b) that was sanctioned for the use by the state or federal government, (c) that meets U.S.

Pharmacopeia standards, or (d) that is an additive permitted for direct addition to food for human consumption under FDA regulations;

3.

that is inert and produces no effect other than instilling or modifying flavor;

and 4.

that is no greater than 5% of the product’s total weight.

Nicotine Content Thebillprohibitse-cigarettedealersfromsellinge-cigarettesorvapor products with a nicotine content greater than 35 mg/ml.

It requires e- cigarette manufacturers to provide documentation to dealers on the nicotine content of these products (expressed as mg/ml) that the manufacturers sell to them.

Under the bill, dealers must maintain this documentation at their registered place of business for each product sold, delivered, or given to them by a manufacturer.

They must also provide it to DMHAS, upon request, during any unannounced compliance check the department sSB326 / File No.

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682 conducts.

Compliance Checks The bill requires the DMHAS commissioner, or her designee, to conduct unannounced compliance checks on e-cigarette dealers to determine whether they are complying with the bill’s flavor ban and nicotine content requirements.Existing lawalready requiresDMHASto conduct these checks for underage sales (i.e., sales to individuals under age 21).

Under the bill, the DMHAS commissioner must refer e-cigarette dealers to the DRS commissioner after the initial compliance check who (1) do not have documentation on the nicotine content of their products or (2) sold products that violate the nicotine threshold.

For either the flavoring ban or nicotine content provisions, the DMHAS commissioner must refer non-compliant dealers to DRS after completing an unannounced follow-up compliance check.

The DRS commissioner may impose a civil penalty (see table below).

§§ 3-6 — PENALTIES Existing law allows the DRS commissioner, after a hearing, to impose civil penalties on e-cigarette dealers, cigarette dealers and distributors, or their employees for sales to individuals under age 21.

The bill increases these penalties, as shown in the table below, and extends the same penalties to e-cigarette dealers who violate the bill’s flavor ban or nicotine content requirements.

Table 1:

Civil Penalties for Underage Sales Current Law The Bill Penalties on Cigarette Dealers and Distributors and E-Cigarette Dealers violation $300, if they fail to complete a$600, if they fail to complete an online online tobacco prevention educattobacco prevention education program program within 30 days within 30 days violation $750 $1,500 sSB326 / File No.

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682 violation $1,000, plus minimum 30-day $2,000, plus minimum 30-day license license suspension suspension violation $1,000, plus license revocation $2,000, plus license revocation Penalties on Their Employees violation $200, if the employee fails to $400, if the employee fails to complete an complete an online tobacco online tobacco education program within education program within 30 days 30 days violation $250 $500 As under current law, the above fines for second and subsequent violations may be imposed for violations that occur within 24 months after the first violation.

Under the bill, as for underage sales under existing law, the DRS commissioner may only impose the above fines on e-cigarette dealers who violate the bill’s flavor ban or nicotine threshold if they are referred to him by the DMHAS commissioner after unannounced compliance checks (see above).

For third and fourth violations, the DRS commissioner must direct the Department of Consumer Protection (DCP) commissioner to suspend or revoke the e-cigarette dealer’s registration.

Before taking action, existing law requires the DRS commissioner to notify the e-cigarette dealer in writing of the hearing time and location and require the dealer to show cause why the registration should not be suspended or revoked.

The notice must be delivered personally, or by registered or certified mail at least 10 days before the hearing date.

When the DRS commissioner directs the DCP commissioner to suspend or revoke a dealer’s registration, the DCP commissioner does not need to hold an additional hearing beforehand.

InadditiontotheDRScivilpenalties,thelawgenerallyprovidesfines for sales of cigarettes, tobacco products, e-cigarettes, or vapor products to people under age 21.

The bill correspondingly increases the maximum amount of those fines, as follows:

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682 1.

for a first offense, from $300 to $600;

2.

for a second offense, from $750 to $1,500;

and 3.

for each subsequent offense, from $1,000 to $2,000.

As under current law, the fines for second and subsequent offenses apply to those that occur within 24 months after the first offense.

§ 4 — VENDING MACHINE SALES Current law allows the DRS commissioner, after a hearing, to impose penalties on owners of establishments with cigarette vending machines and restricted cigarette vending machines (see BACKGROUND) for sales to individuals under age 21.

The bill increases these penalties as follows:

1.

for a 1 violation, if the owner fails to successfully complete an online tobacco education program within 30 days, from $500 to $1,000;

2.

for a 2ndviolation, from $750 to $1,500;

and 3.

for a 3 violation, from $1,000 to $2,000.

As under current law, the commissioner may impose fines for second and third violations that occur within 24 months after the date of the first violation.

Existing law, unchanged by the bill, requires an establishment owner who commits a third violation, to immediately remove the vending machine from the establishment and prohibits any vending machine at the establishment for one year after the removal.

By law, the DRS commissioner may also assess the following civil penalties against a person, dealer, or distributor who violates the vending machine placement laws:

(1) $250 for a first violation and (2) $500 for a second or third violation within 18 months.

For a third violation,thevendingmachinemust also beimmediately removedfrom sSB326 / File No.

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682 the area, facility, or business with it, and these machines are banned from the location for one year after the removal (CGS § 12-289a(b)).

BACKGROUND Legislative History The Senate referred the bill (File 98) to the Finance, Revenue and Bonding Committee, which reported out a substitute that replaced the prior bill and (1) eliminated provisions prohibiting the sale of flavored cigarettes and tobacco products, (2) exempted MRTPs and products subjecttoanFDAmarketingorder fromtheflavorban,and(3)increased penalties for underage sales.

Related Bill HB 6450 (File 237), favorably reported by the Public Health Committee, contains similar provisions (§§ 1-6).

Cigarette Vending Machines Existing law distinguishes between two types of machines that it authorizes to dispense cigarettes.

One is the traditional coin-operated vending machine.

The other is the “restricted cigarette vending machine,” which (1) automatically deactivates and cannot be operated after each sale and (2) requires a face-to-face interaction or display of identification between the purchaser and employee of the business with the machine.

Modified Risk Tobacco Products (MRTP) MRTPsaretobaccoproductsdesignatedbytheFDAasprovidingless harm or risk of tobacco-related disease when compared to other commercially-marketed tobacco products, such as combustible cigarettes.

To qualify as an MRTP, product manufacturers must show, among other things, (1) scientific evidence that supports their claims about reduced harm or risk, (2) that consumers can adequately understandthe information and appropriately perceive the relative risk of these products compared to other tobacco products, and (3) that using the sSB326 / File No.

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682 MRTP will significantly reduce the harm and risk of tobacco-related disease to individual users and benefit the health of the population as a whole.

FDA Premarket Tobacco Product Applications (PMTA) The federal Tobacco Control Act generally prohibits a new tobacco product from entering the U.S.

market unless the manufacturer submits to the FDA (1) an application proving the product was legally on the market prior to February 15, 2007, or (2) a PMTA.

For the latter, the FDA must issue a subsequent order finding that the product would be appropriate for protecting the public health (21 U.S.C.

§ 387j).

COMMITTEE ACTION Public Health Committee Joint Favorable Substitute Yea 25 Nay 8 (03/05/2021) Finance, Revenue and Bonding Committee Joint Favorable Substitute Yea 35 Nay 14 (05/03/2021) sSB326 / File No.

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