HB 2158

This bill creates the tobacco product enforcement fund and requires fees and penalties collected pursuant to this bill to be deposited in it. Money in the fund must not revert to the general fund but must remain available for use by the alcoholic bevera ge commission for the administration and enforcement of law relative to the sale and distribution of alcohol, tobacco, and hemp derived cannabinoid products. LICENSURE REQUIREMENT This bill requires tobacco product retailers to obtain a license from the alcoholic beverage commission ("commission"") and to prominently display the license in a publicly visible location at the licensed location and on the establishment's website. An application for such a license must include all of the following:  The name, address, and telephone number of the applicant.  The business name, address, and telephone number of each location for which a license is sought.  The name and mailing address authorized by each applicant to receive all communications and notices required by, authorized by, or for the purpose of enforcing this bill.  Proof that each location for which a tobacco product retailer's license is sought has been issued all necessary state and local licenses and permits for the operation of the business and for each product sold at each location .  Whether or not an applicant has admitted violating, or has been found to have violated, this bill or another local, state, or federal law governing the sale of tobacco products and, if so, the dates and locations of all such violations within the previous fiv e years .  A signed affidavit affirming that the applicant has not sold and will not sell a tobacco product without a license required by this bill.  Whether the retailer engages in the sale of all tobacco products, including vapor products, or only non-vapor tobacco products .  Whether the retail location will operate a tobacco product vending machine, or function as a cigar bar, retail tobacco store, or retail vapor product store, and proof that the venue meets the definition of those establishments .  A statement by the applicant that the contents of the application are complete, true, and correct .  The signature of the applicant .  Any other information deemed necessary by the commission. Further, this bill requires applicants to inform the commission of any change in the information submitted on an application within 30 business days. This bill authorizes the commission to approve or deny the application for a license, or to delay action to complete an investigation of the application or applicant as deemed necessary. However, the commission is prohibited from issuing a license to an applicant that meets any of the following criteria:  The applicant has been convicted of a felony under the laws of this state, any other state, or the United States.  The applicant has had a state or local license or permit in this state related to the sale or distribution of tobacco products revoked.  The applicant is not at least 21.  The applicant intends to carry on the business authorized by the license as the agent or on behalf of another .  The applicant seeks authorization for a tobacco product retailer's license at a moveable place of business .  The applicant has not paid fees or penalties resulting from a violation of this bill; the Prevention of Youth Access to Tobacco, Smoking Hemp, and Vapor Products Act; the Children's Act for Clean Indoor Air; the Non-Smoker Protection Act.  The applicant has not paid taxes owed pursuant to the tobacco tax imposed by present law.  The applicant has a history of noncompliance with federal, state, or local laws, rules, or regulations relating to the sale of tobacco products. This bill authorizes a tobacco product retailer who is denied a license to petition for a redetermination of the commission's denial. This bill requires an initial application for an annual tobacco product retail license or a renewal license to include a fee of $250 when the initial application is submitted for review. A license must not be issued until the fee has been paid to the co mmission. All fees are nonrefundable, except as may be required by law. This bill provides that a tobacco product retailer's license is valid for one year from the date of issuance. An applicant must apply for the renewal of their license at least 30 days, but not more than 60 days, from the expiration date of the current l icense. If an applicant fails to submit their renewal application and fee on time, then the retailer is ineligible for license renewal and must instead submit a new initial application. This bill provides that a tobacco product retailer's license is not assignable or transferrable from one person or one location to another. A new tobacco product retailer's license is required whenever a retail location has a change in ownership. PENALTIES This bill authorizes the commission to assess a civil penalty of $500 and to suspend or revoke a tobacco product retailer's license if the commission finds, based on the preponderance of the evidence, that the tobacco product retailer or its agents or em ployees (i) have violated this bill or a rule of the commission or (ii) have violated any other local, state, or federal law applicable to the sale of tobacco products. Further, if a tobacco product retailer sells or offers for sale a tobacco product to a person under 21, then the commission may assess a civil penalty of $2, 500 for a first violation. For a second or subsequent violation, the commission may assess a civil penalty of $20, 000, and may suspend the license of the retailer. This bill provides that a tobacco product retailer is liable for all violations committed by its agent or employee, and all penalties assessed are the responsibility of the retailer. A penalty of the commission is appealable within 10 days of receiving notice of the issuance of the penalty. SEIZURE OF CONTRABAND This bill authorizes the commission to seize any tobacco products sold or offered for sale in violation of this bill or rules of the commission without a warrant, as such products are deemed contraband. Further, a tobacco product retailer who possessed o r offered for sale tobacco products in violation of this bill or a rule of the commission is responsible for reimbursing the costs of transportation, storage, and disposal of the seized property to the commission. This bill requires a notice of a seizure to be given to the tobacco product retailer and the person from which the property was seized via United States certified mail. Such notice must inform the tobacco product retailer or person in possession of the right to file a claim for return of the seized property. This bill requires the tobacco product retailer or the person from whom the property was seized to file a claim for the return of the property with the director within 30 days of receiving the noti ce of seizure. This bill provides that, if the claim is not filed within 30 days, the tobacco product retailer or person forfeits any interest in the property. This bill requires the director of the commission to hold a hearing upon receipt of a claim to recover seized property. At the hearing, the director of the commission must find, by a preponderance of the evidence, that the tobacco product retailer or pe rson was not in compliance with this bill or a rule of the commission. If such a finding is not made, this bill requires the director of the commission to return the seized property. This bill requires the director of the commission to grant or deny the c laim for return of the property by mailing a notice of final determination to the tobacco product retailer or person who made the claim. AGE VERIFICATION This bill prohibits a tobacco product retailer from selling a tobacco product to another person without first verifying that the recipient is at least 21 by means of a government-issued photo identification card. Further, a tobacco product retailer oper ating an age-restricted venue must require a government-issued photo identification card from a person who enters the venue at the point of entry to ensure they are at least 21. This bill requires a licensed tobacco product retailer to post a sign stating: STATE LAW STRICTLY PROHIBITS THE SALE OF TOBACCO PRODUCTS, INCLUDING VAPOR PRODUCTS, TO PERSONS UNDER THE AGE OF TWENTY-ONE (21) YEARS. PROOF OF AGE IS REQUIRED, within six feet of each register where tobacco products are available for purchase. DELIVERY SALES Present law authorizes delivery sales of cigarettes ordered by or through the mail, a delivery service, the internet, telephone, or some other electronic method to be shipped or transported to persons in this state if the appropriate Tennessee tax has be en paid. This bill, instead, requires all sales of tobacco products to be conducted in-person in a licensed location. Further, a licensed tobacco product retailer or the retailer's agents or employees, are prohibited from selling, offering for sale, or deliverin g a tobacco product to a consumer in a manner other than an in-person, over-the-counter transaction at the location of the tobacco product retailer's licensed retail store. COMPLIANCE CHECKS This bill requires the commission to monitor compliance with this bill and commission rules. Further, all licenses premises are required to be open to inspection by the commission during regular business hours. The commission must conduct a compliance check of each licensed tobacco product retailer's premises at least once a year. However, this bill requires a lottery system to conduct licensee compliance checks using a person under 21 to attempt to purchase a tobacco product at the licensed premises. The commission is required to prescribe by rule the way to conduct a compliance check via the lottery system and the percentage of licensees that must be checked by lottery each year. This bill requires the commission to conduct an additional unannounced compliance check within 180 days after a licensed tobacco product retailer violates this bill, a rule of the commission, or the Prevention of Youth Access to Tobacco, Smoking Hemp, an d Vapor Products Act. LICENSE DATABASE This bill requires the commission to create, maintain, and publish an online database that lists the active licensed tobacco product retailers, and to update such database at least monthly. Such database must include all of the following for each license e:  The business name, address, telephone number, and website .  The license holder, address, and telephone number .  The registered agent's name and address .  The date the first license was issued .  The date the current license was issued .  The expiration date of the current license .  Whether tobacco products or non-vapor tobacco products, or both, are sold at the retail location .  Whether the retail location will operate a tobacco product vending machine, or function as a cigar bar, retail tobacco store, or retail vapor product store . This bill authorizes the commission to contract with a third-party service provider to create and maintain the database. This bill authorizes the commission to provide to, upon request, the department of health, the office of the attorney general, a law enforcement agency, and an agency authorized to enforce or administer federal, state, or local tobacco laws, information relating to each licensee operating within the jurisdiction of the requesting entity. However, the entity receiving such information must only use it in accordance with rules prescribed by the commission. CONFLICTS OF LAW This bill provides that, to the extent that this bill conflicts with another provision of state law, this bill controls. However, this bill clarifies that other provisions of state law remain enforceable. Further, the fees and penalties prescribed by t his bill are in addition to all other fees and penalties required or assessed under state law. RULEMAKING This bill authorizes the commission to promulgate rules to effectuate this bill."