SENATE BUDGET AND APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

SENATE, No. 3265

 

with committee amendments

 

STATE OF NEW JERSEY

 

DATED:  JANUARY 9, 2020

 

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 3265, with committee amendments.

      This bill, as amended, prohibits the sale, offer for sale, and distribution of vapor products that have a “characterizing flavor” other than tobacco.  As used in the bill, “characterizing flavor” means the vapor product, or any smoke or vapor emanating from the product, imparts a distinguishable flavor, taste, or aroma prior to or during consumption, including, but not limited to, any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, herb, mint, menthol, wintergreen, or spice flavoring; or the vapor product is advertised or marketed as having or producing any such flavor, taste, or aroma.

      As used in the bill, “vapor product” means any device that may be used to deliver any aerosolized or vaporized substance to the person inhaling from the device, as well as any component, part, or accessory of the device and any substance that may be aerosolized from the device, regardless of whether the substance contains nicotine.

      A retailer who violates the prohibition established under the bill will be liable to a civil penalty of not less than $500 for the first violation, not less than $1,000 for the second violation, and not less than $2,000 for the third and each subsequent violation, to be collected in a summary proceeding before the municipal court having jurisdiction.  Penalties will be recovered by and in the name of the State by the local health agency, and will be paid into the treasury of the municipality in which the violation occurred for the general uses of the municipality.  In addition, licensed vapor businesses will be subject to a mandatory three-year license suspension following a third and each subsequent violation, and may be subject to license revocation upon a fourth or subsequent violation, if recommended by the municipality.  Licensed vapor businesses subject to averse licensure action will also be subject to administrative charges.

      The prohibitions in the bill will not apply to medical cannabis, paraphernalia, or related supplies dispensed to or on behalf of a registered medical cannabis patient by an alternative treatment center pursuant to the provisions of the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.).

      The bill will take effect 90 days after the date of enactment.

COMMITTEE AMENDMENTS:

      The committee amendments double the penalties that would have been assessed under the bill as introduced, from $250 for a first violation, $500 for a second violation, and $1,000 for a third or subsequent violation, to $500 for a first violation, $1,000 for a second violation, and $2,000 for a third or subsequent violation.  The amendments clarify that the penalty is to be assessed against the retailer.

      The committee amendments add a provision establishing a mandatory three-year license suspension following a third and each subsequent violation, along with administrative charges, for licensed vapor businesses.  The committee amendments also provide that a license may be revoked following a fourth or subsequent violation, if recommended by the municipality.

      The committee amendments add language clarifying that the prohibition against flavored vapor products does not apply to medical cannabis dispensed under the State medical cannabis program.

      The committee amendments clarify that “characterizing flavor” does not include tobacco-flavored vapor products.

      The committee amendments revise the definitions used under the bill to replace “electronic smoking device” with “vapor product,” and to clarify that “characterizing flavor” includes menthol, mint, and wintergreen.

      The committee amendments revise the effective date of the bill to provide it will take effect 90 days after the date of enactment, rather than immediately.

 

FISCAL IMPACT:

      The Office of Legislative Services (OLS) finds that the bill will cause indeterminate annual expenditure increases to the Department of Law and Public Safety, the Administrative Office of the Courts, municipal courts, and local health departments from the additional workload to implement the provisions of the bill and adjudicate violations.  The OLS also concludes that the bill’s impact on State revenues is uncertain.  The bill may discourage consumers from purchasing certain vapor products, which in turn would reduce State revenue collections from taxes imposed on those products.  If the bill results in consumer shifts to other products, such as non-flavored vapor products, cigarettes, or tobacco products, the State may see an offsetting revenue effect or additional revenue collections from the higher tax rates imposed on those alternative products.  The OLS also finds this legislation will result in additional annual municipal revenue from penalties received from individuals in violation of the bill’s provisions.