DAR File No. 40210

Health, Disease Control and Prevention, Health Promotion

Rule R384-415

Electronic-Cigarette Substance Standards

Notice of Proposed Rule

(Amendment)

DAR File No.: 40210
Filed: 02/16/2016 10:57:38 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The amendments are intended to clarify requirements of the rule and also to alleviate some of the fiscal burden the rule could impose on Utah small businesses.

Summary of the rule or change:

Under Section R384-415-10, a provision has been clarified to read that retailers will be expected to have access to the documents in that section for a period of two years after the retailer purchases the electronic-cigarette substance. The required size of the safety warning statement has been reduced from 30 percent of the principle display panel to 20 percent. Also, the maximum allowed nicotine content for these products have been increased from 240mg per container to 360mg. However, the maximum nicotine concentration has stayed that same at 24mg/mL. Language has been added to the provision requiring child resistant packaging on all electronic-cigarette substance containers. The new language makes reference to any federal standards that might be put into place. This addition has been made to recognize the recently signed "Child Nicotine Poisoning Prevention Act" at the federal level. Finally, nonsubstantive grammatical changes have been made.

State statutory or constitutional authorization for this rule:

• Subsection 59-14-803(5)
• Section 26-57-103

Anticipated cost or savings to:

the state budget:

The amendments to the rule will not change the implementation of enforcement by the Utah Department of Health (UDOH). The same enforcement apparatus and cost that was to be used for the original rule will accommodate these amendments. As such, UDOH expects to experience no additional costs or savings. The original rule anticipated that there would be savings to the state by reducing the number of calls to the Utah Poison Control Center. In 2014, there were 131 poison control calls in Utah associated with electronic-cigarette substances. Each of these calls cost the state approximately $65. However, amendments to the rule that increase the allowed nicotine per container and reduce the size of the safety warning statement could reduce the positive effects of this rule. Therefore, compared to original rule, this amendment may reduce the savings to the state due to an increase in poison control calls. However it is difficult to provide a specific amount. Also, because the amendments may increase the number of poisonings (compared to the original rule) there may also be a reduced savings to the Utah Medicaid Program. Poisonings among Medicaid-covered individuals would increase medical bills. It has been estimated that the medical costs associated with a single poisoning is $15,000 for in-hospital treatment and $3,000 for an emergency room visit. Though UDOH cannot determine the number of electronic-cigarette related poisoning among Medicaid patients (and thus the total savings), it is expected that by increasing the allowed nicotine content and reducing the size of the warning statement that there would be reduced savings to Medicaid. Since the amendments will be made before enforcement of the rule, there will be no noticeable cost to state agencies and the overall net effect will likely be savings. However, the amended rule does reflect a potential opportunity cost when compared to the original language in the rule. (DAR NOTE: The original proposed new Rule R384-415 was published in the October 15, 2015, Bulletin under DAR No. 39797 and is effective as of 12/29/2015.)

local governments:

The amendments to the rule will not change the implementation of enforcement by UDOH. The same enforcement apparatus and cost that was to be used for the original rule will accommodate these amendments. As such, no additional costs or savings are anticipated.

small businesses:

UDOH anticipates that small businesses will experience reduced costs because of the amendments to the rule. Industry representatives have estimated that the amended rule will cost small specialty-businesses $12,500 to $1,600,000 during the first year of enforcement due to either a loss in sales or required improvements to their operations. However, representatives have also estimated that these amendments have reduced the cost of compliance by $1,500 to $160,000. UDOH cannot estimate cost or savings to the industry as a whole because the number of small specialty-businesses is unknown. The wide range in the cost estimate perhaps reflects the large variability in product quality that exists in the industry. Much of the responsibility to comply with the rule will fall on manufacturers who sell to Utah retailers. Industry representatives estimate that the amended rule will cost a Utah small-manufacturer approximately $15,500 to $266,000 over the first year of enforcement. However, representatives also have estimated that the amendments to increase the allowed nicotine content and decrease the size of the safety warning statement have reduced the cost to comply by $17,000 to $35,000. UDOH cannot estimate the cost or savings to the industry as a whole because the number of small manufacturers is unknown. The manufacturer could also face non-fiscal costs. Prescribing manufacturer labeling requirements may be perceived as an infringement of the manufacturer's freedom of speech. Also, the manufacturer may face a perceived infringement on their intellectual property if product information is requested by the enforcing agency. These perceived non-fiscal costs may be somewhat alleviated by the amendments. The small specialty-retailer will also face costs and savings because of the rule. Industry representatives estimate that the amended rule will cost a small specialty-retailer approximately $46,350 to $1,600,000 during the first year of enforcement due largely to a loss in sales. This cost estimate is based on the assumption that consumers would not purchase an alternative product if their selection of products was limited. The small specialty-retailer may incur come small costs to educate staff on compliance with the rule. It is not possible to predict these costs due to varying circumstances, but to reduce this burden the state and local health department will provide support. However, representatives also estimate that the amendments allowing for a higher nicotine content and smaller warning statements have reduced the cost to comply by $1,500 to $160,000. The amendments will allow retailers to keep more of their current products on the market, hence reducing the potential loss in sales and the potential of local fines. UDOH cannot estimate the cost and savings to the industry as a whole because the number of small specialty-businesses is unknown. It is expected that small general-retailers will incur little cost through the enforcement of the rule. General retailers typically sell manufacturer-sealed electronic-cigarette substances, which are exempt from the rule. General retailers may experience some cost through educating staff on the rule or through incurring local enforcement fines. However, because the number of small general-retailers who sell these products is unknown, UDOH cannot estimate the total cost they will incur.

persons other than small businesses, businesses, or local governmental entities:

These amendments will decrease the cost of compliance to businesses in the state. Those savings can be passed on to consumers in the price of electronic cigarette products. UDOH cannot estimate the total savings to the consumer due to varying circumstances of the individual retailers. However, the amendment to increase the allowed amount of nicotine and decrease the required warning statement may impose costs on other members of the public. The average medical bill associated with a poisoning is approximately $15,000 for inpatient treatment and $3,000 in emergency room fees. The cost of a poisoning in terms of lost productivity is approximately $2,600 per poisoning if the victim is hospitalized. It is difficult to estimate a population level cost. There is evidence that suggests that electronic-cigarettes among youth may be connected to using traditional tobacco. If this is the case, the amendments of the rule may increase future tobacco-related medical costs. The Centers for Disease Control and Prevention has estimated that in Utah, residents as a whole experience $542,000,000 annually because of tobacco products. General retailers may experience some cost through educating staff on the rule or through incurring local enforcement fines. However, because the number of general retailers who sell these products is unknown, UDOH cannot estimate the total cost they will incur.

Compliance costs for affected persons:

UDOH has sought comment from representatives in the electronic-cigarette industry. It is estimated that an individual small-manufacturer will incur approximately $15,500 to $266,000 in compliance costs during the first year of rule enforcement. It is expected that the majority of these costs will come from redesigning labels, and sales lost through limiting nicotine content. Therefore, this industry estimate is based on the assumption that the consumer would not purchase an alternate product if their selection was restricted. The small-specialty retailer will also incur compliance costs. It is estimated that a single, small specialty-retailer will need to pay approximately $46,400 to $1,600,000 to comply with the rule. It is expected that the majority of these costs will come from sales lost through not being able to sell products from out-of-state that don?t comply with the rule. However, this industry cost estimate is based on the assumption that the consumer would not purchase an alternate product if their selection was restricted. It is expected that general retailers will incur little compliance cost because the majority of the products they sell are exempt from the rule. The small portion of general retailers that will come under regulation may experience: 1) a negligible loss in sales; 2) some cost through educating staff; and 3) potential fines through local enforcement. However, because the number of general retailers who sell these products is unknown, UDOH cannot estimate what individual compliance cost they will incur.

Comments by the department head on the fiscal impact the rule may have on businesses:

The proposed amendment clarifies Subsection R384-415-10(a) that retailers will be expected to retain the records required in that section for two years after the purchase of the e-cigarette substance. It also reduces the size of the safety warning statement from 30 percent of the display panel to 20 percent and increase the maximum allowed nicotine content from 240mg per container to 360mg per container. Business will see a positive fiscal impact because the proposed amendment reduces a business's cost of compliance to this rule.

Joseph Miner, MD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health
Disease Control and Prevention, Health Promotion
CANNON HEALTH BLDG
288 N 1460 W
SALT LAKE CITY, UT 84116-3231

Direct questions regarding this rule to:

• Luke Chalmers at the above address, by phone at 801-538-6260, by FAX at , or by Internet E-mail at tpcprules@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

03/31/2016

This rule may become effective on:

04/07/2016

Authorized by:

Joseph Miner, Executive Director

R384. Disease Control and Prevention, Health Promotion.

R384-415. Electronic-Cigarette Substance Standards.

R384-415-1. Authority and Purpose.

(1) This rule is authorized by Section 26-57-103 and Subsection 59-14-803(5).

(2) This rule establishes standards for labeling, nicotine content, packaging, and product quality for electronic-cigarette substances for the regulation of electronic-cigarettes.

(3) This rule does not apply to a manufacturer-sealed electronic-cigarette substance.

(4) A product in compliance with this rule is not endorsed as safe.

 

R384-415-2. Definitions.

As used in this rule:

(1) "Artificial coloring" means the same as the term is defined in 21 C.F.R. 101.22(a)(4) (April 1, 2015) and as the term "color additive" is defined in 21 C.F.R 70.3(f) (April 1, 2015).

(2) "Artificial flavoring" means the same as the term is defined in 21 C.F.R 101.22(a)(1) (April 1, 2015).

(3) "Batch number" means the same as the term "lot number, control number, or batch number" is defined in 21 C.F.R. 210.3(b)(11) (April 1, 2015).

(4) "Business" means any sole proprietorship, partnership, joint venture, corporation, association, or other entity formed for profit or non-profit purposes.

(5) "Child resistant" means the same as the term "special packaging" is defined in 16 C.F.R 1700.1(a)(4) (January 1, 2015) and is tested in accordance with the method described in 16 C.F.R. 1700.20 (January 1, 2015).

(6) "Department" means the Utah Department of Health.

(7) "Electronic-cigarette" means the same as the term is defined in Subsections 26-38-2(1) and 59-14-802(2).

(8) "Electronic-cigarette Product" means the same as the term is defined in Subsection 59-14-802(3).

(9) "Electronic-cigarette substance" means the same as the term is defined in Subsection 59-14-802(4).

(10) "EP standards" means the standards established for medicines by the European Pharmacopeia, the European equivalent of the United States Pharmacopeia. The EP standards define requirements for the qualitative and quantitative composition of medicines, and the tests that are to be used on medicines, substances, and materials used in their production.

(11) "Generally Recognized As Safe" means an United States Food and Drug Administration designation that a substance added to food is generally recognized, by qualified experts, as having been adequately shown to be safe under the conditions of its intended use, as found in 21 C.F.R. 170.30 (April 1, 2015). Such a substance is exempted from the usual Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Sec. 301 et sq. (2013).

(12) "Local health department" means the same as the term is defined in Subsection 26A-1-102(5).

(13) "Manufacture" means the same as the term is defined in Subsection 26-57-102(5).

(14) "Manufacturer" means the same as the term is defined in Subsection 26-57-102(6).

(15) "Mg/mL" means milligrams per milliliter, a ratio for measuring an ingredient, in liquid form, where accuracy is measured in milligrams per milliliter, or a percentage equivalent.

(16) "Natural flavoring" means the same as the term is defined in 21 C.F.R 101.22(a)(3) (April 1, 2015).

(17) "Nicotine" means the same as the term is defined in the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Sec. 387(12) (2013).

(18) "Manufacturer-sealed electronic-cigarette substance" means the same as the term defined is in Subsection 26-57-102(6).

(19) "Pharmaceutical" means a compound manufactured for use as a medicinal drug.

(20) "Retailer" means any person who sells, offers for sale, or offers to exchange for any form of consideration, an electronic-cigarette substance to a consumer. This definition is without regard to the quantity of an electronic-cigarette substance sold, offered for sale, exchanged, or offered for exchange.

(21) "Retailing" means involvement in any of the activities listed in Subsection R384-415-2(20). This definition is without regard to the quantity of an electronic-cigarette substance sold, offered for sale, exchanged, or offered for exchange.

(22) "Straight color" means a color additive approved for human consumption in food and drugs as listed in 21 C.F.R. 73.1 through 21 C.F.R. 73.1991 (April 1, 2015), 21 C.F.R. 74.101 through 21 C.F.R. 74.1711 (April 1, 2015), and 21 C.F.R. 81.1 (April 1, 2015), and includes substances as are permitted by the specifications for such color.

(23) "Tamper-evident" means the packaging uses an indicator or barrier to entry that is distinctive by design, or must employ an identifying characteristic.

(24) "Transaction statement" means a statement, in paper or electronic form, which the manufacturer transferring ownership of the product certifies that the electronic-cigarette substance is in compliance with the standards in this rule.

(25) "USFDA Food Standards" means the United States Food and Drug Administration's common designation for standards of identity, standards of quality, and standards of fill of container promulgated under the Federal Food, Drug & Cosmetics Act, 21 U.S.C. Sec. 301 et seq. (2013)and as contained in 21 C.F.R. 130 through 21 C.F.R. 169 (April 1, 2015).

(26) "USP-NF standards" means the standards for drug products established by the United States Pharmacopeia and National Formulary. The USP-NF standards include standards for chemical and biological drug substances, dosage forms, compounded preparations, excipients, medical devices, and dietary supplements.

 

R384-415-3. General Labeling.

(1) The retailer shall ensure that a container holding an electronic-cigarette substance offered for sale to the consumer conforms to the following labeling standards:

(a) the label is smear resistant; and

(b) the label clearly displays:

(i) the nicotine content in mg/mL or percent by volume;

(ii) the manufacturer name;

(iii) the batch number;

(iv) the ingredients, as required in Section R384-415-4;

(v) a tamper-evident warning, which meets the requirements of Section R384-415-5; and

(vi) a safety warning, which meets the requirements of Section R384-415-6.

 

R384-415-4. Labeling of Ingredients.

(1) The retailer shall ensure that:

(a) an ingredient of an electronic-cigarette substance is listed on the label of the container holding an electronic-cigarette substance, except as provided for in Subsection R384-415-4(1)(c)(i).

(b) An artificial coloring ingredient is listed on the label using the classification system that best applies. Classification systems include:

(i) Food, Drug, and Cosmetic color designation and number;

(ii) Drug and Cosmetic color designation and number; or

(iii) the generic straight color name, if the artificial color is not classified under the systems found in Subsection R384-415-4(1)(b)(i) or Subsection R384-415-4(1)(b)(ii).

(c)(i) An ingredient included in the manufacturer's proprietary mixture of flavorings is exempt from being listed on the label by name.

(ii) An ingredient included in the manufacturer's proprietary mixture of flavorings is listed on the label under the generic term of artificial flavoring, natural flavoring, or both.

 

R384-415-5. Labeling of Tamper-Evident Warning.

(1) The retailer shall ensure that the label of an electronic-cigarette substance displays a tamper-evident warning alerting the consumer to the tamper-evident feature of the packaging

(2) The retailer shall ensure that the tamper-evident warning:

(a) is prominently displayed to consumers;

(b) is placed on the label so that it would be unaffected if the tamper-evidence feature is removed; and

(c) lists the type of tamper-evident feature used with the product.

 

R384-415-6. Labeling of Safety Warning.

(1) The retailer shall ensure that an electronic-cigarette substance offered for sale to the consumer features a safety warning stating "nicotine is addictive and poisonous. Keep away from children and pets".

(2) The retailer shall ensure that the safety warning:

(a) occupies at least [30]20percent of the largest panel of the container and any additional immediate packaging;

(b) is in capitalized letters;

(c) has a font size that occupies the maximum amount of the area described in Subsection R384-415-6(2)(a);

(d) uses the Helvetica, Arial, or Univers font; and

(e) uses either a black font on a white background or a white font on a black background.

 

R384-415-7. Nicotine Content.

(1) The retailer shall comply with the following nicotine content standards regarding an electronic-cigarette substance sold to the consumer:

(a) The nicotine content for an electronic-cigarette substance is limited to [240]360 mg per container, and does not exceed a 24mg/mL concentration.

(b) The nicotine level for an electronic-cigarette substance is limited to a 10% variation in mg/mL above the content level indicated on the label.

(c) An electronic-cigarette substance labeled 0 mg/mL or 0% by volume contains no nicotine.

 

R384-415-8. Packaging.

(1) The retailer shall ensure that the packaging of an electronic-cigarette substance intended for sale to a consumer;

(a) is certified as child resistant, and compliant with federal standards and law concerning child nicotine poisoning prevention;

(b) does not leak at the time of sale; and

(c) utilizes a tamper-evident feature by means of one or more of the following:

(i) a bubble pack;

(ii) a heat shrink band;

(iii) a breakable cap; or

(iv) an inner-seal.

 

R384-415-9. Product Quality.

(1) The retailer shall ensure that an ingredient in an electronic-cigarette substance is compliant with either USP-NF standards, EP standards, USFDA Food Standards, or is Generally Recognized As Safe at the time of sale.

(2) The retailer shall be prohibited from selling an electronic-cigarette substance that contains:

(a) vitamins or other additives that create the impression that an electronic-cigarette substance has a health benefit or presents reduced health risks;

(b) pharmaceuticals;

(c) caffeine or taurine or other additives and stimulant compounds that are associated with energy and vitality;

(d) illegal or controlled substances as identified in Section 58-37-3; and

(e) additives having coloring properties for emissions.

 

R384-415-10. Record Keeping and Testing.

(1) The retailer shall provide the electronic-cigarette substances transaction statement to the [department]Department or the local health department within five working days of a request. The retailer shall ensure that the transaction statement includes manufacturer certifications that:

(a) the nicotine content of an electronic-cigarette substance is compliant with Section R384-415-7;

(b) the packaging of an electronic cigarette-substance is child-resistant; and

(c) an ingredient used in an electronic-cigarette substance meets the appropriate standard found in Section R384-415-9.

(2)(a) The retailer shall have a system in place to trace production of an electronic-cigarette substance through the labeled batch number to the ingredients used in manufacturing.

(b) The retailer shall provide documents produced from batch tracing to the enforcing agency within five working days of a request.

(c) The retailer shall ensure that documents produced through batch tracing provide evidence in support of the electronic-cigarette substances transaction statement.

(3) (a) The retailer shall [maintain]have access to the documents described in Subsections R384-415-10(1) and R384-415-10(2) for a period of two years after the retailer purchases the electronic-cigarette substance.

(b) the retailer shall provide the documents described in Subsections R384-415-10(1) and R384-415-10-(2) to the Department or the local health department within 5 working days of a request.

 

R384-415-11. Enforcement.

(1) The [department]Department may enforce and seek penalties for the violation of public health rules including, the standards for electronic cigarettes set forth in this rule as prescribed in Sections 26-23-1 through 26-23-10.

(2) A local health department may enforce and seek penalties for the violation of the standards for electronic cigarettes set forth in this rule. A local health department shall have authority to enforce and seek penalties for violations of public health law including this rule as is found in Sections 26-23-1 through 26-23-10, 26A-1-108, 26A-1-114(1) and 26A-1-123.

(3) The [department]Department or local health department is responsible to make a determination as to if a person holding a Utah State Tax Commission license to sell electronic cigarettes has violated the standards of this rule. If the [department]Department or local health department makes such a determination it shall notify the Utah State Tax Commission to revoke the person's license as provided in Subsection 59-14-803(5).

(4) Administrative or civil enforcement of this rule by the [department]Department or local health departments does not preclude criminal enforcement by a law enforcement agency and prosecution of any violation of the standards in this rule that can constitute a criminal offense under state law.

 

KEY: electronic cigarettes, nicotine, standards, Electronic Cigarette Regulation Act

Date of Last Substantive Amendment: [December 29, 2015]2016

Authorizing, and Implemented of Interpreted Law: 26-57-103; 59-14-803(5)