HB3772 - 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.

  89R10741 MCF-F     By: Craddick H.B. No. 3772       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.  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:                       (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 sale,   use, or consumption;                       (B)     manufactures or produces e-cigarette   products; 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)     "Retailer" means a person who engages in the sale   of e-cigarettes to consumers and includes the owner of a   coin-operated e-cigarette vending machine.   The term includes an   e-cigarette retailer as defined by Section 147.0001.                 (5)     "Wholesaler" means a person, including a   manufacturer's representative, who sells or distributes   e-cigarettes in this state for resale but who is not a distributor   or interstate warehouse.           Sec.   161.0952. APPLICABILITY. This subchapter applies only   to an e-cigarette that contains nicotine.           Sec.   161.0953.     CERTIFICATION AND FEES. (a) Each   manufacturer of e-cigarettes sold 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 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.           (d)     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.           (e)     The form the comptroller prescribes under this section   must include the brand name, product name, flavor, and category of   the e-cigarette product certified by the manufacturer.           (f)     The information a manufacturer submits under this   section is exempt from disclosure under Chapter 552, Government   Code.   A manufacturer may redact certain confidential commercial or   financial information on the documents required under Subsection   (c).           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 which the required forms,   fees, and certifications have been 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 by which   importers, distributors, wholesalers, retailers, and other   relevant parties may receive notification of directory updates for   the preceding month.           Sec.   161.0955.     OUT-OF-STATE MANUFACTURERS AND IMPORTERS.   (a) A manufacturer not registered to conduct business in this state   must designate and continually engage the services of a registered   agent in this state.           (b)     A manufacturer not located in the United States may only   employ or contract with an importer who designates a registered   agent in this 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)     A manufacturer shall provide written notice to the   comptroller not later than the 30th day before the date the   manufacturer or the manufacturer's importer, as applicable,   terminates a registered agent's designation. Not later than the   fifth day before the date the termination is effective, the   manufacturer shall provide to the comptroller any information about   the replacement the comptroller requests, including the name,   address, and telephone number of the newly appointed registered   agent.           (e)     If the registered agent terminates an agency   designation, the manufacturer shall:                 (1)     notify the comptroller not later than the fifth   day after the date of the termination; and                 (2)     include proof satisfactory to the comptroller that   a new agent has been appointed.           (f)     A manufacturer not registered to conduct business in   this state must file with the comptroller a surety bond or other   cash security payable to this state in the amount of $25,000. The   bond must be posted by a corporate surety located in the United   States.   The surety bond or cash security must be conditioned on the   performance by the manufacturer of all requirements and obligations   under this subchapter.           (g)     The liability of the surety of a bond described by   Subsection (f) may not exceed the amount of the bond for the payment   of fines, penalties, and costs of seizure, destruction, and   disposal imposed on a manufacturer under this subchapter.             (h)     If payment executed from a bond under Subsection (g) is   required, the comptroller may require a manufacturer to submit to   the comptroller an additional bond or cash security.             (i)     The comptroller may not include in the directory a   manufacturer who has not complied with this section or the   manufacturer's e-cigarettes.           Sec.   161.0956.     SURETY RELEASE FROM LIABILITY. (a)   The   comptroller shall release and discharge from liability to this   state a surety on a bond a manufacturer furnishes in accordance with   Section 161.0955 on the 60th day after the date the surety company   files with the comptroller a written request to be released and   discharged.           (b)     A request described by Subsection (a) does not relieve,   release, or discharge the surety company from a liability accrued   before expiration of the 60 days.           (c)     The comptroller, promptly on receipt of the request   under Subsection (a), shall notify the manufacturer who furnished   the bond that unless the manufacturer, before the expiration date   of the existing security, files with the comptroller a new bond with   a surety company located in the United States, or other authorized   security, in the amount required by Section 161.0955, the   comptroller shall remove the manufacturer and the manufacturer's   e-cigarettes from the directory.           Sec.   161.0957.     EXCLUSION AND REMOVAL FROM DIRECTORY. (a)   The comptroller may not include or retain in the directory a   manufacturer or a specific e-cigarette produced by that   manufacturer if the manufacturer:                 (1)     failed to provide a complete and accurate   certification form, including the fee, required under Section   161.0953 with respect to an e-cigarette;                 (2)     sold an e-cigarette in this state for which either   the e-cigarette or the manufacturer was not certified in accordance   with this subchapter; or                 (3)     provided in the manufacturer's certification form   or other submitted documents information the comptroller   determined to be false or to contain a material misrepresentation   or omission.           (b)     The comptroller may not remove a manufacturer or   specific e-cigarette from the directory for a reason described by   Subsection (a) unless:                 (1)     the comptroller provides to the manufacturer   notice that the manufacturer or an e-cig [Text truncated for display. 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