HOUSE OF REPRESENTATIVES

H.B. NO.

1495

TWENTY-NINTH LEGISLATURE, 2017

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to remote sales of CIGARETTES AND tobacco products.

 

 

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

 


SECTION 1. The legislature finds that tobacco use is the single most preventable cause of disease and death in the United States and is a top public health priority. The health consequences of tobacco use include heart disease, multiple types of cancer, pulmonary disease, adverse reproductive effects, and the exacerbation of chronic health conditions. In Hawaii, smoking claims fourteen hundred adult lives each year, and twenty-one thousand children and youth now under eighteen years old will ultimately die prematurely from smoking. Annually, $526,000,000 in health care costs are directly attributed to smoking in the State.

The legislature further finds that tobacco products are addictive and inherently dangerous. The United States Surgeon General has reported that most people begin to smoke in adolescence and develop characteristic patterns of nicotine dependence before adulthood.

The legislature recognizes that electronic smoking devices include a diverse group of devices that allow users to inhale an aerosol, which typically contains nicotine, flavorings, and other additives. Electronic smoking devices are tobacco products and are regulated as such under the federal Food, Drug, and Cosmetic Act, as amended by the Family Smoking Prevention and Tobacco Control Act of 2009. In recent years, electronic smoking device use by youth and young adults has increased at an alarming rate. Electronic smoking devices are now the most commonly used tobacco product among youth in the nation and in Hawaii. The electronic cigarette industry is growing rapidly, with retail and online sales of electronic smoking devices projected to reach $10,000,000,000 in 2017. Until passage of a final regulation in 2016 granting the Food and Drug Administration authority over electronic cigarettes, cigars, and other tobacco products, minimal regulation of these products existed. Despite product regulation, the online electronic smoking device industry has not prevented youth access.

The legislature finds that most tobacco product sales occur via face-to-face transactions, however there is a growing trend toward the marketing and sales of electronic smoking devices to consumers online. Selling tobacco products to persons under the age of twenty-one is illegal in Hawaii. Simply restricting the sale of tobacco products to those twenty-one and over does not go far enough, given how easily youth can and do circumvent the age verification process. Internet and mail-order sellers offer youth relatively easy access to tobacco products, including electronic smoking devices. Failing to restrict internet sales defeats the purpose of the law, which is to reduce the public health impact of tobacco use, in part by reducing all tobacco use among youth. In addition to the inability to accurately and adequately verify a purchaser's age, selling tobacco products through the Internet provides a way for the purchaser and the tobacco industry to avoid federal and state taxes, resulting in loss of revenue. This lack of taxation furthers the lowering of tobacco product pricing. By evading taxes, internet sellers place traditional, licensed wholesalers and retailers at a competitive disadvantage.

The purpose of this Act is to correct a loophole in Hawaii law regarding age verification, taxation, and public health goals by prohibiting the shipment of certain tobacco products purchased through the Internet or by mail order to anyone other than licensed wholesalers or retailers.

SECTION 2. This Act shall be known and may be cited as the "Internet Marketing and Purchase of Cigarettes and Tobacco Act of 2017".

SECTION 3. Chapter 245, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"245-   Unlawful transport of tobacco products ordered through remote sale; penalty. (a) A person or entity commits the offense of unlawful transport of tobacco products if the person or entity is engaged in the business of selling or providing tobacco products, including electronic cigarettes, and:

(1) Ships or transports, or causes to be shipped or transported, any tobacco product, including electronic smoking devices, ordered or purchased through a remote sale to anyone in the State other than a licensed wholesaler or dealer or retailer with a valid retail tobacco permit; or

(2) Provides substantial assistance to a person or entity in violating this section while having the knowledge or reason to know of the violation;

provided that a remote sale to a person or entity with a valid general excise tax license from the department of taxation and a physical building or structure for the purpose of retail is not a violation of this section.

(b) Any manufacturer, wholesaler, dealer, retailer, or other person or entity who knowingly violates this section shall be guilty of a class C felony for which a maximum fine of $5,000 may be imposed. Each distribution that violates or fails to comply with this section shall be a separate and distinct violation.

(c) In addition to, or in lieu of, any other civil or criminal remedy provided by law, a person or entity who has violated this section is subject to a civil penalty of up to $5,000 for each violation. The attorney general may initiate a civil action seeking recovery of such penalties."

SECTION 4. Section 245-1, Hawaii Revised Statutes, is amended as follows:

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

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

"Internet sale" means any internet website or electronically networked means that solicits or sells cigarettes or tobacco products, including electronic smoking devices, regardless of whether cash is actually paid for the product.

"Mail order" means any means of soliciting cigarettes or tobacco products, including electronic smoking devices, which are set forth in a catalog or other printed solicitation of a business, which is generally available to the public.

"Remote sale" means a sale that is conducted by mail order, telephone, computer, internet sale, or any means other than a physical storefront."

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

""Tobacco products" means tobacco in any form, other than cigarettes or little cigars, that is prepared or intended for consumption or for personal use by humans, including large cigars and any substitutes thereof other than cigarettes that bear the semblance thereof, snuff, snus, chewing or smokeless tobacco, [and] smoking or pipe tobacco[.], and electronic smoking devices. "Tobacco products" does not include drugs, devices, or combination products approved for sale by the United States Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act."

SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2017.

 

INTRODUCED BY:

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Report Title:

Internet Marketing and Purchase of Cigarettes and Tobacco Product Act of 2017; Electronic Smoking Device; Remote Sale; Mail Order; Internet Sale

 

Description:

Prohibits the remote sale and distribution of cigarettes and tobacco products, including electronic smoking devices, to consumers except to licensed wholesalers or dealers and permit-holding retailers. Makes violation of the prohibition a class C felony subject to a maximum fine of $5,000.

 

 

 

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