Sub. H.B. 500
127th General Assembly
(As Passed by the General Assembly)
Reps. Hughes, Flowers, Yuko, Letson, Stebelton, D. Stewart, Carmichael, Domenick, Bacon, Batchelder, Brown, Chandler, Collier, Combs, Dyer, Evans, Gerberry, Gibbs, Goyal, Harwood, Heard, Hite, Luckie, Lundy, J. McGregor, Raussen, Sayre, Schindel, Schneider, Setzer, Slesnick, Szollosi, B. Williams, Zehringer
Sens. Fedor, R. Miller, Padgett, Turner, Goodman, Sawyer, Cates
Effective date: April 7, 2009; certain provisions effective May 1, 2010
ACT SUMMARY
· Establishes reduced ignition propensity standards for cigarettes.
· Authorizes the State Fire Marshal to monitor and the State Fire Marshal and Attorney General to enforce these standards.
· Establishes penalties for violations.
· Establishes the New African Immigrants Commission to gather and disseminate information regarding problems and programs concerning sub-Saharan African people.
· Requires the Commission to perform specified duties.
· Creates an interagency council to provide and coordinate the exchange of information relative to the needs of sub-Saharan African people and promote the delivery of state services to such people.
TABLE OF CONTENTS
Required testing of cigarettes and required certification of testing
Required testing of cigarettes
Required certification of cigarette testing
Enforcement of act by State Fire Marshal, Tax Commissioner, and Attorney General
Exemptions from the act's provisions
State
preemption of political subdivision authority and federal preemption
of state authority
Immunity from liability in enforcing the act
Civil penalties for remaining violations
Delayed effective dates for civil penalties
New African Immigrants Commission
Duties of the New African Immigrants Commission.
CONTENT AND OPERATION
Except as described below, the act prohibits any person from selling or offering to sell cigarettes in Ohio, or from selling or offering to sell cigarettes to persons located in Ohio, unless all of the following requirements are met:
· The manufacturer of the cigarettes has the cigarettes tested in accordance with the testing method specified in the act or the testing method approved by the State Fire Marshal under the act;
· The cigarettes met the performance standards specified in the act or the performance standard approved by the State Fire Marshal under the act;
· The manufacturer has marked the packaging of the cigarettes as required by the act; and
· The manufacturer files a written certification with the State Fire Marshal as required by the act. (R.C. 3739.02.)
A manufacturer, wholesale dealer, agent, or any other person (other than a retail dealer) who knowingly sells or offers to sell cigarettes in violation of the requirements listed above is liable for a civil penalty not to exceed $100 per pack of cigarettes sold or offered for sale, provided that in no case can the penalty against any such person or entity exceed $100,000 during any 30-day period (R.C. 3739.99(B)). A retail dealer who knowingly sells or offers to sell cigarettes in violation of the requirements listed above is liable for a civil penalty not to exceed $100 per pack of cigarettes sold or offered for sale, provided that in no case can the penalty against any such retail dealer exceed $25,000 for sales or offers to sell during any 30-day period (R.C. 3739.99(C)).
The act defines "manufacturer" to mean either of the following: (1) an entity or the entity's successor that, in any location, manufactures or otherwise produces cigarettes, or causes cigarettes to be manufactured or produced, that the entity intends to be sold in Ohio, including, but not limited to, cigarettes intended to be sold in the United States through an importer or (2) any entity or the entity's successor that meets both of the following criteria: (a) purchases cigarettes, in any location, from a second entity that manufactures or otherwise produces cigarettes in any location when the second entity does not intend that the cigarettes it manufactures be sold in the United States and (b) intends to sell the cigarettes described in (a) in the United States (R.C. 3739.01(D)).
"Wholesale dealer" means either of the following: (1) a person, other than a manufacturer, who sells cigarettes to retail dealers or other persons for purposes of resale or (2) a person who owns, operates, or maintains one or more cigarette vending machines upon premises owned or occupied by any other person (R.C. 3739.01(H)).
"Agent" means any person licensed by a county auditor or the Tax Commissioner to purchase and affix adhesive or meter stamps on packages of cigarettes under the Cigarette Tax Law (R.C. Chapter 5743.). "Cigarettes" has the same meaning as in the Tobacco Product Manufacturer Escrow Accounts Law (R.C. Chapter 1346.). "Sale" and "retail dealer" have the same meanings as in the Cigarette Tax Law. (R.C. 3739.01 (A), (C), (F), and (H).)
A cigarette manufacturer must have a laboratory conduct the required testing of the manufacturer's cigarettes. The laboratory must be accredited pursuant to the International Organization for the Standardization and International Electrotechnical Commission Standard 17025 of the International Organization for Standardization, or another comparable accreditation standard required by the State Fire Marshal. The laboratory must implement a quality control and quality assurance program and must use that program when conducting the required testing. (R.C. 3739.03(A).) "Quality control and assurance program" means the procedures a laboratory implements to ensure both of the following: (1) that operator bias, systematic and nonsystematic methodological errors, and equipment-related problems do not affect cigarette test results and (2) testing repeatability remains within the required repeatability values for all test trials used by the laboratory to certify cigarettes in accordance with the act and is not greater than 0.19 (R.C. 3739.01(G). "Repeatability" means the range of values within which 95% of the results of cigarette test trials from a single laboratory will fall (R.C. 3739.01(E)).
A cigarette manufacturer must have the accredited laboratory test the manufacturer's cigarettes in accordance with all the following requirements:
· The laboratory must test the cigarettes in accordance with the American Society of Testing and Materials Standard E2187-04, which is titled "Standard Test Method for Measuring Ignition Strength of Cigarettes," or any subsequent standard adopted by the State Fire Marshal (see below);
· The laboratory must test the cigarettes on ten layers of filter paper; and
· Not more than 25% of the cigarettes tested in a test trial can exhibit full-length burns. This performance standard must apply only to a complete test trial, which means 40 replicate tests for each type of cigarette tested. (R.C. 3739.03(B) and (C).)
These requirements are not to be construed to require additional cigarette testing if a manufacturer tests cigarettes in accordance with these requirements for any other purposes other than the purposes specified in the requirements (R.C. 3739.03(D)).
The act authorizes the State Fire Marshal to adopt any American Society of Testing and Materials standard used to measure the ignition strength of cigarettes that takes effect after the effective date of the act if the State Fire Marshal determines that the subsequent standard does not result in a change in the percentage of full-length burns the same cigarette would exhibit when tested using the American Society of Testing and Materials Standard E2187-04 and the performance standard described above. (R.C. 3739.03(E).)
If a manufacturer manufactures a cigarette the State Fire Marshal determines cannot be tested in the manner described above, the State Fire Marshal must require the manufacturer to propose and submit a test method and performance standard for the cigarette to the State Fire Marshal for approval. If the State Fire Marshal determines that the test method and performance standard proposed by the manufacturer are equivalent to the test method and performance standard described above, the State Fire Marshal must approve the proposed test method and performance standard, and the manufacturer may use that test method and performance standard to certify the cigarettes as required by the act (see below). (R.C. 3793.04(A).)
If the State Fire Marshal determines that another state has enacted reduced cigarette ignition propensity standards that include a test method and performance standard that are the same as those specified in the act and that the officials responsible for implementing those standards have determined that the alternative test method and performance standard for a particular cigarette proposed by the manufacturer satisfies the standards under that other state's law or regulation under a statute or regulation that is comparable to the act, the State Fire Marshal must authorize the manufacturer to use that alternative test method and performance standard to certify the manufacturer's cigarettes for sale in Ohio. The State Fire Marshal is not required to approve such an alternative test method and performance standard if the State Fire Marshal demonstrates a reasonable basis for why that alternative test method and performance standard should not be approved. All other applicable requirements of the act apply to a manufacturer that is authorized to use such an alternative test method and performance standard. (R.C. 3739.04(B).)
The act requires that each manufacturer maintain copies of the reports of all tests conducted on all cigarettes offered for sale in Ohio for a period of three years after a test is concluded and make copies of the reports available to the State Fire Marshal and to the Attorney General upon receipt of a written request from either of these officials (R.C. 3739.05(A)). The act prohibits a manufacturer from failing to make these copies available within 60 days after receiving such a request (R.C. 3739.05(B)). A manufacturer that violates this prohibition is subject to a civil penalty not to exceed $10,000 for each day after the 60th day that the manufacturer fails to comply (R.C. 3739.99(A)).
The act requires each manufacturer to submit to the State Fire Marshal a written certification that each type of cigarette listed in the certification has been tested in accordance with the act's requirements and meets the performance standard set forth in the act or approved by the State Fire Marshal (R.C. 3739.07(A)). A manufacturer must include in the certification all of the following information for each type of cigarette listed in the certification:
· The brand or trade name on the cigarette package;
· The style of cigarette;
· The length and circumference of the cigarette in millimeters;
· The flavor of the cigarette, if applicable;
· Whether the cigarette is filter or nonfilter;
· A description of the package;
· The marking the manufacturer uses that the State Fire Marshal has approved in accordance with the act (see below);
· The name, address, and telephone number of the laboratory, if different than the manufacturer, that conducted the cigarette test;
· The date the cigarette test occurred. (R.C. 3739.07(B).)
A manufacturer must make the certification available to the Attorney General and to the Tax Commissioner to ensure compliance with the act (R.C. 3739.07(C)). The act prohibits a manufacturer from submitting a false certification to the State Fire Marshal (R.C. 3739.07(D)). A manufacturer that is a corporation, partnership, sole proprietorship, limited partnership, or association who knowingly violates this prohibition is liable for a civil penalty of at least $75,000, not to exceed $250,000 for each such violation, in addition to any other penalty prescribed by law (R.C. 3739.99(D)).
The act requires a manufacturer to place a marking on each package of cigarettes that is certified. The marking must be in eight-point type or larger, permanently printed, stamped, engraved, or embossed upon the cigarette package or cellophane wrap at or near the UPC code on the package, and consist of only the letters "FSC" that signifies "fire standards compliant." (R.C. 3739.06(A).)
The act requires a manufacturer to include the approved mark on each package of cigarettes that is certified to indicate compliance with the requirements of the act and requires a manufacturer to use such marking for all of the cigarettes the manufacturer sells. The manufacturer also must apply the marking uniformly to all packages, including, but not limited to, packs, cartons, cases, and brands sold by that manufacturer.
Each cigarette a manufacturer lists in a certification submitted to the State Fire Marshal for which the manufacturer uses lower permeability bands in the cigarette paper to comply with the testing requirements specified in the act must have either of the following bands surrounding the tobacco column:
· For cigarettes on which bands are not positioned by design, at least two nominally identical bands, one of which must be located at least 15 millimeters from the lighting end of the cigarette.
· For cigarettes on which bands are positioned by design, at least two bands, one of which is located at least 15 millimeters from the lighting end of the cigarette and the other of which is located in either of the following places: (1) for filtered cigarettes, ten millimeters from the filter end of the tobacco column or (2) for nonfiltered cigarettes, ten millimeters from the labeled end of the tobacco column. (R.C. 3739.08.)
The act requires a manufacturer to recertify every three years each cigarette the manufacturer certifies under the act. A manufacturer that certifies a cigarette in accordance with the act and subsequently makes any change to the cigarette that alters the cigarette in such a way that the manufacturer knows that the cigarette is likely to no longer meet the standard specified in the act or the standard approved by the State Fire Marshal may not sell or offer to sell that cigarette in Ohio until the manufacturer retests the cigarette in accordance with those testing standards. The manufacturer must maintain records of the retesting in the same manner as the manufacturer maintains records of the previous tests. The act prohibits a manufacturer from selling in Ohio any altered cigarette that fails to meet the appropriate performance standard. (R.C. 3739.09.)
A manufacturer that certifies its cigarettes in accordance with the act must provide a copy of the certifications to each wholesale dealer and agent to which the manufacturer sells cigarettes and must provide sufficient copies of an illustration of the package marking used by the manufacturer for each retail dealer to which the wholesale dealer or agent sells cigarettes.
Each wholesale dealer and agent who receives these copies must provide to each retail dealer to which the wholesale dealer or agent sells the manufacturer's cigarettes a copy of the illustration provided to the wholesale dealer or agent by the manufacturer. A wholesale dealer, agent, or retail dealer must allow the State Fire Marshal, the Tax Commissioner, and the Attorney General to inspect the markings of cigarette packaging. (R.C. 3739.10.)
The act authorizes the State Fire Marshal to conduct testing on cigarettes certified by a manufacturer under the act to determine whether the manufacturer complied with the act's requirements. The State Fire Marshal must conduct the testing in the manner the act requires as described above.
Whenever the State Fire Marshal or the State Fire Marshal's designee discovers any cigarettes that do not include a mark required by the act, or for which no certification has been filed as required by the act, the State Fire Marshal or designee may seize and take possession of the cigarettes, must give the seized cigarettes to the Tax Commissioner, and the cigarettes are thereupon forfeited to the state. The Tax Commissioner must order the destruction of any forfeited cigarettes, but before their destruction, the true holder of the trademark rights in the cigarette brand must be permitted to inspect the cigarettes.
In addition to any other remedy provided by law, if the State Fire Marshal or Attorney General determines that reasonable evidence exists that a violation of the act has occurred, the State Fire Marshal or Attorney General may file an action in the common pleas court of the county where the alleged violation occurred. The action may include a petition for preliminary or permanent injunctive relief against any manufacturer, importer, wholesale dealer, retail dealer, agent, or any other person or entity to enjoin such entity from selling, offering to sell, or affixing tax stamps to any cigarette that does not comply with the requirements of the act, or a claim to recover any costs or damages suffered by the state because such a violation occurred, including enforcement costs in relation to the specific violation and attorney's fees. Each violation of the act or the rules adopted under it constitutes a separate civil violation for which the State Fire Marshal or Attorney General may obtain relief. The act requires that, upon obtaining judgment for injunctive relief, the State Fire Marshal must provide a copy of the judgment to all wholesale dealers and agents to which the cigarette has been sold.
To enforce the act, the State Fire Marshal may examine the books, papers, invoices, and other business records of any person in possession or control of, or occupying any premises where cigarettes are placed, stored, sold, or offered for sale, including the stock of cigarettes on the premises, if the State Fire Marshal reasonably suspects that a violation of the act has occurred. Every person in possession or control of, or occupying any premises where cigarettes are placed, sold, or offered for sale, must give to the State Fire Marshal the means, facilities, and opportunity for these examinations
The Tax Commissioner, in the regular course of conducting inspections of wholesale dealers, agents, and retail dealers, as authorized under the Cigarette Tax Law, may inspect any cigarette packaging to determine if the package is marked as required by the act. If a package of cigarettes is not marked, the Tax Commissioner must notify the State Fire Marshal of the fact. (R.C. 3739.11.) The act authorizes an agent of the Department of Taxation to share information with the Fire Marshal that the agent finds during the course of an investigation (R.C. 5703.21(B)(4)).
If the Tax Commissioner takes possession of cigarettes seized in accordance with the act, such cigarettes are forfeited to the state, and the act requires the Commissioner to destroy such cigarettes, except prior to the destruction of any such cigarettes, the Commissioner must permit the true holder of the trademark rights in the cigarette brand to inspect the cigarettes (R.C. 5743.08).
The act is not to be construed to prohibit any person or entity from manufacturing or selling cigarettes that do not meet the act's requirements if the cigarettes' packaging is or will be stamped for sale in another state, or is packaged for sale outside the United States, and that person or entity has taken reasonable steps to ensure that those cigarettes will not be sold or offered for sale to persons located in Ohio (R.C. 3739.12(A)).
The act does not prohibit a wholesale or retail dealer of cigarettes from selling the dealer's inventory of cigarettes in existence on the act's effective date if the dealer establishes both of the following:
· That state tax stamps were affixed to the cigarettes before that effective date; and
· That the inventory that was purchased before that effective date is comparable in quantity to the inventory purchased during the same period of the prior year. (R.C. 3739.12(B).)
Nothing in the act may be construed to prohibit the sale of cigarettes solely for the purpose of consumer testing, which the act defines to mean an assessment of cigarettes that is conducted by a manufacturer, or under the control and direction of a manufacturer, for the purpose of evaluating consumer acceptance of the cigarettes, utilizing only the quantity of cigarettes that is reasonably necessary for the assessment (R.C. 3739.12(C)).
The implementation and substance of the New York fire safety standards for cigarettes is to be persuasive authority in implementing the act. The State Fire Marshal and Attorney General may adopt rules under the Administrative Procedure Act as are necessary to administer the act. The Tax Commissioner may adopt rules under the Department of Taxation Law (R.C. Chapter 5703.) as necessary to enforce the act. (R.C. 3739.13.)
The act requires the State Fire Marshal periodically to evaluate the act's effectiveness. The State Fire Marshal must submit a report that consists of the State Fire Marshal's findings to the General Assembly on the first day of the 49th month after the effective date of the act, and every three years after that date. (R.C. 3739.14.)
A political subdivision may not enact or enforce any ordinance or other local law or regulation that conflicts with or preempts the act or any state policy expressed in the act (R.C. 3793.15). No person is required to comply with the act or rules adopted under it if a federal reduced cigarette ignition propensity standard that preempts the act or those rules is adopted and becomes effective (R.C. 3739.16).
In addition to any other immunities, defenses, and exclusions provided under the Revised Code, the state, the Department of Commerce or Taxation, and the Division of State Fire Marshal, and any employees of the state, either Department, or the Division, are immune from liability in any civil action or proceeding arising from the performance or nonperformance of any duties specified in the act. In no event are these agencies or employees liable to any person for any claims for injury or damages including, without limitation, claims for indirect, consequential, incidental, special, or punitive damages or claims for lost profits, arising from the performance or nonperformance of the duties specified in the act. (R.C. 3739.17.)
The act requires a manufacturer to pay the State Fire Marshal a $1,000 fee, or an adjusted fee, for each type of brand family included in a certification required by the act. The fee for each type of brand family includes any new cigarette certified under the act within that brand family during the three-year certification period specified by the act. The State Fire Marshal may adjust this fee annually to ensure the fee is sufficient to defray the actual costs of processing, testing, enforcing, and overseeing the activities required under the act. The adjusted fee may not exceed $2,500 for each type of brand family. (R.C. 3739.18(A) and (B).)
"Brand family" means all styles of cigarettes sold under the same trademark and differentiated from one another by means of additional modifiers or descriptors including, but not limited to, "menthol," "lights," "kings," and "100s." "Brand family" includes cigarettes sold under a brand name, whether that name is used alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or other indicia of product identification identical or similar to, or identifiable with, a previous brand of cigarettes (R.C. 3739.01(B)).
The act creates in the state treasury the Reduced Cigarette Ignition Propensity and Firefighter Protection Act Enforcement Fund. The Fund consists of all certification fees submitted by manufacturers and any other moneys made available to the State Fire Marshal specifically to support certification processing, testing, enforcing, and overseeing activities conducted under the act. The State Fire Marshal must use the fund only for these activities. (R.C. 3739.18(C).)
The act also creates in the state treasury the Fire Prevention and Public Safety Fund. Moneys collected from the civil penalties collected under the act, except for civil penalties assessed against manufacturers for failing to make copies of test reports available to the State Fire Marshal and Attorney General, must be deposited in the Fund. The State Fire Marshal must use the Fund to support fire safety and prevention programs. If the Department of Taxation has expenses for the storage or destruction of cigarettes, the State Fire Marshal also may use the Fund to compensate the Department of Taxation for those expenses. (R.C. 3739.18(D).)
The civil penalty for all violations of the act, except for the civil penalties for those specific violations already discussed in this analysis, is not to exceed $1,000 on a first offense and not to exceed $5,000 on each subsequent offense (R.C. 3739.99(E)).
The act's provisions that establish violations and assess civil penalties will not take effect until the first day of the 13th month after the act's effective date (Section 2).
The act creates the New African Immigrants Commission. The Commission consists of eleven members appointed by the Governor with the advice and consent of the Senate. The Speaker of the House of Representatives must recommend to the Governor two persons for appointment to the Commission, the President of the Senate must recommend to the Governor two such persons, and the minority leaders of the House and Senate each must recommend to the Governor one such person. The Governor must make initial appointments to the Commission.
Of the initial appointments made to the Commission, three will be for a term ending October 7, 2009, four will be for a term ending October 7, 2010, and four will be for a term ending October 7, 2011. Thereafter, terms of office will be for three years, each term ending on the same day of the same month of the year as did the term that it succeeds. Each member must hold office from the date of appointment until the end of the term for which the member was appointed. Vacancies must be filled in the same manner as the original appointment. Any member appointed to fill a vacancy occurring prior to the expiration of the term for which the member's predecessor was appointed must hold office for the remainder of such term. Any member must continue in office subsequent to the expiration date of the member's term until the member's successor takes office, or until a period of 60 days has elapsed, whichever occurs first. At the first organizational meeting of the Commission, the original 11 members must draw lots to determine the length of the term each member must serve.
All members of the Commission must be of sub-Saharan African origin, and must be American citizens or lawful, permanent, resident aliens. Members must be from urban, suburban, and rural geographical areas representative of sub-Saharan African people with a numerical and geographical balance of the sub-Saharan African population throughout the state.
The Commission must elect a chairperson, vice-chairperson, and other officers from among its members as it considers advisable. Six members constitute a quorum. The Commission must adopt rules governing its procedures. No action of the Commission is valid without the concurrence of six members.
Members must not be compensated for work as members of the Commission. (R.C. 4112.32.)
The New African Immigrants Commission must do all of the following:
· Gather and disseminate information and conduct hearings, conferences, investigations, and special studies on problems and programs concerning sub-Saharan African people;
· Secure appropriate recognition of the accomplishments and contributions of sub-Saharan African people to this state;
· Stimulate public awareness of the problems of sub-Saharan African people by conducting a program of public education;
· Develop, coordinate, and assist other public and private organizations that serve sub-Saharan African people, including the conducting of training programs for community leadership and service project staff;
· Advise the Governor, General Assembly, and state departments and agencies of the nature, magnitude, and priorities of the problems of sub-Saharan African people;
· Advise the Governor, General Assembly, and state departments and agencies on, and assist in the development and implementation of, comprehensive and coordinated policies, programs, and procedures focusing on the special problems and needs of sub-Saharan African people, especially in the fields of education, employment, energy, health, housing, welfare, and recreation;
· Propose new programs concerning sub-Saharan African people to public and private agencies and evaluate for such agencies existing programs or prospective legislation concerning sub-Saharan African people;
· Review and approve grants to be made from federal, state, or private funds that are administered or subcontracted by the Commission;
· Prepare, review, and approve an annual report;
· Serve as a clearinghouse to review and comment on all proposals to meet the needs of sub-Saharan African people that are submitted to it by public and private agencies;
· Apply for and accept grants and gifts from governmental and private sources to be administered by the Commission or subcontracted to local agencies;
· Monitor and evaluate all programs subcontracted to local agencies by the Commission;
· Endeavor to assure that sub-Saharan African people have access to decision-making bodies in all state and local governmental departments and agencies;
· Establish advisory committees on special subjects as needed to facilitate and maximize community participation in the operation of the Commission;
· Establish with state and local governments and private business and industry relationships that promote and assure equal opportunity for sub-Saharan African people in government, education, and employment;
· Create an interagency council consisting of the following persons or their authorized representatives:
o One member of the Senate appointed by the President of the Senate;
o One member of the House of Representatives appointed by the Speaker of the House of Representatives;
o The Directors of Administrative Services, Agriculture, Education, Development, Health, Highway Safety, Job and Family Services, Liquor Control, Mental Health, Mental Retardation and Developmental Disabilities, Natural Resources, Rehabilitation and Correction, Youth Services, Transportation, Environmental Protection, and Budget and Management;
o The Chairperson of the Ohio Civil Rights Commission;
o The Administrators of Workers' Compensation and the Rehabilitation Services Commission;
o An additional member of the Governor's Cabinet appointed by the Governor.
The New African Immigrants Commission, by rule, may designate other state officers or their representatives to be members of the council. The director of the Commission must be the chairperson of the council. The interagency council must provide and coordinate the exchange of information relative to the needs of sub-Saharan African people and promote the delivery of state services to such people. The council must meet at the call of the chairperson.
Advisory committees must be composed of persons representing community organizations and charitable institutions, public officials, and such other persons as the Commission determines. (R.C. 4112.31.)
HISTORY
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ACTION |
DATE |
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Introduced |
03-11-08 |
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Reported, H. State Gov't & Elections |
05-12-08 |
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Passed House (93-1) |
05-20-08 |
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Reported, S. Insurance, Commerce & Labor |
12-16-08 |
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Passed Senate (31-1) |
12-17-08 |
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House concurred in Senate amendments (87-7) |
12-17-08 |
08-hb500-127.doc/kl