HF 3713

as introduced - 91st Legislature (2019 - 2020) Posted on 02/24/2020 02:47pm

A bill for an act
relating to taxation; modifying the tobacco products excise tax; amending the
definition of tobacco products to include electronic delivery devices; creating a
definition of electronic delivery devices; imposing the tobacco products excise tax
on electronic delivery devices; establishing a tobacco prevention and cessation
account in the special revenue fund; appropriating money; amending Minnesota
Statutes 2018, sections 297F.01, by adding a subdivision; 297F.10, subdivision 2,
by adding a subdivision; Minnesota Statutes 2019 Supplement, section 297F.01,
subdivisions 19, 23; proposing coding for new law in Minnesota Statutes, chapter
144; repealing Minnesota Statutes 2019 Supplement, section 297F.01, subdivision
22b.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [144.398] ACTIVITIES TO PREVENT YOUTH USE OF TOBACCO,
TOBACCO-RELATED DEVICES, ELECTRONIC DELIVERY DEVICES.
new text end

new text begin (a) The balance in the tobacco prevention and cessation account created under section
297F.10, subdivision 3, is annually appropriated to the commissioner of health for activities
to prevent youth use of:
new text end

new text begin (1) tobacco and tobacco-related devices, as defined in section 609.685; and
new text end

new text begin (2) electronic delivery devices that deliver nicotine through inhalation of aerosol or
vapor from the device.
new text end

new text begin (b) Activities funded under this section must be research-based or based on proven
effective strategies or promising strategies.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2018, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 7a. new text end

new text begin Electronic delivery device. new text end

new text begin (a) "Electronic delivery device" means any device
that may be used to deliver aerosolized or vaporized nicotine or any other aerosolized or
vaporized substance to the person inhaling from the device, including but not limited to an
e-cigarette, e-cigar, e-pipe, vape pen, or e-hookah.
new text end

new text begin (b) Electronic delivery device includes:
new text end

new text begin (1) any component, part, or accessory of the device, whether or not marketed or sold
separately; and
new text end

new text begin (2) any substance that may be aerosolized or vaporized by the device, whether or not
the substance contains nicotine or is marketed or sold separately.
new text end

new text begin (c) Electronic delivery device does not include a battery or battery charger when sold
separately. Electronic delivery device also does not include any drugs, devices, or
combination products, as defined by the Federal Food, Drug, and Cosmetic Act, that have
been approved for sale by the United States Food and Drug Administration.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2019 Supplement, section 297F.01, subdivision 19, is amended
to read:

Subd. 19.

Tobacco products.

(a) "Tobacco products" means any product containing,
made, or derived from tobacco that is intended for human consumption, whether chewed,
smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or
any component, part, or accessory of a tobacco product, including, but not limited to, cigars;
cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking
tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing
tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds
and forms of tobacco; but does not include cigarettes as defined in this section. Tobacco
products includes deleted text begin nicotine solution products deleted text end new text begin electronic delivery devices new text end . Tobacco products
excludes any deleted text begin tobacco product deleted text end new text begin drugs, devices, or combination products, as defined by the
Federal Food, Drug, and Cosmetic Act, new text end that deleted text begin has deleted text end new text begin have new text end been approved new text begin for sale new text end by the United
States Food and Drug Administration deleted text begin for sale as a tobacco cessation product, as a tobacco
dependence product, or for other medical purposes, and is being marketed and sold solely
for such an approved purpose deleted text end .

(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4, tobacco
products includes a premium cigar, as defined in subdivision 13a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2019 Supplement, section 297F.01, subdivision 23, is amended
to read:

Subd. 23.

Wholesale sales price.

deleted text begin (a) deleted text end "Wholesale sales price" means the price at which
a distributor purchases a tobacco product.

deleted text begin (b) When a distributor sells a cartridge, bottle, or other package of a solution containing
nicotine that is part of a kit that also includes a product, device, component, part, or accessory
described in subdivision 22b:
deleted text end

deleted text begin (1) the wholesale sales price is the price at which the distributor purchases the kit; except
that
deleted text end

deleted text begin (2) if the distributor also separately sells the same package of solution containing nicotine
that is sold with the kit and can isolate the cost of the package of solution containing nicotine,
then the wholesale sales price includes only the price at which the distributor separately
purchases the package of the solution containing nicotine and any taxes, charges, and costs
listed in paragraph (c).
deleted text end

deleted text begin (c) deleted text end Wholesale sales price includes the applicable federal excise tax, freight charges, or
packaging costs, regardless of whether they were included in the purchase price.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2018, section 297F.10, subdivision 2, is amended to read:

Subd. 2.

Tax and use tax on tobacco products.

Revenue received from taxes on tobacco
products, new text begin other than electronic delivery devices as defined in section 297F.01, subdivision
7a, new text end as well as related penalties, interest, and license fees shall be deposited by the
commissioner in the state treasury and credited to the general fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2018, section 297F.10, is amended by adding a subdivision to
read:

new text begin Subd. 3. new text end

new text begin Tax on electronic delivery devices. new text end

new text begin A tobacco prevention and cessation account
is created in the special revenue fund. Revenue received from taxes on electronic delivery
devices, including related penalties, interest, and license fees, must be deposited by the
commissioner in the state treasury, with $15,000,000 each year credited to the tobacco
prevention and cessation account in the special revenue fund and the remaining revenue
credited to the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2019 Supplement, section 297F.01, subdivision 22b, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

APPENDIX

Repealed Minnesota Statutes: 20-6890

297F.01 DEFINITIONS.

Subd. 22b.

Nicotine solution products.

(a) "Nicotine solution products" means any cartridge, bottle, or other package that contains nicotine made or derived from tobacco, that is in a solution that is consumed, or meant to be consumed, through the use of a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means that produces vapor or aerosol. This paragraph expires December 31, 2019.

(b) Beginning January 1, 2020, "nicotine solution products" means any cartridge, bottle, or other package that contains nicotine, including nicotine made or derived from tobacco or sources other than tobacco, that is in a solution that is consumed, or meant to be consumed, through the use of a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means that produces vapor or aerosol.

(c) Nicotine solution products includes any electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device, and any batteries, heating elements, or other components, parts, or accessories sold with and meant to be used in the consumption of a solution containing nicotine.