SB-0264, As Passed Senate, May 14, 2009

SUBSTITUTE FOR

SENATE BILL NO. 264

A bill to prohibit the sale of certain uncertified cigarettes;

to provide standards for testing and fire safety certification of

cigarettes; to provide remedies and civil sanctions; to provide for

the powers and duties of certain state governmental officers and

entities; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. This act shall be known and may be cited as the "fire

safety standard and firefighter protection act".

Sec. 3. As used in this act:

(a) "Agent" means a stamping agent, as defined in section 2 of

the tobacco products tax act, MCL 205.422.

(b) "ASTM" means ASTM international, formerly the American

society for testing and materials.

tobacco products tax act, MCL 205.422.

(d) "Department" means the department of energy, labor, and

economic growth.

(e) "Director" means the director of the department.

(f) "Manufacturer" means any of the following:

(i) A manufacturer as defined in section 2 of the tobacco

products tax act, MCL 205.422.

(ii) The first purchaser of gray market cigarettes, as that

term is defined in section 2 of the tobacco products tax act, MCL

205.422, if that purchaser intends to resell the cigarettes in the

United States.

(iii) A successor to a person described in subparagraph (i) or

(ii).

(g) "New York fire safety standards for cigarettes" means the

New York executive law, section 156-c, and the New York fire safety

standards for cigarettes, New York compilation of codes, rules, and

regulations, title 19, sections 429.1 to 429.10.

(h) "Quality control and quality assurance program" means

laboratory procedures implemented to ensure that operator bias,

systematic and nonsystematic methodological errors, and equipment-

related problems do not affect the results of the testing of

cigarettes and ensure that testing repeatability remains within the

required repeatability values stated in section 5(2)(g) for all

test trials used to certify cigarettes under this act.

(i) "Repeatability" means the range of values within which the

repeat results of cigarette test trials from a single laboratory

will fall 95% of the time.

(j) "Retail dealer" means a retailer, as that term is defined

in section 2 of the tobacco products tax act, MCL 205.422.

(k) "Sale" means that term as defined in section 2 of the

tobacco products tax act, MCL 205.422.

(l) "Secondary wholesaler" means that term as defined in

section 2 of the tobacco products tax act, MCL 205.422.

(m) "Sell" means to sell or to offer or agree to sell.

(n) "Tobacco products tax act" means the tobacco products tax

act, 1993 PA 327, MCL 205.421 to 205.436.

(o) "Unclassified acquirer" means that term as defined in

section 2 of the tobacco products tax act, MCL 205.422.

(p) "Wholesale dealer" means a wholesaler, as that term is

defined in section 2 of the tobacco products tax act, MCL 205.422.

Sec. 5. (1) Except as provided in subsection (12), a person

shall not sell cigarettes in this state or sell cigarettes to a

person located in this state unless the cigarettes are tested in

accordance with the test method described in subsection (2), the

cigarettes meet the performance standard described in subsection

(3), the manufacturer has filed a written certification with the

department under section 7, and the cigarettes are marked in

compliance with section 11.

(2) All of the following apply to the testing of cigarettes

for the purposes of this section:

(a) Except as provided in subsection (7), testing of

cigarettes is conducted in accordance with ASTM standard E2187-04,

"Standard Test Method for Measuring the Ignition Strength of

Cigarettes".

(b) Testing is conducted on 10 layers of filter paper.

each cigarette tested.

(d) The performance standard described in subsection (3) is

only applied to a complete test trial.

(e) Testing is conducted by a laboratory that is accredited

pursuant to standard ISO/IEC 17025:2005 of the international

organization for standardization or other comparable accreditation

standard required by the department.

(f) A laboratory conducting testing has implemented a quality

control and quality assurance program that includes a procedure

that will determine the repeatability of the testing results.

(g) The repeatability value of the testing results is 0.19 or

less.

(3) When a cigarette is tested under subsection (2), no more

than 25% of the cigarettes tested in a test trial shall exhibit

full-length burns.

(4) This section does not require additional testing if

cigarettes are tested consistently with this act for any other

purpose.

(5) Any testing performed or sponsored by the department to

determine a cigarette's compliance with the performance standard

described in subsection (3) must comply with this section.

(6) A cigarette listed in a certification submitted under

section 7 that uses lowered permeability bands in the cigarette

paper to achieve compliance with the performance standard described

in subsection (3) must have at least 2 nominally identical bands on

the paper surrounding the tobacco column, with at least 1 complete

band located at least 15 millimeters from the lighting end of the

cigarette. For cigarettes on which the bands are positioned by

design, the cigarette must have at least 2 bands fully located at

least 15 millimeters from the lighting end and 10 millimeters from

the filter end of the tobacco column or, for nonfiltered

cigarettes, 10 millimeters from the labeled end of the tobacco

column.

(7) A manufacturer of a cigarette that the department

determines cannot be tested in compliance with subsection (2)(a)

shall propose a test method and performance standard for the

cigarette to the department. If the department approves of the

proposed test method and determines that the performance standard

proposed by the manufacturer is equivalent to the performance

standard prescribed in subsection (3), the manufacturer may employ

that test method and performance standard to certify the cigarette

under section 7. If the department 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 contained in this act and the department finds that the

officials responsible for implementing those requirements have

approved the proposed alternative test method and performance

standard for a particular cigarette proposed by a manufacturer as

meeting the fire safety standards of that state's law or regulation

under a legal provision comparable to this section, the department

shall authorize that manufacturer to employ the alternative test

method and performance standard to certify that cigarette for sale

in this state, unless the department demonstrates a reasonable

basis why the alternative test should not be accepted. All other

applicable requirements of this section apply to the manufacturer.

(8) A manufacturer shall maintain copies of the reports of all

tests conducted under this act on all cigarettes offered for sale

in this state for a period of 3 years and make copies of these

reports available to the department or the attorney general upon

written request. Any manufacturer who fails to make copies of these

reports available within 60 days of receiving a written request

from the department or the attorney general is subject to a civil

fine of not more than $10,000.00 for each day after the sixtieth

day that the manufacturer does not make the copies available to the

department or the attorney general.

(9) The department may adopt a subsequent ASTM standard test

method for measuring the ignition strength of cigarettes if it

finds that the subsequent method does not result in a change in the

percentage of full-length burns exhibited by any tested cigarette

when compared to the percentage of full-length burns the same

cigarette would exhibit when tested in accordance with the ASTM

standard described in subsection (2)(a) and the performance

standard described in subsection (3).

(10) The department shall implement this section in accordance

with the implementation and substance of the New York fire safety

standards for cigarettes.

(11) The department shall review the effectiveness of this

section and report every 3 years to the legislature the

department's findings and, if appropriate, recommendations for

legislation to improve the effectiveness of this act. The

department shall submit the report and legislative recommendations

no later than the first June 30 following the conclusion of each 3-

year period.

(12) This section does not prohibit any of the following:

(a) A wholesale or retail dealer from selling its existing

inventory of cigarettes if the wholesale or retail dealer can

establish that state tax stamps were affixed to the cigarettes

before the effective date of this act and the wholesale or retail

dealer can establish that the inventory was purchased before the

effective date of this act in comparable quantity to the inventory

purchased during the same period of the preceding year.

(b) The sale of cigarettes solely for the purpose of consumer

testing. For purposes of this subdivision, "consumer testing" means

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 those cigarettes, utilizing

only the quantity of cigarettes that is reasonably necessary for

that assessment.

Sec. 7. (1) A manufacturer shall certify cigarettes for the

purposes of this act by submitting a written certification to the

department attesting that each cigarette listed in the

certification has been tested in compliance with section 5 and that

each cigarette listed in the certification meets the performance

standard described in section 5(3).

(2) A manufacturer shall include in the certification

described in subsection (1) all of the following information for

each cigarette listed in the certification:

(a) Its brand or the trade name on the package.

(b) Its style, such as light or ultra light.

(d) Its circumference in millimeters.

(e) Its flavor, such as menthol or chocolate, if applicable.

(f) Whether it is a filter or nonfilter cigarette.

(g) A package description, such as soft pack or box.

(h) The package markings under section 11.

(i) If it is a person other than the manufacturer, the name,

address, and telephone number of the laboratory that conducted the

test of the cigarette.

(j) The date that the testing of the cigarette occurred.

(3) The department shall make the certifications submitted to

it under subsection (1) available to the attorney general and the

department of treasury for the purpose of ensuring compliance with

this act or any other purpose consistent with this act.

(4) A manufacturer must recertify any cigarette certified

under this section every 3 years.

(5) If a manufacturer makes a change to a cigarette certified

pursuant to this section that is likely to alter its compliance

with the reduced cigarette ignition propensity standards required

by this act, a person shall not sell that cigarette in this state

until the manufacturer retests the cigarette under section 5 and

maintains records of that retesting as required under section 5(8).

A person shall not sell in this state an altered cigarette that

does not meet the performance standard described in section 5(3).

Sec. 9. (1) At the time it submits a written certification or

recertification under section 7, a manufacturer shall pay to the

department a fee of $1,250.00 for each brand family of cigarette

listed in the certification. A fee paid for a brand family under

this subsection applies to all cigarettes within the brand family

listed in the certification and to any new cigarette in that brand

family certified during the 3-year certification period for which

the fee is paid.

(2) The fire safety standard and firefighter protection act

enforcement fund is created within the state treasury. The

department shall deposit fees paid under this section into the

fund. The state treasurer may receive money or other assets from

any other source for deposit into the fund. The state treasurer

shall direct the investment of the fund. The state treasurer shall

credit to the fund interest and earnings from fund investments.

Money in the fund at the close of the fiscal year shall remain in

the fund and shall not lapse to the general fund. The department

shall be the administrator of the fund for auditing purposes. The

department shall expend money from the fund, upon appropriation,

only for processing, testing, enforcement, and oversight activities

under this act.

Sec. 11. (1) A manufacturer shall mark any cigarettes

certified by the manufacturer under section 7 to indicate

compliance with the requirements of section 5. The marking shall be

in 8-point type or larger and consist of 1 of the following:

(a) Modification of the product UPC to include a visible mark

printed at or around the area of the UPC. The mark may consist of

alphanumeric or symbolic characters permanently stamped, engraved,

embossed, debossed, or printed in conjunction with the UPC.

(b) A visible combination of alphanumeric or symbolic

characters permanently stamped, engraved, or embossed upon the

cigarette package or cellophane wrap.

indicates that the cigarettes meet the standards of this act.

(2) A manufacturer shall use the same marking on all brands

marketed by that manufacturer and apply that marking uniformly on

all packs, cartons, cases, and other packages of its cigarettes.

(3) A manufacturer shall notify the department which marking

the manufacturer has selected under subsection (1) for its

cigarettes.

(4) Before certification of any cigarette under section 7, a

manufacturer must submit a request to the department for approval

of its proposed marking. Subject to subsection (5), when it

receives a request under this subsection, the department shall

approve or disapprove the marking submitted. A proposed marking is

considered approved by the department if the department fails to

approve or disapprove of the proposed marking within 10 business

days after receiving a request for approval of that proposed

marking under this subsection.

(5) The department shall approve of any marking submitted to

it under subsection (4) if the marking meets either of the

following:

(a) The marking includes the acronym "FSC", signifying that

the cigarettes are fire standards compliant under the New York fire

safety standards for cigarettes.

(b) The marking is in use and approved for sale in New York

pursuant to the New York fire safety standards for cigarettes.

(6) A manufacturer shall not modify a marking approved by the

department under subsection (4) unless the manufacturer submits a

request to the department for approval of the modification. When it

receives a request under this subsection, the department shall

approve or disapprove the modification to the marking submitted. A

modification to a marking is considered approved by the department

if the department fails to approve or disapprove the modification

within 10 business days after receiving a request for approval of

that modification under this subsection.

(7) A manufacturer certifying cigarettes under section 7 shall

provide a copy of the certification to each wholesale dealer,

unclassified acquirer, and agent to which the manufacturer sells

cigarettes and shall provide sufficient copies of an illustration

of the package marking utilized by the manufacturer under this

section for each secondary wholesaler and retail dealer to which

the wholesale dealer, unclassified acquirer, or agent sells

cigarettes. A wholesale dealer or agent shall provide a copy of

package markings received from a manufacturer under this subsection

to each secondary wholesaler and retail dealer to which it sells

cigarettes. A wholesale dealer, unclassified acquirer, agent,

secondary wholesaler, or retail dealer shall permit the department,

the department of treasury, the attorney general, and their

employees to inspect markings of cigarette packaging marked under

this section.

Sec. 13. (1) A manufacturer, wholesale dealer, agent, or any

other person other than a retail dealer that knowingly sells or

offers to sell cigarettes, other than through retail sale, in

violation of section 5 of this act is subject to a civil fine of

not more than $100.00 for each pack of those cigarettes sold or

offered for sale. However, the aggregate liability of a person for

civil fines under this subsection for multiple violations that

arise during any 30-day period shall not exceed $100,000.00.

(2) A retail dealer that knowingly sells or offers to sell

cigarettes in violation of section 5 of this act is subject to a

civil fine of not more than $100.00 for each pack of those

cigarettes sold or offered for sale. However, the aggregate

liability of a retail dealer for civil fines under this subsection

for multiple violations that arise during any 30-day period shall

not exceed $25,000.00.

(3) In addition to any penalty prescribed by law, a person

engaged in the manufacture of cigarettes that knowingly makes a

false certification under section 7 is subject to a civil fine of

not less than $75,000.00 and not more than $100,000.00.

(4) Except as provided in subsection (1), (2), or (3), a

person that violates this act is subject to a civil fine of not

more than $1,000.00 for the first violation and a civil fine of not

more than $5,000.00 for each subsequent violation.

(5) In addition to any other remedy provided by law, the

department or attorney general may commence an action against a

person who violates this act or rules promulgated under this act.

The court in an action brought under this subsection may order 1 or

more of the following forms of relief for each violation:

(a) Injunctive or other equitable relief, as appropriate.

(b) Enforcement costs relating to the violation or any other

actual damages sustained by this state that are caused by the

violation.

(6) The cigarette fire safety standard and firefighter

protection act fund is created within the state treasury. All civil

fines recovered under this section shall be deposited in the fund.

The state treasurer may receive money or other assets from any

other source for deposit into the fund. The state treasurer shall

direct the investment of the fund. The state treasurer shall credit

to the fund interest and earnings from fund investments. Money in

the fund at the close of the fiscal year shall remain in the fund

and shall not lapse to the general fund. The department shall be

the administrator of the fund for auditing purposes. The department

shall expend money from the fund, upon appropriation, only for fire

safety and prevention programs.

Sec. 15. The department may promulgate rules under the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328, necessary to implement and enforce this act.

Sec. 17. To enforce the provisions of this act, the attorney

general, the department of treasury, the department, or their duly

authorized representatives; the state fire marshal; the commanding

officer, or a uniformed firefighter acting under the orders and

direction of the commanding officer, of the fire department of a

city, village, township, or county; or any law enforcement

personnel may examine the books, papers, invoices, and other

records of any person in possession, control, or occupancy of any

premises where cigarettes are placed, stored, sold, or offered for

sale and the stock of cigarettes on the premises. Every person in

the possession, control, or occupancy of any premises where

cigarettes are placed, sold, or offered for sale must give the

attorney general, the department of treasury, the department, or

their duly authorized representatives; the state fire marshal; the

commanding officer, or a uniformed firefighter acting under the

orders and direction of the commanding officer, of the fire

department of a city, village, township, or county; or any law

enforcement personnel the means, facilities, and opportunity to

conduct the examinations authorized under this section.

Sec. 19. This act does not prohibit any person from

manufacturing or selling cigarettes that do not meet the

requirements of section 5 if the cigarettes are or will be stamped

for sale in another state or are packaged for sale outside the

United States and that person has taken reasonable steps to ensure

that those cigarettes will not be sold or offered for sale to

persons located in this state.

Sec. 21. This act is repealed on the date that the director

notifies the secretary of state in writing that a federal reduced

cigarette ignition propensity standard that preempts this act has

been adopted and is in effect.

Sec. 23. A city, county, township, or village may not adopt or

enforce a local law, ordinance, resolution, or rule that