HB 1289: RELATING TO HEALTH.

HOUSE OF REPRESENTATIVES	H.B. NO.	1289
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to health.

 

 

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

 

     SECTION 1.  Chapter 245, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§245-     Electronic smoking device and e-liquid manufacturers; certification; directory; penalties.  (a)  By August 1, 2025, and annually thereafter, every manufacturer of an electronic smoking device or e-liquid containing nicotine, sold for retail sale or to a consumer in the State, whether directly or through a dealer, distributor, wholesaler, retailer, or similar intermediary or intermediaries, shall certify under penalty of perjury on a form and in the manner prescribed by the department, that the manufacturer agrees to comply with this chapter and that:

     (1)  The manufacturer has received a marketing granted order for the electronic smoking device or e-liquid from the FDA pursuant to title 21 United States Code section 387j;

     (2)  The manufacturer submitted a timely filed premarket tobacco product application for the electronic smoking device or e-liquid to the FDA pursuant to title 21 United States Code section 387j, and the application either remains under review by the FDA or has received a denial order that has been and remains stayed by the FDA or court order, rescinded by the FDA, or vacated by a court; or

     (3)  The manufacturer is not required to submit an additional marketing granted order or premarket tobacco product application for the electronic smoking device or e-liquid solely because of changes to the name, brand style, or packaging of an electronic smoking device or e-liquid that is covered under paragraph (1) or (2).

     (b)  The certification form shall separately list each brand name; product name; category, including disposable electronic cigarette, power unit, device, and e-liquid cartridge; and flavor for each electronic smoking device and e‑liquid containing nicotine that is sold in the State.

     (c)  Each annual certification form shall be accompanied by:

     (1)  A copy of:

          (A)  The marketing granted order issued by the FDA pursuant to title 21 United States Code section 387j;

          (B)  A copy of the acceptance letter issued by the FDA pursuant to title 21 United States Code section 387j for a timely filed premarket tobacco product application; or

         (C))  A document issued by FDA or by a court confirming that the premarket tobacco product application has received a denial order that has been and remains stayed by FDA or court order, rescinded by the FDA, or vacated by a court; and

     (2)  A payment of $250 for each electronic smoking device and e-liquid containing nicotine each time a manufacturer submits a certification form for that product.

     (d)  The information submitted by the manufacturer pursuant to subsection (c)(1) shall be considered confidential business or commercial information and shall not be disclosed pursuant to sections 92F-13 and 92F-19(b).  The manufacturer may redact certain confidential commercial or financial information under subsection (c)(1).

     (e)  A manufacturer required to submit a certification form pursuant to this section shall notify the department within thirty days of any material change to the certification form, including the issuance or denial of a marketing authorization or other order by the FDA pursuant to title 21 United States Code section 387j, or any other order or action by the FDA or any court that affects the ability of the electronic smoking device or e-liquid containing nicotine to be introduced or delivered into interstate commerce for commercial distribution in the United States.

     (f)  Beginning October 1, 2025, the department shall maintain and make publicly available on the department's official website a directory that lists all manufacturers of electronic smoking devices and e-liquids containing nicotine and all electronic smoking devices and e-liquids containing nicotine, including brand names, product names, categories, and flavors, for which certification forms have been submitted and approved by the department.  The department shall update the directory at least monthly to ensure accuracy, and shall establish a process to provide licensed retailers, dealers, distributors, and wholesalers and other relevant parties notice of the initial publication of the directory and changes made to the directory in the prior month.

     (g)  No manufacturer of electronic smoking devices and e‑liquids containing nicotine or electronic smoking devices or e‑liquids containing nicotine shall be included or retained in the directory if the department determines that any of the following apply:

     (1)  The manufacturer fails to provide a complete and accurate certification as required by subsection (a);

     (2)  The manufacturer submits a certification that does not comply with the requirements of subsections (b) and (c)(1);

     (3)  The manufacturer fails to include with its certification the payment required by subsection (c)(2);

     (4)  The manufacturer sells products in the State required to be certified under this section during a period when either the manufacturer or the product has not been certified and listed on the directory; or

     (5)  The information provided by the manufacturer in its certification is determined by the department to contain false information or contains material misrepresentations or omissions.

     (h)  The department shall provide manufacturers of electronic smoking devices or e-liquids containing nicotine  notice and an opportunity to cure deficiencies before removing manufacturers or products from the directory; provided that:

     (1)  The department shall not remove the manufacturer or the manufacturer's electronic smoking devices or e-liquids containing nicotine from the directory until at least thirty days after the manufacturer has been given notice of an intended action setting forth the reasons for the removal.  Notice shall be sufficient and be deemed immediately received by a manufacturer if the notice is sent either electronically or by facsimile to an electronic mail address or facsimile number, as the case may be, provided by the manufacturer in its most recent certification filed under subsections (b) and (c);

     (2)  The manufacturer shall have fifteen days from the date of service of the notice of the department's intended action to cure the deficiencies or otherwise establish that the manufacturer or its electronic smoking devices or e-liquids containing nicotine should be included in the directory;

     (3)  Retailers shall have thirty days following the removal of a manufacturer or its electronic smoking devices or e-liquids containing nicotine from the directory to sell the products that were in the retailer's inventory as of the date of removal; and

     (4)  Thirty days after the removal of a manufacturer or its products from the directory, the electronic smoking devices and e-liquids containing nicotine of a manufacturer identified in the notice of removal and intended for retail sale in the State or to a consumer in the State shall be subject to seizure from dealers, distributors, and retailers; forfeiture from dealers, distributors, and retailers; and destruction or disposal, and shall not be purchased or sold for retail sale or to a consumer in the State; provided further that the cost of the seizure, forfeiture, and destruction or disposal shall be borne by the person from whom the electronic smoking devices or e-liquids containing nicotine are confiscated.

     (i)  Beginning October 1, 2025, or on the date that the department makes the directory described in subsection (f) available for public inspection on the department's official website, whichever is later, electronic smoking devices and e-liquids containing nicotine not included in the directory shall not be sold for retail sale in the State or to a consumer in the State, either directly or through an importer, dealer, distributor, wholesaler, retailer, or similar intermediary or intermediaries; provided that:

     (1)  Each retailer shall have sixty days from the date that the department makes the directory available for inspection on the department's official website to sell electronic smoking devices and e‑liquids containing nicotine that were in the retailer's inventory and not included in the directory or remove those products from inventory;

     (2)  Each dealer, distributor, or wholesaler shall have sixty days from the date that the department makes the directory available for inspection on the department's official website to remove electronic smoking devices and e‑liquids containing nicotine intended for sale in the State from the dealer, distributor, or wholesaler's inventory; and

     (3)  Sixty days after publication of the directory, electronic smoking devices and e‑liquids containing nicotine not listed in the directory and intended for retail sale in the State or to a consumer in the State shall be subject to seizure, forfeiture, and destruction or disposal, and shall not be purchased or sold for retail sale in the State or to a consumer in the State except as provided in this subsection and subsection (h); provided that the cost of the seizure, forfeiture, and destruction or disposal shall be borne by the person from whom the products are confiscated.

     (j) The following penalties shall apply to violations of this section:

     (1)  A retailer, dealer, distributor, wholesaler, or importer who sells or offers for sale an electronic smoking device or e-liquid containing nicotine for retail sale in the State or to a consumer in the State that is not included in the directory described in subsection (f) shall be subject to a civil penalty of $500 for each individual electronic smoking device or e-liquid containing nicotine offered for sale in violation of this section; provided that:

          (A)  For a second violation under this paragraph within a twelve-month period, the civil penalty shall be at least $750 but no more than $1,000 per product and the licensee's license shall be suspended for fourteen days;

          (B)  For a third violation of under this paragraph within a twelve-month period, the civil penalty shall be at least $1,000 but no more than $1,500 per product and the licensee's license shall be suspended for 60 days; and

          (C)  For a fourth violation under this paragraph within a twelve-month period, the civil penalty shall be at least $1,000 but no more than $1,500 per product and the licensee's license shall be suspended for one year;

     (2)  A manufacturer whose electronic smoking devices or e‑liquids containing nicotine are not listed in the directory and who causes the products that are not listed to be sold for retail sale in the State or to a consumer in the State, whether directly or through an importer, dealer, distributor, wholesaler, retailer, or similar intermediary or intermediaries, shall be subject to a civil penalty of $10,000 for each individual electronic smoking device and e-liquid containing nicotine offered for sale in violation of this section.  In addition, any manufacturer that falsely represents any information required by a certification form shall be guilty of a misdemeanor for each false representation;

     (3)  In an action to enforce this section, the State shall be entitled to recover costs, including the costs of investigation, expert witness fees, and reasonable attorney fees; and

     (4)  Any second or subsequent violation of this section shall constitute an unfair method of competition and unfair and deceptive acts or practices in the conduct of any trade of commerce under section 480-2.

     (k)  Any nonresident manufacturer or foreign manufacturer of electronic smoking devices or e-liquids containing nicotine that has not registered to do business in the State as a foreign corporation or business entity shall, as a condition precedent to having the nonresident manufacturer's or foreign manufacturer's electronic smoking devices or e-liquids containing nicotine listed or retained in the directory described by subsection (f), appoint and continually engage without interruption the services of an agent in the United States to act as agent for the service of process upon whom all process, and any action or proceeding against it concerning or arising out of the enforcement of this section, may be served in any manner authorized by law.  Service under this section shall constitute legal and valid service of process on the manufacturer.  The nonresident manufacturer or foreign manufacture shall provide the name, address, phone number, and proof of the appointment and availability of the agent to, and to the satisfaction of, the department.

     (l)  In addition to the requirements of subsection (k), any nonresident manufacturer or foreign manufacturer of electronic smoking devices or e-liquids containing nicotine that has not registered to do business in the State as a foreign corporation or business entity shall, as a condition precedent to having the manufacturer's name or manufacturer's electronic smoking devices and e-liquids containing nicotine listed and retained in the directory described in subsection (f), submit to the department a surety bond or other cash security payable to the State in the amount of $25,000.  The bond shall be posted by a corporate surety located within the United States.  The bond shall be conditioned on the performance by the manufacturer of all requirements and obligations imposed by this section.  A surety on a manufacturer's bond shall be liable up to the amount of the bond, and the State may execute on the surety bond, for the payment of fines and penalties imposed on the manufacturer under this section and for the costs of seizure, forfeiture, and destruction or disposal of products sold in violation of this section.  If the State executes on the surety bond, the State may require the manufacturer to provide an additional bond as a condition precedent for retaining the manufacturer or its products in the directory.

     (m)  A surety on a bond furnished by a manufacturer as provided in subsection (l) shall be released and discharged from liability to the State accruing on the bond after expiration of sixty days from the date upon which the surety shall have lodged with the department a written request to be released and discharged.  This subsection shall not operate to relieve, release, or discharge the surety from liability already accrued or which shall accrue before the expiration of the sixty-day period.  The department shall, upon receiving any request, notify the manufacturer who furnished a bond pursuant to subsection (l) that, unless the manufacturer, on or before the expiration of the sixty-day period, files with the department a new bond as required under this section, with the surety approved by and acceptable to the department, the department shall remove the manufacturer and the manufacturer's products from the directory.

     (n)  Each retailer, wholesaler, and dealer that sells or distributes electronic smoking devices or e-liquids containing nicotine in the State shall be subject to at least two unannounced compliance checks annually for purposes of enforcing this section.  Unannounced follow-up compliance checks of all noncompliant retailers and wholesalers or dealers shall be conducted within thirty days after any violation of this section.  The department may examine the books, papers, and records of any dealer, distributor, wholesaler, or retailer in the State for the purpose of determining compliance with this section.  The department shall publish the results of all compliance checks at least annually and shall make the results available to the public on request.

     (o)  The department shall have authority to enforce compliance with this section and may adopt rules necessary to effectuate the purposes of this section.

     (p)  All fees and penalties collected pursuant to this section shall be used for administration and enforcement of this section.

     (q)  Beginning January 31, 2026, and annually thereafter, the department shall provide a report to the legislature regarding the status of the directory, manufacturers and electronic smoking devices and e-liquids containing nicotine included in the directory, revenue and expenditures related to administration of this section, and enforcement activities undertaken pursuant to this section.

     (r)  As used in this section:

     "FDA" means the United States Food and Drug Administration.

     "Timely filed premarket tobacco product application" means an application pursuant to title 21 United States Code section 387j for an electronic smoking device or e-liquid containing nicotine derived from tobacco marketed in the United States as of August 8, 2016, that was submitted to the FDA on or before September 9, 2020, and accepted for filing."

     SECTION 2.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2025.

 

INTRODUCED BY:

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Report Title:

Department of Taxation; Cigarette and Tobacco Tax; Electronic Smoking Devices; E-liquids; Directory; Penalties

 

Description:

Requires electronic smoking device and e-liquid manufacturers to submit certifications with the Department of Taxation annually, stating that the manufacturer's products comply with federal regulations.  Requires the Department of Taxation to maintain a directory of manufacturers of electronic smoking devices and e-liquids whose certifications the Department approved.  Imposes penalties.

 

 

 

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