Less than a month after the 7th Circuit Court of Appeals affirmed a district court decision striking down the most controversial portions of Indiana’s vaping law, a new e-liquids bill designed to fall into compliance with federal regulations is moving through the General Assembly.
The Indiana Senate Judiciary Committee passed Senate Bill 1 with an 8-1 vote Wednesday, allowing the bill that eases many of the restrictions formerly placed on out-of-state vaping manufacturers to move to the full Senate. Sen. Randy Head, R-Logansport, told the committee that the Jan. 30 7th Circuit Court of Appeals decision, which ruled that Indiana cannot place restrictions on out-of-state manufacturers, caused the Legislature to “start over entirely” on its planned overhaul of the controversial bill.
In its opinion, the 7th Circuit criticized the “astoundingly specific” provisions in the 2015 Vapor Pens and E-Liquids Act, which required out-of-state vaping manufacturers to comply with stringent regulations related to plant cleanliness and audits. But the most controversial portions of the vaping law were “remarkably specific” security requirements that seemed to afford a monopoly to Lafayette-based security company Mulhaupt’s, the only security firm that could meet the law’s strict security criteria.
“These circumstances raise obvious concerns about protectionist purposes and what looks very much like a legislative grant of a monopoly to one favored in-state company in the security business,” 7th Circuit Judge David Hamilton wrote in the January opinion.
The amended bill, however, strips the various security requirements, including those that would require the ingredients be kept behind steel, locked doors and real-time video monitoring by security companies. In place of those requirements are provisions for child-proof caps, tamper resistant/evident packaging and lot numbers that can trace where e-liquids products were manufactured if they are found to be adulterated. Additionally, the amended bill preserves the rights of current permittees to continue to sell the products they have in place.
Further, at the request of the Indiana Alcohol and Tobacco Commission, the amended bill removes the ATC’s rule-making authority. Instead, the commission will now be charged with issuing permits and enforcing federal and other rules governing the e-liquids manufacturing process.
SB 1 ties Indiana to the existing federal restrictions, Head said, a change that will benefit the state economy by doing away with a “two-tiered system” in which Indiana has stricter regulations than elsewhere in the country. If such a system were in place, it would driver manufacturers to produce in other states, he said.
Asked after the committee vote if he thought the alleged monopoly actually existed, Head said the effect of it was the same regardless of whether it was real or perceived.
“The way the law was written, we didn’t say, ‘We can only choose one company,’” Head said. “But with the restrictions in place, only one company wanted to be in that space.
But Chris Brown, owner of Cool Breeze Vapor, said from his perspective, the monopoly was real, and it forced him to move his e-liquids company across state lines from Kentucky to Evansville.