HB 1425 — An act amending the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, in cigarette sales and licensing, further providing for definitions and providing for presumed cost of doing business by retailer; providing for tobacco products; and making repeals.

PRINTER'S NO.   1660

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1425
                                                Session of
                                                  2025

     INTRODUCED BY McNEILL, JAMES, BRIGGS, SHUSTERMAN, SANCHEZ,
        VENKAT, GIRAL, HILL-EVANS, STEELE, SCHLOSSBERG, KHAN,
        FREEMAN, SAMUELSON, HADDOCK, ECKER, KAIL, KLUNK, REICHARD,
        SCHWEYER, MULLINS AND MARCELL, MAY 7, 2025

     REFERRED TO COMMITTEE ON JUDICIARY, MAY 7, 2025


                                       AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," in tobacco products tax, further providing for
11      definitions, for incidence and rate of tax, for licensing of
12      wholesalers and for licensing of retailers and providing for
13      Nicotine Electronic Cigarette Directory.
14      The General Assembly of the Commonwealth of Pennsylvania
15   hereby enacts as follows:
16      Section 1.     The definition of "contraband" in section 1201-A
17   of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
18   Reform Code of 1971, is amended and the section is amended by
19   adding definitions to read:
20   Section 1201-A.    Definitions.
21      The following words and phrases when used in this article
22   shall have the meanings given to them in this section unless the
 1   context clearly indicates otherwise:
 2      "Brand family."   All styles of electronic cigarettes that
 3   contain nicotine, sold under the same trademark and
 4   differentiated from another style by means of additional
 5   modifiers or descriptors. The term includes any brand name alone
 6   or in conjunction with any other word, trademark, logo, symbol,
 7   motto, selling message, recognizable pattern of colors or any
 8   other indicia of product identification identical or similar to
 9   or identifiable with a previously known brand of electronic
10   cigarettes that contain nicotine.
11      * * *
12      "Contraband."   Any tobacco product for which the tax imposed
13   by this article has not been paid[.] in accordance with this act
14   and any electronic cigarette that contains nicotine, which is
15   either not listed or is removed from the nicotine electronic
16   cigarette directory in violation of section 1235-A. The term
17   includes tobacco products for which property rights no longer
18   exist under this article and tobacco products sold, offered,
19   distributed or possessed for sale and tobacco products acquired,
20   held, owned, possessed, transported, imported or caused to be
21   imported that the person knows or should know are intended for
22   distribution or sale in this Commonwealth in violation of this
23   act.
24      "Costs of destruction."   The costs incurred from the time of
25   seizure through to the time of destruction. The term includes,
26   but is not limited to, costs of seizure, transportation, storage
27   and destruction, including personnel costs, wages and outside
28   contractor costs associated with the activities.
29      * * *
30      "FDA."   The United States Food and Drug Administration.

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 1      "Importer."    A person in any state or territory of the United
 2   States to whom electronic cigarettes that contain nicotine that
 3   are manufactured outside the United States are shipped,
 4   delivered or consigned for resale.
 5      * * *
 6      "Timely filed premarket tobacco product application."    An
 7   application under 21 U.S.C. § 387j (relating to application for
 8   review of certain tobacco products) for an electronic cigarette
 9   that contains nicotine derived from tobacco marketed in the
10   United States as of August 8, 2016, that was submitted to the
11   FDA on or before September 9, 2020, and was accepted for filing
12   by the FDA.
13      "Tobacco noncompliance database."    The database of persons,
14   including manufacturers, importers, distributors, wholesalers
15   and retailers, that are listed by the department on its publicly
16   accessible Internet website in accordance with section 1235-
17   A(t).
18      * * *
19      Section 2.     Section 1202-A(b) of the act is amended to read:
20   Section 1202-A.    Incidence and rate of tax.
21      * * *
22      (b)   Retailer.--A retailer may only purchase tobacco products
23   from a licensed [dealer. If the tax is not collected by the
24   seller from the retailer, the tax is imposed on the retailer at
25   the time of purchase at the same rate as in subsections (a) and
26   (a.1) based on the retailer's purchase price of the tobacco
27   products. The retailer shall remit the tax to the department.]
28   wholesaler.
29      * * *
30      Section 3.     Section 1222-A(a) of the act is amended by adding

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 1   paragraphs and the section is amended by adding a subsection to
 2   read:
 3   Section 1222-A.         Licensing of wholesalers.
 4      (a)   Requirements.--Applicants for a wholesale license or
 5   renewal of that license shall meet the following requirements:
 6            * * *
 7            (8)     The applicant shall have submitted the surety bond
 8      required by subsection (c), accurately represented the size
 9      and cost of its inventory and other information required by
10      the surety bond and timely provided any requested financial
11      statement and additional records.
12            (9)    The information provided by the wholesaler in its
13      application shall not contain false information or material
14      misrepresentations or omissions.
15      * * *
16      (c)   Surety bond.--The applicant shall, at the time of
17   application, file with the department a surety bond payable to
18   the Commonwealth in an amount fixed by the department of at
19   least $25,000. The following shall apply:
20            (1)    The required surety bond:
21                   (i)    Shall be subject to execution under paragraph
22            (4).
23                   (ii)    Shall be conditioned on the wholesaler's
24            compliance with the requirements of this act.
25                   (iii)    Shall be posted by a surety bond company
26            located within this Commonwealth and approved by the
27            department.
28                   (iv)    Must state that the wholesaler will faithfully
29            comply with the provisions of this article during the
30            effective period of the license.

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 1        (2)   The department may require a wholesaler to furnish a
 2    bond in excess of $25,000, as necessary to ensure the
 3    wholesaler's compliance with this act. The following shall
 4    apply:
 5              (i)    For the purpose of determining whether an
 6        existing bond is sufficient, the department may, by
 7        written notice, require a wholesaler to furnish an
 8        inventory by brand and cost, financial statement and
 9        additional records in the form as the department may
10        prescribe to determine whether additional bonding is
11        warranted when compared to the risk of unrecouped costs
12        of destruction of contraband to the Commonwealth.
13              (ii)    Upon failure of a wholesaler to furnish an
14        inventory by brand and cost, financial statement or
15        additional requested records within thirty 30 days of
16        written notice, or upon a determination that the
17        wholesaler misrepresented the information or the volume
18        of its product shipped into or within the United States,
19        the department may deny, suspend or revoke the
20        wholesaler's license.
21        (3)   A surety on a wholesaler's bond shall be liable up
22    to the amount of the bond, and the Commonwealth may execute
23    on the surety bond:
24              (i)    for costs of destruction of the wholesaler's
25        product to the extent it exceeds the amounts recovered
26        from the person from whom the product is confiscated or a
27        surety for the person; and
28              (ii)    to recover civil penalties, costs and fees
29        assessed against the wholesaler.
30        (4)   A surety on a bond furnished by a wholesaler as

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 1      provided in this section shall be released and discharged
 2      from liability to the Commonwealth accruing on the bond after
 3      expiration of sixty 60 days from the date upon which the
 4      surety shall have lodged with the Attorney General a written
 5      request to be released and discharged. The following shall
 6      apply:
 7                  (i)    This paragraph shall not operate to relieve,
 8            release or discharge the surety from liability already
 9            accrued or which shall accrue before the expiration of
10            the 60-day period.
11                  (ii)    The Attorney General shall, upon receiving any
12            such request, notify the wholesaler who furnished the
13            bond. Unless the wholesaler, on or before the expiration
14            of the 60-day period, files with the department a new
15            bond, with corporate surety approved by and acceptable to
16            the department, the department shall revoke the
17            wholesaler's license.
18                  (iii)    If a new bond is furnished by the wholesaler,
19            the department shall cancel and surrender the old bond of
20            the wholesaler as soon as it is satisfied that the new
21            bond provides adequate security for the wholesaler's
22            obligations.
23      Section 4.        Section 1223-A of the act is amended to read:
24   Section 1223-A.        Licensing of retailers.
25      (a)   Requirements.--Applicants for a retail license or
26   renewal of that license shall meet the following requirements:
27            (1)   The premises in which the applicant proposes to
28      conduct business are adequate to protect the revenues.
29            (2)   The applicant shall not have failed to disclose any
30      material information required by the department.

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 1            (3)   The applicant shall not have any material false
 2      statement in the application.
 3            (4)   The applicant shall not have violated any provision
 4      of this article.
 5            (5)   The applicant shall have filed all required State
 6      tax reports and paid any State taxes not subject to a timely
 7      perfected administrative or judicial appeal or subject to a
 8      duly authorized deferred payment plan.
 9            (6)   The applicant shall have submitted the surety bond
10      required by subsection (b), accurately represented the size
11      and cost of the applicant's inventory and timely provided any
12      requested financial statement and additional records.
13      (b)   Surety bond.--The applicant shall at the time of
14   application file with the department a surety bond payable to
15   the Commonwealth in an amount fixed by the department of at
16   least $2,500. The following shall apply:
17            (1)   Every bond must have as surety a surety company
18      approved by the department.
19            (2)   The bond must state that the retailer will
20      faithfully comply with the provisions of this article during
21      the effective period of the license.
22            (3)   The department may require any retailer to furnish
23      additional, acceptable corporate surety bond as necessary to
24      ensure that the costs of destruction of contraband are
25      secured based upon the size and cost of inventory of a
26      retailer as represented by the retailer in its surety bond.
27      The following shall apply:
28                  (i)   For the purpose of determining whether an
29            existing bond is sufficient, the department may, by
30            written notice, require a retailer to furnish an

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 1            inventory by brand and cost, financial statement and
 2            additional records in the form as the department may
 3            prescribe to determine whether additional bonding is
 4            warranted when compared to the risk of unrecouped costs
 5            of destruction of contraband to the Commonwealth.
 6                  (ii)   Upon failure of a retailer to furnish an
 7            inventory by brand, financial statement or additional
 8            requested records within 30 days of written notice, or
 9            upon a determination that the retailer misrepresented the
10            size or cost of its inventory through inspection or
11            otherwise, the department may suspend or revoke the
12            license.
13            (4)   A retailer with multiple stores may post a bond not
14      to exceed $25,000.
15      (c)   Surety discharge.--A surety on a bond furnished by a
16   retailer as provided in this section shall be released and
17   discharged from liability to the Commonwealth accruing on the
18   bond after expiration of 60 days from the date upon which the
19   surety lodged with the department a written request to be
20   released and discharged. The following shall apply:
21            (1)   This subsection shall not operate to relieve,
22      release or discharge the surety from liability already
23      accrued or which shall accrue before the expiration of the
24      60-day period.
25            (2)   The department shall, upon receiving the request,
26      notify the retailer who furnished the bond. Unless the
27      retailer, on or before the expiration of the 60-day period,
28      files with the department a new bond, with corporate surety
29      approved by and acceptable to the department, the department
30      shall cancel the retailer's license.

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 1            (3)   If a new bond is furnished by a retailer, the
 2      department shall cancel and surrender the old bond of the
 3      retailer as soon as it is satisfied that the costs of
 4      destruction are reasonably covered by the new bond.
 5      Section 5.     The act is amended by adding a section to read:
 6   Section 1235-A.    Nicotine Electronic Cigarette Directory.
 7      (a)   Intent.--It is the intent of the General Assembly under
 8   this section to establish effective tools for use by the
 9   department and the Attorney General to prevent and deter the
10   sale of electronic cigarettes that contain nicotine in the
11   Commonwealth which have not been certified under subsection (b).
12   To accomplish this, this section requires annual manufacturer
13   and product certifications and a public directory listing all
14   certified manufacturers and electronic cigarettes that contain
15   nicotine. In addition, this section authorizes the department
16   and the Attorney General, and their agents, to perform regular
17   inspections of businesses who sell or store electronic
18   cigarettes that contain nicotine, inspect the books and records
19   of the persons and impose penalties for noncompliance. This
20   section requires the Attorney General to annually report to the
21   General Assembly on the effectiveness of the enforcement
22   activities taken under this section, to identify all resources
23   used in the enforcement activities and their costs and to set
24   the level consistent with any enforcement activities to the
25   amount budgeted by the General Assembly for    the enforcement
26   activities.
27      (b)   Certification.--
28            (1)   Within 60 days of the effective date of this
29      subsection and annually thereafter, every manufacturer of
30      electronic cigarettes that contain nicotine that are sold for

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 1    retail sale in this Commonwealth, whether directly or through
 2    an importer, wholesaler, distributor, retailer or similar
 3    intermediary or intermediaries, shall execute and deliver to
 4    the Attorney General a certification, under penalty of
 5    perjury on a form and in the manner prescribed by the
 6    Attorney General, that the manufacturer is compliant with
 7    this section, agrees to continue to comply with this section,
 8    has posted the surety bond required by sections 1222-A and
 9    1223-A and that, for each electronic cigarette that contains
10    nicotine:
11              (i)    the manufacturer has received a marketing
12        granted order for the electronic cigarette that contains
13        nicotine from the FDA in accordance with 21 U.S.C. § 387j
14        (relating to application for review of certain tobacco
15        products);
16              (ii)    the manufacturer has submitted a timely filed
17        premarket tobacco product application for the electronic
18        cigarette that contains nicotine to the FDA under 21
19        U.S.C. § 387j and the application either remains under
20        review by the FDA or has received a denial order that has
21        been and remains stayed by the FDA or court order,
22        rescinded by the FDA, or vacated by a court; or
23              (iii)    the manufacturer was not required to submit an
24        additional premarket tobacco product application for the
25        electronic cigarette that contains nicotine because the
26        electronic cigarette that contains nicotine reflects
27        changes to the name, brand style or packaging of an
28        electronic cigarette that contains nicotine that is
29        covered under subparagraph (i) or (ii).
30        (2)     To the extent that 21 U.S.C. § 387j is amended or

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 1      the Federal Government issues subsequent regulations,
 2      official guidance or a formal policy statement changing
 3      compliance requirements or standards for an electronic
 4      cigarette that contains nicotine to become federally
 5      compliant, each manufacturer of an electronic cigarette that
 6      contains nicotine that is sold for retail sale or to a
 7      consumer in this Commonwealth shall submit documentation to
 8      the Attorney General substantiating compliance with the new
 9      Federal requirements or standards within 30 days of the date
10      compliance is mandated. Failure to substantiate compliance
11      with a new Federal mandate shall be grounds for removal of
12      the manufacturer and its electronic cigarettes that contain
13      nicotine from the directory established under this section.
14      (c)   Declaration.--The form prescribed by the Attorney
15   General under subsection (b) must require each manufacturer to:
16            (1)   Specify the name under which the manufacturer
17      transacts or intends to transact business, the address of the
18      location of the manufacturer's principal place of business,
19      the manufacturer's email address and the brand name,
20      category, such as e-liquid, power unit, device, e-liquid
21      cartridge, e-liquid pod or disposable, product name and
22      flavor of each electronic cigarette that contains nicotine
23      that is sold in this Commonwealth.
24            (2)   For electronic cigarettes that contain nicotine
25      manufactured outside of the United States, provide a complete
26      list of its importers into the United States who sell the
27      products into the Commonwealth and the brand families sold by
28      the importers, including the importer's name, address,
29      contact name, phone number and email address at which the
30      importer can be reached, and a declaration signed by each

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 1      importer on a form prescribed by the Attorney General. The
 2      declaration shall state the following:
 3                  (i)    The importer accepts joint and several liability
 4            with the manufacturer for payment of civil penalties,
 5            costs, expenses and attorney fees related to this
 6            section.
 7                  (ii)    The importer consents to personal jurisdiction
 8            in this Commonwealth for the purposes of claims by the
 9            Commonwealth for payment of civil penalties, costs,
10            expenses and attorney fees.
11                  (iii)    The importer has appointed an agent for
12            service of process in this Commonwealth according to the
13            same requirements under this section.
14                  (iv)    The importer holds a valid permit under 26
15            U.S.C. § 5713 (relating to permit).
16                  (v)    The importer agrees to provide any information
17            required under this section.
18      (d)   Content.--Each annual certification form required by
19   subsections (b) and (c) shall be accompanied by:
20            (1)   A copy of:
21                  (i)    the marketing granted order issued by the FDA
22            under 21 U.S.C. § 387j;
23                  (ii)    the acceptance letter issued by the FDA under
24            21 U.S.C. § 387j for a timely filed premarket tobacco
25            product application; or
26                  (iii)    a document issued by the FDA or by a court
27            confirming that the premarket tobacco product application
28            has received a denial order that has been and remains
29            stayed by the FDA or court order, rescinded by the FDA or
30            vacated by a court.

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 1            (2)   A payment of $2,000 for each brand family of
 2      electronic cigarette that contains nicotine, plus $200 for
 3      each brand style of the product, the first time a
 4      manufacturer submits a certification form for that brand
 5      family of electronic cigarette that contains nicotine and a
 6      payment of $1,000 annually thereafter for each brand family
 7      of electronic cigarette that contains nicotine, plus $100 for
 8      each brand style of the product.
 9      (e)   Confidentiality.--Except to the extent that the FDA or
10   the manufacturer has made the information public or a third
11   party disclosed the information and the manufacturer has not
12   taken legal action to prevent further disclosure, the
13   information submitted by the manufacturer under subsection (d)
14   (1) and (h) shall be considered confidential commercial or
15   financial information for purposes of the act of February 14,
16   2008 (P.L.6, No.3), known as the Right-to-Know Law. The
17   manufacturer may redact confidential commercial or financial
18   information provided under subsection (d)(1) and (h). The
19   Attorney General or department shall not disclose the
20   information except as required or authorized by law.
21      (f)   Notification.--A manufacturer required to submit a
22   certification form under subsections (b) and (c) shall notify
23   the Attorney General within 30 days of any material change to
24   the certification form, including the issuance or denial of a
25   marketing order by the FDA under 21 U.S.C. § 387j, or any other
26   order or action by the FDA or any court that affects the ability
27   of the electronic cigarette that contains nicotine to be
28   introduced or delivered into interstate commerce for commercial
29   distribution in the United States.
30      (g)   Directory.--Within 120 days from the effective date of

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 1   this subsection, the Attorney General shall maintain and make
 2   available on the Attorney General's publicly accessible Internet
 3   website a directory that lists all manufacturers of electronic
 4   cigarettes that contain nicotine, brand names, categories, such
 5   as e-liquid, e-liquid cartridge, e-liquid pod or disposable,
 6   product names and flavors for which certification forms have
 7   been submitted and approved by the Attorney General and shall
 8   update the directory at least monthly to ensure accuracy. The
 9   Attorney General shall establish a process to provide licensed
10   retailers, distributors and wholesalers notice of the initial
11   publication of the directory and changes made to the directory
12   in the prior month.
13      (h)   Compliance.--The department and the Attorney General may
14   require a manufacturer to submit additional information as
15   necessary to determine compliance with this section, including,
16   but not limited to, samples of the packaging or labeling of each
17   brand family and style, each stock keeping unit number for each
18   brand style included in the certification for listing on the
19   directory, copies of invoices and other sales records for each
20   brand family of electronic cigarettes that contain nicotine sold
21   in this Commonwealth, and any documents related to the
22   manufacturer's premarket tobacco application, to determine
23   whether a manufacturer is in compliance with this section. The
24   Attorney General may require manufacturers to provide a sworn
25   affidavit as to the authenticity of any documents submitted by
26   the manufacturer in support of its certification or in response
27   to a request by the Attorney General.
28      (i)   Nondisclosure.--A manufacturer or the manufacturer's
29   electronic cigarette that contains nicotine may not be included
30   or retained in the directory if the Attorney General determines

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 1   that any of the following apply:
 2            (1)   The manufacturer failed to provide a complete and
 3      accurate certification as required by subsection (b).
 4            (2)   The manufacturer submitted a certification that does
 5      not comply with the requirements of subsections (b), (c) and
 6      (d)(1).
 7            (3)   The manufacturer failed to include with its
 8      certification the payment required by subsection (d)(2).
 9            (4)   If the manufacturer is located outside of the United
10      States, the manufacturer failed to provide the information
11      and declaration required by subsection (c)(2).
12            (5)   The manufacturer failed to provide the surety bond
13      required by subsection (k) or misrepresented any of the
14      information required by the surety bond.
15            (6)   The information provided by the manufacturer in its
16      certification is determined by the Attorney General to
17      contain false information or material misrepresentations or
18      omissions.
19      (j)   Denial.--The Attorney General may deny a manufacturer's
20   certification if any of the following apply:
21            (1)   The manufacturer sold products in this Commonwealth
22      required to be certified under this section during a period
23      when either the manufacturer or the brand family had not been
24      certified and listed on the directory.
25            (2)   The manufacturer was denied listing or involuntarily
26      removed from another state's electronic cigarette directory
27      and the agency decision is final and no longer subject to
28      appeal, if the other state's directory has requirements
29      similar to those of the directory under this section.
30            (3)   The manufacturer failed to provide any information

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 1    requested under subsection (h).
 2        (4)    The information provided by the manufacturer in its
 3    certification or under subsection (h) is determined to
 4    contain false information or material misrepresentations or
 5    omissions.
 6        (5)    The manufacturer failed to submit complete and
 7    accurate reports as required by the Prevent All Cigarette
 8    Trafficking Act of 2009 (Pub. L. No. 111-154).
 9        (6)    The manufacturer has been convicted of violating 18
10    Pa.C.S. § 6305 (relating to sale of tobacco products).
11        (7)    The manufacturer failed to adhere to the Federal
12    nicotine packaging standard required by 15 U.S.C. § 1472a
13    (relating to special packaging for liquid nicotine
14    containers). For purposes of this paragraph, all electronic
15    cigarettes constitute "liquid nicotine containers" under the
16    Federal nicotine packaging standard.
17    (k) The following shall apply:
18        (1)    Manufacturers seeking to certify to sell electronic
19    cigarettes that contain nicotine shall at the time of
20    certification to the Attorney General submit a surety bond
21    payable to the Commonwealth in an amount fixed by the
22    Attorney General of at least $50,000.
23        (2)    The required surety bond:
24               (i)    Shall be subject to execution under paragraph
25        (4).
26               (ii)    Shall be conditioned on the manufacturer's
27        compliance with the requirements of this section.
28               (iii)    Shall be posted by a surety bond company
29        located within this Commonwealth and approved by the
30        Attorney General.

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 1              (iv)   Must state that the manufacturer will
 2        faithfully comply with the provisions of this article
 3        during the effective period of the certification.
 4        (3)   The Attorney General may require a manufacturer to
 5    furnish a bond in excess of $50,000, as necessary to ensure
 6    the manufacturer's compliance with this section. For the
 7    purpose of determining whether an existing bond is
 8    sufficient, the Attorney General may, by written notice,
 9    require a manufacturer to furnish an inventory by brand and
10    cost, financial statement and additional records in the form
11    as the department may prescribe to determine whether
12    additional bonding is warranted when compared to the risk of
13    unrecouped costs of destruction of contraband to the
14    Commonwealth. Upon failure of a manufacturer to furnish an
15    inventory by brand and cost, financial statement or
16    additional requested records within 30 days of written
17    notice, or upon a determination that the manufacturer
18    misrepresented the information or the volume of its product
19    shipped into or within the United States, the Attorney
20    General may deny listing or remove the manufacturer from the
21    directory.
22        (4)   A surety on a manufacturer's bond shall be liable up
23    to the amount of the bond, and the Commonwealth may execute
24    on the surety bond:
25              (i)    for costs of destruction of the manufacturer's
26        product to the extent it exceeds the amounts recovered
27        from the person from whom such product is confiscated or
28        a surety for the person; and
29              (ii)   to recover civil penalties, costs and fees
30        assessed against the wholesaler under this section.

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 1            (5)   A surety on a bond furnished by a manufacturer as
 2      provided in this section shall be released and discharged
 3      from liability to the Commonwealth accruing on the bond after
 4      expiration of 60 days from the date upon which the surety
 5      shall have lodged with the Attorney General a written request
 6      to be released and discharged. This paragraph shall not
 7      operate to relieve, release or discharge the surety from
 8      liability already accrued or which shall accrue before the
 9      expiration of the 60-day period. The Attorney General shall,
10      upon receiving a request, notify the manufacturer who
11      furnished the bond. Unless the manufacturer, on or before the
12      expiration of the 60-day period, files with the department a
13      new bond, with corporate surety approved by and acceptable to
14      the Attorney General, the Attorney General shall deny or
15      remove the listing of the manufacturer. If a new bond is
16      furnished by a manufacturer, the Attorney General shall
17      cancel and surrender the old bond of the manufacturer as soon
18      as the bond is satisfied the new bond provides adequate
19      security for the manufacturer's obligations.
20      (l)   Removal from directory.--The Attorney General shall
21   provide manufacturers notice and an opportunity to cure
22   deficiencies before denying a certification or removing
23   manufacturers or products from the directory. The following
24   shall apply:
25            (1)   The Attorney General may not remove the manufacturer
26      or its products from the directory until at least 30 business
27      days after the manufacturer has been given notice of an
28      intended action stating the reasons for removal. Notice shall
29      be sufficient and deemed immediately received by a
30      manufacturer if the notice is sent either electronically or

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 1      by facsimile to an email address or facsimile number provided
 2      by the manufacturer in its most recent certification filed
 3      under subsections (a), (b), (c) and (d).
 4            (2)   The manufacturer of electronic cigarettes that
 5      contain nicotine shall have 30 business days from the date of
 6      service of the notice of the Attorney General's intended
 7      action to cure the deficiencies or otherwise establish that
 8      the manufacturer or its products should be included in the
 9      directory.
10      (m)   Returns.--If a product is removed from the directory,
11   each retailer, distributor, wholesaler and importer shall have
12   30 business days from the day such product is removed from the
13   directory to sell the product or remove the product from its
14   inventory and return the product to the manufacturer for
15   disposal. Manufacturers shall accept returns of and provide
16   refunds for such products and shall dispose of such products in
17   compliance with all Federal, State and local environmental laws
18   and regulations. After 30 business days following removal from
19   the directory, the product identified in the notice of removal
20   is contraband, may not be purchased or sold for retail sale in
21   this Commonwealth and is subject to seizure, forfeiture and
22   destruction. The cost of the seizure, forfeiture and destruction
23   shall be borne by the person from whom the product is
24   confiscated, except that no product may be seized from a
25   consumer who has made a bona fide purchase of the    product. The
26   department and the Attorney General may store and dispose of the
27   seized products as appropriate, in accordance with Federal,
28   State and local laws pertaining to storage and disposal of such
29   products.
30      (n)   Prohibition.--Except as provided in paragraphs (1) and

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 1   (2), within 120 days of the effective date of this subsection or
 2   on the date that the Attorney General first makes the directory
 3   available for public inspection on its official website,
 4   whichever is later, electronic cigarettes that contain nicotine
 5   not included in the directory under subsection (g) may not be
 6   sold for retail sale in this Commonwealth either directly or
 7   through an importer, distributor, wholesaler, retailer or
 8   similar intermediary or intermediaries. The following shall
 9   apply:
10            (1)   Each retailer shall have 120 days from the date that
11      the Attorney General first makes the directory available for
12      inspection on its publicly accessible Internet website to
13      sell products that were in its inventory and not included in
14      the directory or to remove those products from its inventory.
15            (2)   Each distributor or wholesaler shall have 120 days
16      from the date that the Attorney General first makes the
17      directory available for inspection on its publicly accessible
18      Internet website to remove the products intended for sale in
19      this Commonwealth from its inventory.
20            (3)   After 120 days following publication of the
21      directory, electronic cigarettes that contain nicotine not
22      listed in the directory and intended for sale in the
23      Commonwealth are contraband and are subject to seizure,
24      forfeiture and destruction, and may not be purchased or sold
25      for retail sale in this Commonwealth. The cost of the
26      seizure, forfeiture and destruction shall be borne by the
27      person from whom the products are confiscated, except that no
28      products may be seized from a consumer who has made a bona
29      fide purchase of such product. The Attorney General may store
30      and dispose of the seized products as appropriate, in

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 1      accordance with Federal, State and local laws pertaining to
 2      storage and disposal of the products.
 3      (o)   Penalties.--The following penalties shall apply to
 4   violations of this section:
 5            (1)   A retailer, distributor, wholesaler or importer who
 6      sells or offers for sale an electronic cigarette that
 7      contains nicotine for retail sale in this Commonwealth that
 8      is not included in the directory shall be subject to:
 9                  (i)    A civil penalty of $500 for each product offered
10            for sale in violation of this section until the offending
11            product is removed from the market or until the offending
12            product is properly listed on the directory.
13                  (ii)    For a second violation within a 12-month
14            period, a civil penalty of at least $750 but not more
15            than $1,000 per day per product, and the license of the
16            licensee shall be suspended for at least 14 days.
17                  (iii)    For a third violation within a 12-month
18            period, a civil penalty of at least $1,000 but not more
19            than $1,500 per day per product, and the license of the
20            licensee shall be revoked.
21            (2)   A manufacturer whose electronic cigarettes that
22      contain nicotine are not listed in the directory and are sold
23      for retail sale in this Commonwealth, whether directly or
24      through an importer, distributor, wholesaler, retailer or
25      similar intermediary or intermediaries, shall be subject to a
26      civil penalty of $1,000 for each product offered for sale in
27      violation of this section until the offending product is
28      removed from the market or until the offending product is
29      properly listed on the directory. Any manufacturer that
30      falsely represents any information required by subsection

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 1    (b), (c) or (g) commits a misdemeanor of the third degree for
 2    each false representation.
 3          (3)   A person, including any manufacturer, importer,
 4    wholesaler, distributor or retailer, who sells or offers to
 5    sell an electronic cigarette that contains nicotine to an
 6    importer or dealer listed in the tobacco noncompliance
 7    database shall be subject to a civil penalty of $500 for each
 8    product sold to or offered to be sold to the    person. A
 9    consumer who has made a bona fide purchase of the    product
10    shall not be subject to the penalties in this section.
11          (4)   A person, including any manufacturer, importer,
12    wholesaler, distributor or retailer, who purchases an
13    electronic cigarette that contains nicotine from a person
14    listed in the tobacco noncompliance database shall be subject
15    to a civil penalty of $500 for each product purchased. A
16    consumer who has made a bona fide purchase of such product
17    shall not be subject to the penalties in this section.
18          (5)   A person, including any manufacturer, importer,
19    wholesaler, distributor or retailer that violates both
20    paragraphs (3) and (4) related to the same product shall be
21    subject to the penalties provided under this section only
22    once and not compounded or consecutively.
23          (6)   A violation of this section shall be deemed to be an
24    unfair or deceptive act or practice in violation of the act
25    of December 17, 1968 (P.L.1224, No.387), known as the Unfair
26    Trade Practices and Consumer Protection Law.
27          (7)   For purposes of this subsection, the term "each
28    product" shall mean each individual electronic cigarette that
29    contains nicotine offered for sale, notwithstanding whether
30    the   electronic cigarette that contains nicotine bears the

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 1      same stock keeping unit number.
 2            (8)   In an action to enforce this section, the
 3      Commonwealth shall be entitled to recover costs, including
 4      the costs of investigation, expert witness fees and
 5      reasonable attorney fees.
 6      (p)   Tobacco Products Administration Cash Fund.--All costs,
 7   including costs of investigation and costs of destruction,
 8   certification fees, expert witness fees, attorney fees, civil
 9   penalties and amounts recovered on surety bonds collected by the
10   department and the Attorney General under this section shall be
11   remitted to the State Treasurer for credit to the Tobacco
12   Products Administration Cash Fund and used for administration
13   and enforcement of this section.
14      (q)   Enforcement.--To enforce the provisions of this section,
15   the department or the Attorney General, or their designees,
16   including any Commonwealth or local enforcement officer, may
17   examine the books, papers, invoices and other records of any
18   person in possession, control or occupancy of any premises in
19   the Commonwealth where electronic cigarettes that contain
20   nicotine are placed, stored, sold or offered for sale, including
21   the stock of electronic cigarettes that contain nicotine on the
22   premises. Each person in the possession, control or occupancy of
23   any premises where electronic cigarettes that contain nicotine
24   are placed, sold or offered for sale shall give the department
25   or the Attorney General, or their designees, including any
26   Commonwealth or local enforcement officer, the means, facilities
27   and opportunity for the examinations authorized by this section.
28   A person that willfully refuses to cooperate with or permit an
29   examination as provided under this section shall be subject to
30   the criminal penalties, fines and costs provided under section

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 1   1214-A.
 2      (r)     Violations.--A person who violates this section shall be
 3   subject to the criminal penalties, fines and costs otherwise
 4   provided by this article. The Commonwealth may seek injunctive
 5   relief or other order to prevent a threatened or actual
 6   violation of, or to ensure compliance by, a person with this
 7   section.
 8      (s)     Compliance.--Each retailer, distributor, wholesaler,
 9   importer and any similar intermediary that sells or distributes
10   electronic cigarettes that contain nicotine in this Commonwealth
11   shall be subject to unannounced compliance checks. The
12   department and the Attorney General shall jointly publish the
13   results of all compliance checks at least annually and shall
14   make the results available to the public on request.
15      (t)     Database.--The department shall maintain and publish on
16   its publicly accessible Internet website a tobacco noncompliance
17   database listing every person, including any manufacturer,
18   importer, wholesaler, distributor or retailer that has three or
19   more violations under this section within the preceding 12
20   months. The person shall remain listed on the tobacco
21   noncompliance database through the end of the 12th full calendar
22   month after the person's most recent violation under this
23   section.
24      (u)     Agent for service of process.--Any nonresident
25   manufacturer of electronic cigarettes that contain nicotine
26   shall, as a condition precedent to being included in the
27   directory created in this section, appoint and continually
28   engage without interruption the services of an agent in the
29   Commonwealth to act as agent for the service of process on whom
30   all process, and any action or proceeding against it concerning

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 1   or arising out of the enforcement of this section, may be served
 2   in any manner authorized by law. Service by certified mail on
 3   the agent shall constitute legal and valid service of process on
 4   the manufacturer. The manufacturer shall provide the name,
 5   address, telephone number, email address and proof of the
 6   appointment and availability of such agent to the department and
 7   Attorney General. The following shall apply:
 8            (1)   The manufacturer shall provide notice to the
 9      department and Attorney General 30 calendar days prior to
10      termination of the authority of an agent and shall further
11      provide proof, as required by the department and Attorney
12      General, of the appointment of a new agent no less than five
13      calendar days prior to the termination of an existing agent
14      appointment. If an agent terminates an agency appointment,
15      the manufacturer shall notify the department and Attorney
16      General of the termination within five calendar days and
17      shall include proof, as required by the department and
18      Attorney General, of the appointment of a new agent.
19            (2)   Any manufacturer whose electronic cigarettes that
20      contain nicotine are sold in this Commonwealth without the
21      appointment of an agent as required by this section shall be
22      deemed to have appointed the Secretary of State as its agent
23      for service of process. The appointment of the Secretary of
24      State under this subsection shall not satisfy the condition
25      precedent required to be included or retained in the
26      directory.
27      (v)   Foreign importers.--In the case of a manufacturer
28   located outside of the United States, each importer into the
29   United States of the manufacturer's brand families that are sold
30   in this Commonwealth shall bear joint and several liability with

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 1   the manufacturer for payment of all civil penalties, fees, costs
 2   and attorney fees due under this section.
 3      (w)     Determination.--A determination by Attorney General to
 4   not include or to remove from the directory a manufacturer or a
 5   product shall be subject to review by the filing of a petition
 6   for review with Commonwealth Court within 21 days of the
 7   determination. No party other than the manufacturer may
 8   challenge a determination by the department or Attorney General.
 9      (x)     Resale.--No retailer shall purchase electronic
10   cigarettes that contain nicotine for resale except from a
11   licensed wholesaler operating with a valid license issued in
12   accordance with section 1222-A.
13      (y)     Regulations.--The department or the Attorney General may
14   promulgate rules necessary to effectuate the purposes of this
15   section.
16      (z)     Report.--Beginning July 1 after the effective date of
17   this subsection and annually thereafter, the Attorney General
18   shall provide a report to the General Assembly regarding the
19   status of the directory, manufacturers and products included in
20   the directory, revenue and expenditures related to
21   administration of this section and enforcement activities
22   undertaken in accordance with this section.
23      (aa)     Publication.--The department and the Attorney General
24   shall share documents and information obtained pursuant to this
25   section with other Federal, State and local agencies as
26   necessary to enforce this section, similar statutes of other
27   states or localities, and other tobacco-related laws and
28   regulations.
29      Section 6.     This act shall take effect in 60 days.



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