Committee Report

March 05, 2024

 

S. 994

 

Introduced by Senators Alexander, Hutto, Verdin, Grooms, Kimbrell, Gambrell, Shealy, Hembree, McElveen, Davis, Young, Loftis, K. Johnson, McLeod, Martin, Senn, Garrett and Fanning

 

S. Printed 03/05/24--S.                                                                            [SEC 3/6/2024 7:07 PM]

Read the first time January 25, 2024

 

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The committee on Senate Medical Affairs

To whom was referred a Bill (S. 994) to amend the South Carolina Code of Laws by adding Section 44-95-65 so as to provide regulations for the sale of electronic nicotine delivery systems and to provide, etc., respectfully

Report:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

 

    Amend the bill, as and if amended, SECTION 1, by striking Section 44-95-65(1) and inserting:

    (1) "ENDS product" means an electronic nicotine delivery system intended for eventual retail sale in this State that is a non-combustible product that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size to produce vapor from nicotine in a solution. ENDS product include a consumable nicotine liquid solution suitable for use in an electronic nicotine delivery system, whether sold with the ENDS product or separately, but does not include any product regulated as a drug or device under Chapter V of the federal Food, Drug, and Cosmetic Act.

 

Renumber sections to conform.

Amend title to conform.

 

DANIEL VERDIN for Committee.

 

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A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 44-95-65 SO AS TO PROVIDE REGULATIONS FOR THE SALE OF ELECTRONIC NICOTINE DELIVERY SYSTEMS AND TO PROVIDE PENALTIES FOR VIOLATIONS OF THIS SECTION.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Chapter 95, Title 44 of the S.C. Code is amended by adding:

 

    Section 44-95-65.  (A) As used in this section:

    (1) "ENDS product" means an electronic nicotine delivery system that is a non-combustible product that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size to produce vapor from nicotine in a solution. ENDS product include a consumable nicotine liquid solution suitable for use in an electronic nicotine delivery system, whether sold with the ENDS product or separately, but does not include any product regulated as a drug or device under Chapter V of the federal Food, Drug, and Cosmetic Act.

    (2) "FDA" means the Federal Food and Drug Administration.

    (B) Every manufacturer of ENDS products that are sold in this State, whether directly or through a distributor, retailer, or similar intermediary, shall annually execute and deliver under penalty of perjury to the Attorney General on a form prescribed by the Attorney General a certification verifying either:

       (1) the ENDS product was on the market in the United States as of August 8, 2016, and the manufacturer has applied for a marketing order pursuant to 21 U.S.C. Section 387j for the ENDS product by submitting a premarket tobacco product application on or before September 9, 2020, to the FDA and either the premarket tobacco product application for the product remains under review by the FDA or the FDA has issued a marketing denial order for the product from the FDA but the agency or a federal court has issued a stay order or injunction; or

       (2) the manufacturer has received a marketing authorization under 21 U.S.C. Section 387j for the product from the FDA.

    (C) In addition to the requirements in subsection (B) of this section, each manufacturer shall provide a copy of the premarket tobacco application with evidence of receipt of the application by the FDA or a copy of the marketing authorization issued pursuant to 21 U.S.C. Section 387j, whichever is applicable.

    (D) Any manufacturer submitting a certification pursuant to subsection (B) shall notify the Attorney General within thirty days of any material change to the certification, including issuance by the FDA of:

       (1) a marketing authorization pursuant to 21 U.S.C. Section 387j;

       (2) an order revoking a marketing authorization with respect to a manufacturer or an ENDS product; or

       (3) any notice of action taken by the FDA affecting the ability of the new ENDS product to be introduced or delivered into interstate commerce for commercial distribution.

    (E) The Attorney General shall develop and maintain a directory listing all manufacturers of ENDS products that have provided certifications that comply with this section and all ENDS products that are listed in those certifications.

    (F) The Attorney General shall:

       (1) make the directory available for public inspection on its website;

       (2) update the directory as necessary to correct mistakes and to add or remove manufacturers of ENDS products manufactured by those manufacturers on a monthly basis; and

       (3) send monthly notifications to each wholesaler, retailer, or manufacturer of ENDS products that have registered with the Attorney General by electronic communication containing a list of all changes that have been made to the directory in the previous month. In lieu of sending monthly notifications, the Attorney General may make the information available in a prominent place on the Attorney General's public website.

    (G) The Attorney General shall provide manufacturers of ENDS products notice and an opportunity to cure deficiencies before removing manufacturers or ENDS products from the directory.

       (1) The Attorney General may not remove the manufacturer or its ENDS products from the directory until at least fourteen 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 electronically to an electronic mail address provided by the manufacturer in its most recent certification filed under subsection (B).

       (2) The manufacturer of an ENDS product shall have fourteen business days from the date of service of the notice of the Attorney General's intended action to establish that the manufacturer or its ENDS products should be included in the directory.

       (3) A determination by the Attorney General to not include or to remove from the directory a manufacturer or a manufacturer's ENDS product shall be subject to review in the manner provided by Article 3, Chapter 23 of Title 1.

    (H) A non-refundable fee of two thousand dollars for each ENDS product shall be paid the first time a manufacturer submits a certification form to offset the costs incurred by the Attorney General for processing the certifications and operating the directory. The Attorney General shall thereafter collect an annual renewal fee of five hundred dollars for each ENDS product to offset the costs associated with maintaining the directory and satisfying the requirements of this section. The fees received under this subsection, and any penalties collected under subsections (N) or (P), by the Attorney General shall be deposited into the general fund of the State. The Office of Attorney General and the State Law Enforcement Division must be funded by a state appropriation sufficient for processing the certifications and operating and maintaining the directory, and other directory enforcement purposes, including inspections and hazardous waste disposal.

    (I) A manufacturer of an ENDS product who offers for sale an ENDS product not listed on the directory is subject to a one thousand dollar daily fine for each product offered for sale in violation of this section until the offending ENDS product is removed from the market or until the offending ENDS product is properly listed on the directory.

    (J) If there is a material change to the status of an ENDS product requiring it to be removed from the directory, then each distributor shall have twenty-one days, and each retailer shall have forty-two days from the day the ENDS product is removed from the directory to remove the ENDS product from its inventory and return the ENDS product to the ENDS product's manufacturer for disposal.

    (K) The Attorney General, or his designee, the South Carolina Law Enforcement Division, or its designee, or the South Carolina Department of Revenue shall have the power to seize and destroy any ENDS products that are not listed on the directory and which are in possession of a distributor or retailer. The cost of seizure and destruction shall be borne by the distributor or retailer from whom the ENDS products are seized.

    (L) No retailer shall purchase ENDS products for resale except from a person licensed pursuant to Section 12-21-660.

    (M) No retailer, wholesaler, or distributor of ENDS products may sell, offer for sale, or otherwise distribute an ENDS product not listed on the directory.

    (N) If a retailer, wholesaler, or distributor violates subsection (M), the retailer, wholesaler, or distributor is subject to a civil penalty of:

       (1) not more than five hundred dollars for a first violation;

       (2) at least seven hundred fifty dollars but not more than one thousand dollars for a second violation within a thirty-six-month period;

       (3) at least one thousand dollars but not more than one thousand five hundred dollars for a third violation within a thirty-six-month period; or

       (4) at least one thousand five hundred dollars but not more than three thousand dollars for a fourth or any subsequent violation within a thirty-six-month period.

    (O) Any manufacturer of ENDS products that falsely represents any the information required by subsection (B) or (C) shall be guilty of a misdemeanor for each false representation.

    (P) Any other violation of this section shall result in a fine of five hundred dollars per offense.

    (Q) In any action brought by the Attorney General to enforce this section, the Attorney General shall be entitled to recover the costs of investigation, expert witness fees, costs of the action, and reasonable attorney's fees.

    (R) A person who violates the provisions of subsection (M) engages in an unfair and deceptive trade practice in violation of Title 39, Chapter 5 - Unfair Trade Practices.

    (S) Each retailer, wholesaler, and distributor may be subject to unannounced compliance checks for purposes of enforcing this section. Unannounced follow-up compliance checks of all noncompliant retailers, wholesalers, and distributors are required within thirty days after any violation of this section. The Attorney General shall make the results of all compliance checks available to the public on request.

    (T) The Attorney General may promulgate regulations for the implementation and enforcement of this section.

 

SECTION 2.  (A) The first certification required pursuant to Section 44-95-65(B) shall be required July 1, 2024.

    (B) The directory established pursuant to Section 44-95-65(E) shall be operational by September 1, 2024, or on the date that the Attorney General first makes the directory available, whichever is later. The Attorney General shall notify retailers, wholesalers, and distributors of ENDS products when the directory is operational.

    (C) The provisions contained in Section 44-95-65(I) and (M) shall be effective on the date that the directory established pursuant to Section 44-95-65(E) is operational.

 

SECTION 3.  This act takes effect upon approval by the Governor.

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