Passage of the Tobacco Modernization and Compliance Act of 2010
May 12, 2010
Summary of the new law (Minnesota Session Laws 2010, Chapter 305; SF 3055)
[Rather than face a veto of the entire bill as first introduced, legislators in both the Senate and the House passed amendments that deleted the only two sections of the bill that had fiscal notes attached—the section that defined little cigars as cigarettes for purpose of the excise tax and the section that called for the Department of Revenue to conduct a tax collection study.] Governor Pawlenty signed the bill into law on May 11, 2010. The new law will take effect August 1, 2010. Below is a brief summary of the key provisions of the newly enacted legislation.
Definition of “tobacco products” in the tobacco tax laws, Section 297F.01, subdivision 19
- The definition of “tobacco products” has been modified for excise tax purposes. Formerly, the definition encompassed products suitable for smoking or chewing. As amended, the definition applies to any type of product that contains, or is made or derived from tobacco and intended for human consumption. Products that are “chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means” are included, as are components, parts, or accessories of tobacco products.
- Little cigars will remain classified within the definition of “tobacco products” and will continue to be taxed at 70 percent of the wholesale price (35% of the wholesale price for the tobacco products excise tax + 35% of the wholesale price for the tobacco products health impact fee).
- Tobacco products that have been approved by the FDA for sale as tobacco cessation products or for other medical purposes, and are being marketed exclusively for such an approved purpose, are excluded from the definition and will not be taxed as tobacco products.
Prohibition of promotional distribution, Section 325F.77, subdivision 4
- Previously, this section prohibited distribution of smokeless tobacco products, cigarettes, cigars, pipe tobacco, or other tobacco products “suitable for smoking,” except that single servings could be distributed in tobacco stores. As amended, this provision prohibits distribution of all types of tobacco products, not just those intended for smoking, pursuant to the same exception.
Youth access regulatory and enforcement provisions, Section 461.12, subdivisions 1- 6
Subdivisions 1-6 of Section 461.12 adds “tobacco-related devices”—cigarette rolling papers and pipes—to the types of products already covered by municipal tobacco licensing and regulation laws. These provisions will apply to hookah pipes.
- Minn. Stat. § 461.12, subd. 1: This change modifies the authority of local communities – cities and town boards – to license and regulate the retail sale of tobacco by allowing them to license and regulate the retail sale of “tobacco-related devices,” defined in Minn. Stat. § 609.685, subd. 1(c) to include cigarette rolling papers and pipes for smoking.
- Minn. Stat. § 461.12, subd. 2: This provision has been amended to make a licensee subject to administrative penalties (the same penalties that apply to tobacco) if the licensee or his/her employee sells rolling papers or a pipe to someone under the age of 18: First offense ($75); second offense at same location within 24 months after the 1st violation ($200); third violation at same location within 24 months after the 1st violation ($250 and licensee’s license is suspended for at least 7 days).
- Minn. Stat. § 461.12, subd. 3: This amendment makes an individual who sells cigarette rolling papers or pipes to a person under the age of 18 subject to an administrative penalty of $50.
- Minn. Stat. § 461.12, subd. 4: This amendment provides that the court system will handle a youth’s purchase, possession, or consumption of tobacco-related devices in the same manner as is already in place with regard to youth purchase, possession, or consumption of tobacco.
- Minn. Stat. § 461.12, subd. 5: This amendment specifies that compliance checks may address not only youth purchases or attempted purchases of tobacco, but also youth purchases or attempted purchases of tobacco-related devices.
- Minn. Stat. § 461.12, subd. 6: The availability of an affirmative defense to the charge of selling tobacco has been amended to allow an affirmative defense to the charge of selling tobacco-related devices.
Prohibition against selling in open displays, Section 461.18, subdivision 1
- The prohibition against selling tobacco products in open displays will apply to all tobacco products that fall within the amended definition of “tobacco” in Section 609.685, subd. 1 (see below), thereby reaching new and novel products that are neither smoked nor chewed, but are otherwise consumed. The prohibition has also been amended by specifically including tobacco-related devices among the types of products that must be sold behind-the-counter. Cigarette rolling papers and pipes (including hookah pipes) cannot be sold in open displays, except in stores which derive at least 90 percent of their revenue from tobacco or tobacco-related products and where the retailer ensures that youth under the age of 18 cannot be present or permitted to enter at any time.
Definition of “tobacco” in youth access laws, Section 609.685, subdivision 1
The definition of “tobacco”—for purposes of the youth access provisions in the criminal code—has been amended to be consistent with the changes made to the definition of “tobacco products” in the tobacco tax law provisions (Section 297F.01, subd. 19, above), thereby expanding the definition to include all forms of tobacco products intended for human consumption, not just those intended for smoking or chewing. The same exemption applies—excluding tobacco products that have been approved by the FDA for sale as tobacco cessation products or for other medical purposes and are being marketed exclusively for such an approved purpose.
Criminal penalties for the sale of nicotine or lobelia delivery products to minors, Section 609.6855
An entirely new section of law has been added that prohibits the sale to minors of any nicotine delivery products or lobelia delivery products that are intended for human consumption but are “not tobacco.” Such products include nicotine-based electronic-cigarettes, lobelia-based electronic cigarettes (such as the e-mystick), and products like nicotine-laced water. Selling such products to anyone under the age of 18 is a misdemeanor. A second offense within 5 years of the first offense is a gross misdemeanor. A youth who possesses, purchases, or attempts to purchase such products is guilty of a petty misdemeanor. A youth who uses false identification to make a purchase is guilty of a misdemeanor. Products approved by the FDA for tobacco cessation or other medical purposes are exempted from the prohibition. These penalties mirror the penalties that pertain in the youth access to tobacco provisions of law.
The prohibition does not apply to products that have been approved or certified for legal sale by the FDA for tobacco use cessation, harm reduction or other medical purposes, and are being marketed and sold for that purpose.
New, novel features of the new legislation
The legislation contains certain provisions that appear to be new or novel among states, including: the prohibition on sales to youth of “tobacco-related devices” and the requirement that such items must be sold from behind the counter; the expansion of the definition of “tobacco products” to reach virtually all new tobacco products; and the regulation, for youth access purposes, of novel types of nicotine-delivery products and lobelia-delivery products, including those commonly referred to as electronic cigarettes, that are not FDA-approved or certified for tobacco cessation, harm reduction or other medical purposes.
The Public Health Law Center provides information and technical assistance on issues related to public health, but does not provide legal representation or advice. This correspondence should not be considered legal advice or a substitute for obtaining legal advice from an attorney. If you have specific legal questions, we recommend that you consult with an attorney familiar with the laws of your jurisdiction.