SB1698 - Relating to the sale of certain e-cigarettes in this state and a directory of e-cigarette manufacturers and their products; authorizing fees; authorizing administrative and civil penalties; creating a criminal offense.

      By: Parker  S.B. No. 1698          (In the Senate - Filed February 27, 2025; March 11, 2025,   read first time and referred to Committee on State Affairs;   May 5, 2025, reported adversely, with favorable Committee   Substitute by the following vote:  Yeas 9, Nays 0; May 5, 2025, sent   to printer.)     COMMITTEE SUBSTITUTE FOR S.B. No. 1698 By:  Parker     A BILL TO BE ENTITLED   AN ACT     relating to the sale of certain e-cigarettes in this state and a   directory of e-cigarette manufacturers and their products;   authorizing fees; authorizing administrative and civil penalties;   creating a criminal offense.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 161.0876(b), Health and Safety Code, is   amended to read as follows:          (b)  A person commits an offense if the person markets,   advertises, sells, or causes to be sold an e-cigarette product, if   the product's container:                (1)  depicts a cartoon-like fictional character that   mimics a character primarily aimed at entertaining minors;                (2)  imitates or mimics trademarks or trade dress of   products that are or have been primarily marketed to minors;                (3)  includes a symbol that is primarily used to market   products to minors;                (4)  includes an image of a celebrity; [ or ]                (5)  includes an image that resembles a food product,   including candy or juice ; or                 (6)     attempts to conceal the nature of the e-cigarette   product from consumers or falsely represents that the product does   not contain nicotine .          SECTION 2.  Subchapter H, Chapter 161, Health and Safety   Code, is amended by adding Section 161.0904 to read as follows:           Sec.   161.0904.     E-CIGARETTE DISTRIBUTOR REGISTRATION   REQUIRED; CRIMINAL OFFENSE.   (a)   In this section, "distributor"   has the meaning assigned by Section 161.0951.           (b)     A person may not engage in business as an e-cigarette   distributor in this state unless the person is registered with the   comptroller in accordance with this section.           (c)     A person must register each place of business the person   owns or operates as an e-cigarette distributor.   The comptroller   may not register as an e-cigarette distributor a place of business   located at a residence or in a public storage facility unit.           (d)     The comptroller shall prescribe the form and content of   the e-cigarette distributor registration application.   An   applicant shall accurately complete all information required on the   application and provide to the comptroller any additional   information the comptroller considers necessary.           (e)     A person who engages in business as an e-cigarette   distributor without registering with the comptroller as required by   this section commits an offense. An offense under this subsection   is a Class B misdemeanor.          SECTION 3.  Chapter 161, Health and Safety Code, is amended   by adding Subchapter I to read as follows:   SUBCHAPTER I. E-CIGARETTE DIRECTORY           Sec. 161.0951.  DEFINITIONS. In this subchapter:                 (1)     "Directory" means the e-cigarette directory   maintained by the comptroller under Section 161.0954.                 (2)     "Distributor" means a person who is not an   interstate warehouse and who:                       (A)     receives from a manufacturer e-cigarette   products for a first sale in this state or otherwise brings or   causes to be brought into this state e-cigarette products for   retail sale, use, or consumption in this state;                       (B)     manufactures or produces e-cigarette   products for retail sale in this state; or                       (C)     ships, transports, or imports into this state   e-cigarette products manufactured or produced outside the United   States for a first sale in this state.                 (3)     "E-cigarette" has the meaning assigned by Section   161.081.                 (4)     "Interstate warehouse"   has the meaning assigned by   Section 154.001 or 155.001, Tax Code, as applicable.                 (5)     "Retailer" means a person who engages in the sale   of e-cigarettes to consumers, including an e-cigarette retailer as   defined by Section 147.0001.                 (6)     "Wholesaler" means a person, including a   manufacturer's representative, who sells or distributes   e-cigarettes in this state for resale in this state but who is not a   distributor or interstate warehouse.           Sec.   161.0952. APPLICABILITY. This subchapter applies only   to an e-cigarette that contains nicotine from any source.           Sec.   161.0953.     CERTIFICATION AND FEES. (a) Each   manufacturer of e-cigarettes sold for retail sale, use, or   consumption in this state, whether directly or through an importer,   distributor, wholesaler, retailer, or similar intermediary, shall   annually certify under penalty of perjury, on a form the   comptroller prescribes, that the manufacturer agrees to comply with   this subchapter and:                 (1)     the manufacturer holds for the manufacturer's   e-cigarettes a marketing authorization or similar order issued by   the United States Food and Drug Administration under 21 U.S.C.   Section 387j; or                 (2)     the e-cigarette manufactured by the manufacturer   was marketed in the United States as of August 8, 2016, and the   manufacturer submitted a premarket tobacco product application for   the e-cigarette to the United States Food and Drug Administration   under 21 U.S.C. Section 387j before September 8, 2020, and either:                       (A)     the application is under review by the United   States Food and Drug Administration; or                         (B)     a final decision on the application has not   taken effect.           (b)     Each manufacturer of e-cigarettes shall submit a   separate certification form under Subsection (a) for each   e-cigarette product the manufacturer sells in this state.           (c)     A manufacturer is not required to submit an additional   marketing authorization or similar order or premarket tobacco   product application for an e-cigarette for which the manufacturer   previously submitted a marketing authorization or similar order or   premarket tobacco product application for a change in the name,   brand style, or packaging of the e-cigarette.           (d)     A manufacturer required to submit a certification form   under Subsection (a) shall, at the time of certification, submit to   the comptroller:                 (1)  either, as applicable:                       (A)     a copy of the marketing authorization or   other order for the e-cigarette issued by the United States Food and   Drug Administration under 21 U.S.C. Section 387j; or                         (B)     evidence the premarket tobacco product   application for the e-cigarette was submitted to the United States   Food and Drug Administration and a final authorization or order has   not taken effect; and                 (2)  a fee of $2,500.           (e)     A manufacturer required to submit a certification form   under Subsection (a) shall notify the comptroller not later than   the 30th day after the date the certification form is submitted of   any material change to the information included in the   certification form, including:                 (1)     the subsequent issuance or denial of a marketing   authorization or other order by the United States Food and Drug   Administration under 21 U.S.C. Section 387j; and                 (2)     any other order issued or action taken by the   United States Food and Drug Administration that affects the ability   of the e-cigarette to be introduced or delivered into interstate   commerce for commercial distribution in the United States.           (f)     Not later than the 30th day after the effective date of a   federal law, regulation, or guidance changing a standard or   requirement for an e-cigarette manufacturer, the manufacturer must   provide to the comptroller proof satisfactory to the comptroller of   the manufacturer's compliance with the law, regulation, or   guidance.           (g)     The comptroller may remove from the directory as   provided by Section 161.0957 the e-cigarettes of a manufacturer who   fails to comply with Subsection (f).           (h)     The certification form the comptroller prescribes under   this section must require   a manufacturer to list the brand name,   product name, flavor, and category of the e-cigarette the   manufacturer is certifying.           (i)     The information a manufacturer submits under this   section is exempt from disclosure under Chapter 552, Government   Code.   A manufacturer may redact in the manner prescribed by the   comptroller confidential commercial or financial information   included on the documents required under Subsection (d).           Sec.   161.0954.     E-CIGARETTE DIRECTORY. (a) The comptroller   shall maintain a directory listing all e-cigarette manufacturers   and e-cigarettes, including the brand name, product name, flavor,   and category of e-cigarette product, for the certifications   submitted to the comptroller under Section 161.0953.           (b)     The comptroller shall post the directory on the   comptroller's publicly accessible Internet website and update the   directory monthly to comply with this subchapter.           (c)     The comptroller shall establish a process to notify   importers, distributors, wholesalers, retailers, and other   relevant parties of directory updates for the preceding month.           Sec.   161.0955.     OUT-OF-STATE MANUFACTURERS AND IMPORTERS.   (a) A manufacturer not registered with the secretary of state to   conduct business in this state shall designate and continually   engage the services of an agent registered with the secretary of   state.           (b)     A manufacturer not located in the United States may only   employ or contract with an importer who designates an agent   registered with the secretary of state whose services the importer   continually engages.             (c)     A manufacturer described by Subsection (a) or (b) must   provide to the comptroller any information the comptroller requests   about the registered agent designated by the manufacturer or the   manufacturer's importer, as applicable, including the agent's name,   address, and telephone number.           (d)   [Text truncated for display. Full text available on LegiScan.]