Introduced Version






HOUSE BILL No. 1405

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DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-7-2; IC 7.1-1-3-6.5; IC 7.1-3-18.5-5; IC 7.1-5-10-24; IC 24-3-5.4-14; IC 35-46-1-1.7.

Synopsis: Tobacco matters. Defines "dissolvable tobacco product". Provides that a dissolvable tobacco product and small cigars are taxed for purposes of the tobacco products tax at a rate of 65% of the wholesale price of the dissolvable tobacco product or small cigars. Defines "blunt wrap". Requires the alcohol and tobacco commission to revoke a tobacco sales certificate of an establishment that sells blunt wraps if that establishment is not a tobacco business. Requires the attorney general to post in the tobacco master settlement agreement directory notice of any removal from the directory of a tobacco product manufacturer or brand family at least 90 days before the attorney general removes the tobacco product manufacturer or brand family from the directory. Provides that a distributor may not purchase cigarettes of a tobacco product manufacturer or brand family later than 30 days after the attorney general provides notice that the tobacco product manufacturer or brand family will be removed from the directory. Provides that the attorney general may not remove a particular brand style of cigarettes from the directory, for a period of one year, if the tobacco product manufacturer, for marketing purposes, voluntarily terminates fabrication or repackages the particular brand style. Provides that a blunt wrap may be sold only in an establishment that has as its primary purpose the sale of tobacco products (tobacco business). Provides that a person or retail establishment that knowingly: (1) sells or distributes a dissolvable tobacco product or blunt wrap to a person less than 18 years of age; or (2) purchases a dissolvable tobacco product or blunt wrap for delivery to a person less than 18 years of age; commits a Class C infraction. Provides that a
(Continued next page)

Effective: July 1, 2011.





Cherry




    January 18, 2011, read first time and referred to Committee on Public Policy.





Digest Continued

person who is less than 18 years of age who: (1) purchases a dissolvable tobacco product or blunt wrap; (2) accepts a dissolvable tobacco product or blunt wrap for personal use; or (3) possesses a dissolvable tobacco product or blunt wrap, commits a class C infraction. Provides that a dissolvable tobacco product or blunt wrap is considered a tobacco product for purposes of provisions relating to the regulation of tobacco vending machines.



Introduced

First Regular Session 117th General Assembly (2011)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2010 Regular Session of the General Assembly.

HOUSE BILL No. 1405



    A BILL FOR AN ACT to amend the Indiana Code concerning alcohol and tobacco.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 6-7-2-1.5; (11)IN1405.1.1. -->     SECTION 1. IC 6-7-2-1.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1.5. (a) As used in this chapter, "dissolvable tobacco product" means a smokeless tobacco product that dissolves in the mouth of the user.
     (b) The term does not include a product that:
        (1) contains nicotine;
        (2) does not contain tobacco; and
        (3) is used for the cessation of use of a tobacco or smokeless tobacco product.

SOURCE: IC 6-7-2-4.5; (11)IN1405.1.2. -->     SECTION 2. IC 6-7-2-4.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 4.5. As used in this chapter, "small cigar" means a cigar that weighs not more than three (3) pounds per thousand (1,000).
SOURCE: IC 6-7-2-5; (11)IN1405.1.3. -->     SECTION 3. IC 6-7-2-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 5. As used in this chapter, "tobacco product" means:
        (1) any product made from tobacco, other than a cigarette (as defined in IC 6-7-1-2), that is made for smoking, chewing, or both; or
        (2) snuff; or
        (3) dissolvable tobacco product.

SOURCE: IC 6-7-2-7; (11)IN1405.1.4. -->     SECTION 4. IC 6-7-2-7, AS AMENDED BY P.L.234-2007, SECTION 201, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 7. A tax is imposed on the distribution of tobacco products in Indiana. Tobacco products, other than a dissolvable tobacco product and small cigars, are taxed at the rate of twenty-four percent (24%) of the wholesale price of the tobacco products. A dissolvable tobacco product and small cigars are taxed at the rate of sixty-five percent (65%) of the wholesale price of the dissolvable tobacco product or small cigars. The distributor of the tobacco products is liable for the tax. The tax is imposed at the time the distributor:
        (1) brings or causes tobacco products to be brought into Indiana for distribution;
        (2) manufactures tobacco products in Indiana for distribution; or
        (3) transports tobacco products to retail dealers in Indiana for resale by those retail dealers.
SOURCE: IC 7.1-1-3-6.5; (11)IN1405.1.5. -->     SECTION 5. IC 7.1-1-3-6.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 6.5. "Blunt wrap" means an individual tobacco wrapper, also known as a wrap or roll-your-own cigar wrap, that is made wholly or in part from tobacco, including reconstituted tobacco, whether in the form of a tobacco leaf, sheet, or tube, if such a wrap is designed to be sold to individuals.
SOURCE: IC 7.1-3-18.5-5; (11)IN1405.1.6. -->     SECTION 6. IC 7.1-3-18.5-5, AS AMENDED BY P.L.94-2008, SECTION 39, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 5. (a) Subject to subsection (b), the commission may suspend the certificate of a person who fails to pay a civil penalty imposed for violating IC 35-46-1-10, IC 35-46-1-10.2, IC 35-46-1-11.5, or IC 35-46-1-11.7.
    (b) Before enforcing the imposition of a civil penalty or suspending or revoking a certificate under this chapter, the commission shall provide written notice of the alleged violation to the certificate holder and conduct a hearing. The commission shall provide written notice of the civil penalty or suspension or revocation of a certificate to the

certificate holder.
    (c) Subject to subsection (b), the commission shall revoke the certificate of a person upon a finding by a preponderance of the evidence that the person:
        (1) has violated IC 7.1-5-10-24, IC 35-45-5-3, IC 35-45-5-3.5, or IC 35-45-5-4;
        (2) has committed habitual illegal sale of tobacco as established under IC 35-46-1-10.2(h); or
        (3) has committed habitual illegal entrance by a minor as established under IC 35-46-1-11.7(f).

SOURCE: IC 7.1-5-10-24; (11)IN1405.1.7. -->     SECTION 7. IC 7.1-5-10-24 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 24. A blunt wrap may be sold only in a tobacco business (as defined in IC 35-46-1-1).
SOURCE: IC 24-3-5.4-14; (11)IN1405.1.8. -->     SECTION 8. IC 24-3-5.4-14, AS AMENDED BY P.L.24-2010, SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 14. (a) Not later than July 1 of each year, the attorney general shall make available to the public by publishing on accessIndiana (as operated under IC 4-13.1-2) a directory listing all brand families listed in certifications filed under section 13 of this chapter.
    (b) A directory described in subsection (a) shall not include the name or brand families of a nonparticipating manufacturer:
        (1) that fails to comply with section 13 of this chapter;
        (2) whose certification fails to comply with section 13(c) or 13(e) of this chapter, unless the attorney general determines that the failure has been remedied; or
        (3) that:
            (A) has filed a certification under section 13 of this chapter; and
            (B) poses an elevated risk for noncompliance, as determined by the attorney general under section 13.6(a) of this chapter;
        unless the nonparticipating manufacturer, or an importer that assumes joint and several liability with the nonparticipating manufacturer under section 13.5 of this chapter, posts a bond under section 13.6 of this chapter.
    (c) The directory may not include a tobacco product manufacturer or a brand family if the attorney general concludes that:
        (1) in the case of a nonparticipating manufacturer, all escrow payments required under IC 24-3-3-12 for any period for any brand family, whether or not listed by the nonparticipating manufacturer, have not been fully paid into a qualified escrow

fund governed by a qualified escrow agreement that has been approved by the attorney general; or
        (2) all outstanding final judgments, including interest on the judgments, for violations of IC 24-3-3 have not been fully satisfied for the tobacco product manufacturer or brand family.
    (d) The directory may not include a newly qualified nonparticipating manufacturer unless the newly qualified nonparticipating manufacturer posts a bond under section 13.6 of this chapter.
    (e) The attorney general shall update the directory as necessary to correct mistakes or to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of this chapter.
     (f) If a tobacco product manufacturer, for marketing purposes, voluntary terminates fabrication of a brand style contained in a brand family or the brand style is repackaged, the attorney general may not remove the name of the brand style from the directory earlier than one (1) year after the date the brand style was repackaged or fabrication ceased.
    (f) (g) This subsection applies to a notice sent by the attorney general to each distributor or stamping agent before July 1, 2011. The attorney general shall post in the directory and transmit by electronic mail or other means to each distributor or stamping agent notice of any removal from the directory of a tobacco product manufacturer or brand family not later than thirty (30) days before the attorney general removes the tobacco product manufacturer or brand family from the directory.
     (h) This subsection applies to a notice sent by the attorney general to each distributor or stamping agent after June 30, 2011. The attorney general shall post in the directory and transmit by electronic mail or other means to each distributor or stamping agent notice of any removal from the directory of a tobacco product manufacturer or brand family at least ninety (90) days before the attorney general removes the tobacco product manufacturer or brand family from the directory. A distributor or similar intermediary may not purchase cigarettes of a tobacco product manufacturer or brand family later than thirty (30) days after the attorney general posts and transmits notice under this subsection that the attorney general will remove the tobacco product manufacturer or brand family from the directory.
    (g) (i) Unless otherwise provided in an agreement between a tobacco product manufacturer and a distributor or stamping agent, a distributor or stamping agent is entitled to a refund from a tobacco

product manufacturer for any money paid by the distributor or stamping agent to the tobacco product manufacturer for any cigarettes of the tobacco product manufacturer or brand family that:
        (1) are in the possession of the distributor or stamping agent on; or
        (2) the distributor or stamping agent receives from a retailer after;
the date on which the tobacco product manufacturer or brand family is removed from the directory.
    (h) (j) Unless otherwise provided in an agreement between a retailer and a distributor, stamping agent, or tobacco product manufacturer, a retailer is entitled to a refund from a distributor, stamping agent, or tobacco product manufacturer for any money paid by the retailer to the distributor, stamping agent, or tobacco product manufacturer for any cigarettes of the tobacco product manufacturer or brand family that are in the possession of the retailer on the date on which the tobacco product manufacturer or brand family is removed from the directory.
    (i) (k) The attorney general shall not restore a tobacco product manufacturer or brand family to the directory until the tobacco product manufacturer pays a distributor, stamping agent, or retailer any refund due under subsection (g) (i) or (h). (j).
    (j) (l) A distributor or stamping agent shall provide and update as necessary an electronic mail address to the attorney general for purposes of receiving a notification required by this chapter.

SOURCE: IC 35-46-1-1.7; (11)IN1405.1.9. -->     SECTION 9. IC 35-46-1-1.7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1.7. As used in this chapter, "tobacco" includes:
        (1) chewing tobacco;
        (2) cigars, cigarettes, and snuff that contain tobacco; and
        (3) pipe tobacco;
        (4) blunt wraps (as defined in IC 7.1-1-3-6.5); and

         (5) a dissolvable tobacco product (as defined in IC 6-7-2-1.5).
SOURCE: ; (11)IN1405.1.10. -->     SECTION 10. [EFFECTIVE JULY 1, 2011] (a) IC 6-7-2-1.5 and IC 6-7-2-4.5, both as added by this act, and IC 6-7-2-5, as amended by this act, apply to a tobacco product:
        (1) brought into Indiana for distribution;

         (2) manufactured in Indiana for distribution; or
        (3) transported to a retail dealer in Indiana for resale by the retail dealer;
by a distributor after June 30, 2011.

     (b) This SECTION expires July 1, 2012.