HB2794

SECTION 1. Chapter 245, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§245- Electronic smoking device and e-liquid directory. (a) By August 1, 2024, and annually thereafter, every manufacturer of electronic smoking devices or e-liquid containing nicotine that is sold in the State, whether directly or through a distributor, wholesaler, retailer, or similar intermediary or intermediaries, shall certify under penalty of perjury on a form and in the manner prescribed by the department, that the manufacturer agrees to comply with this chapter and that:

(1) The manufacturer has received a marketing authorization or similar order for the electronic smoking device or e-liquid from the United States Food and Drug Administration pursuant to title 21 United States Code section 387j; or

(2) The electronic smoking device or e-liquid was marketed in the United States as of August 8, 2016; the manufacturer submitted a premarket tobacco product application for the electronic smoking device or e‑liquid to the United States Food and Drug Administration pursuant to title 21 United States Code section 387j on or before September 9, 2020; and the application either remains under review by the United States Food and Drug Administration or a final decision on the application is not otherwise in effect.

(b) A manufacturer shall submit a certification form that separately lists each electronic smoking device and e-liquid that is sold in the State.

(1) A copy of the marketing authorization or other order for the electronic smoking device or e-liquid issued by the United States Food and Drug Administration pursuant to title 21 United States Code section 387j, or evidence that the premarket tobacco product application for the electronic smoking device or e‑liquid was submitted to and received by the United States Food and Drug Administration and a final authorization or order has not yet taken effect; and

(2) A payment of $500 for each electronic smoking device and e-liquid the first time a manufacturer submits a certification form for that product and a payment of $250 annually thereafter for each electronic smoking device and e-liquid.

(d) A manufacturer required to submit a certification form pursuant to subsections (a) and (b) shall notify the department within thirty days of any material change to the certification form, including the issuance or denial of a marketing authorization or other order by the United States Food and Drug Administration pursuant to title 21 United States Code section 387j, or any other order or action by the United States Food and Drug Administration that affects the ability of the electronic smoking device or e-liquid to be introduced or delivered into interstate commerce for commercial distribution in the United States.

(e) The department shall maintain and make publicly available on the department's website a directory that lists all electronic smoking device and e-liquid manufacturers and electronic smoking devices and e-liquid for which certification forms have been submitted and shall update the directory as necessary to ensure accuracy.

(f) The department shall provide manufacturers notice and an opportunity to cure deficiencies before removing manufacturers or products from the directory; provided that:

(1) The department may not remove the manufacturer or its products from the directory until at least fifteen days after the manufacturer has been given notice of an intended action. Notice shall be sufficient and be deemed immediately received by a manufacturer if the notice is sent either electronically or by facsimile to an electronic mail address or facsimile number, as the case may be, provided by the manufacturer in its most recent certification filed under subsections (a) and (b); and

(2) The electronic smoking device or e-liquid manufacturer shall have fifteen business days from the date of service of the notice of the department’s intended action to establish that the electronic smoking device or e-liquid manufacturer or its products should be included in the directory.

(g) If a product is removed from the directory, the department shall publish notice of the removal on the department’s website. Each retailer and distributor or wholesaler shall have thirty days from the date of publication of the notice of removal to remove the product intended to be sold in the State from its inventory and return the product to the manufacturer for disposal. After thirty days following publication of the notice of removal from the directory, the electronic smoking devices and e-liquid of a manufacturer identified in the notice of removal and intended for sale in the State shall be considered contraband and shall be subject to seizure, forfeiture, and destruction, and shall not be purchased or sold in the State.

(h) Beginning October 1, 2024, a person shall not sell or offer for sale an electronic smoking device or e-liquid in the State that is not included in the directory described by subsection (e), and an electronic smoking device or e-liquid manufacturer shall not sell, either directly or through a distributor or wholesaler, retailer, or similar intermediary or intermediaries, an electronic smoking device or e-liquid in the State that is not included in the directory described by subsection (e).

(i) A retailer may purchase electronic smoking devices and e-liquid for resale only from a licensed wholesaler or dealer with a valid license issued pursuant to this chapter.

(j) The following penalties shall apply to violations of this section:

(1) A retailer who sells or offers for sale an electronic smoking device or e-liquid in the State that is not included in the directory or a retailer who sells or offers for sale in the State an electronic smoking device or e-liquid after thirty days following publication of the notice of removal of the product from the directory and intended for sale in the State shall be subject to a civil penalty of $250 per day for each product offered for sale in violation of this section until the offending product is removed from the market or until the offending product is properly listed on the directory; provided that:

(A) For a second violation within a twenty-four-month period, the department also shall suspend the permit of the permittee for at least fourteen days;

(B) For a third violation within a twenty-four-month period, the department shall suspend the permit of the permittee for at least sixty days; and

(C) For a fourth or subsequent violation within a twenty-four-month period, the department shall suspend the permit of the permittee for at least one year;

(2) A electronic smoking device or e-liquid manufacturer whose electronic smoking devices or e-liquid products are not listed in the directory and are sold in the State, whether directly or through a distributor or wholesaler, retailer, or similar intermediary or intermediaries, shall be subject to a civil penalty of $500 per day for each product offered for sale in violation of this section until the offending product is removed from the market or until the offending product is properly listed on the directory. In addition, any manufacturer that falsely represents any the information required shall be guilty of a misdemeanor for each false representation;

(3) Any violation of this section shall constitute an unfair method of competition and unfair and deceptive acts or practices in the conduct of any trade of commerce under section 480-2; and

(4) In any action brought by the State to enforce this section, the State shall be entitled to recover the costs of investigation and prosecution, expert witness fees, court costs, and reasonable attorney fees.

(k) The department shall have authority to enforce compliance with this section, and may adopt rules necessary to effectuate the purposes of this section.

(l) The department may examine the books, papers, and records of any distributor, wholesaler, or retailer in the State, for the purpose of determining compliance with this section. The department may make the inspections and examinations at any time during ordinary business hours, and may inspect at the times the premises and all desks, safes, vaults, and other fixtures and furniture contained in or upon the premises for the purpose of ascertaining whether electronic smoking devices and e-liquid products are held or possessed in violation of this section.

(m) Any electronic smoking devices or e-liquid offered for sale in the State in violation of this section shall be declared to be contraband goods and may be seized by the department, the department's agents, or employees, or by any law enforcement officer of the State if directed by the department to do so, without a warrant.

(n) Each retailer and wholesaler or dealer that sells or distributes electronic smoking devices or e-liquid in the State shall be subject to at least two unannounced compliance checks annually for purposes of enforcing this section. Unannounced follow-up compliance checks of all noncompliant retailers and wholesalers or dealers shall be conducted within thirty days after any violation of this section. The department shall publish the results of all compliance checks at least annually and shall make the results available to the public on request.

(o) Any nonresident or foreign manufacturer that has not registered to do business in the State as a foreign corporation or business entity shall, as a condition precedent to having its electronic smoking devices or e-liquid listed or retained in the directory, appoint and continually engage without interruption the services of an agent in the United States to act as agent for the service of process upon whom all process, and any action or proceeding against it concerning or arising out of the enforcement of this section may be served in any manner authorized by law. Service under this section shall constitute legal and valid service of process on the manufacturer. The manufacturer shall provide the name, address, phone number, and proof of the appointment and availability of the agent to, and to the satisfaction of, the department.

(p) Beginning January 31, 2025, and annually thereafter, the department shall provide a report to the legislature regarding the status of the directory, manufacturers and products included in the directory, revenue and expenditures related to administration of this section, and enforcement activities undertaken pursuant to this section.

(q) All fees and penalties collected pursuant to this section shall be used for administration and enforcement of this section."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect on July 1, 2024.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2794
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII