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1 State of Arkansas As Engrossed: S3/19/25
2 95th General Assembly
A Bill
3 Regular Session, 2025 SENATE BILL 455
4
5 By: Senator J. Bryant
6 By: Representative Gonzales
7
8 For An Act To Be Entitled
9 AN ACT TO ALLOW REGULATION OF HEMP PRODUCTS BY
10 ARKANSAS TOBACCO CONTROL; TO AMEND THE UNIFORM
11 CONTROLLED SUBSTANCES ACT TO REMOVE CERTAIN
12 SUBSTANCES THAT ARE DEFINED AS HEMP PRODUCTS; AND FOR
13 OTHER PURPOSES.
14
15
16 Subtitle
17 TO ALLOW REGULATION OF HEMP PRODUCTS BY
18 ARKANSAS TOBACCO CONTROL; AND TO AMEND
19 THE UNIFORM CONTROLLED SUBSTANCES ACT TO
20 REMOVE CERTAIN SUBSTANCES THAT ARE
21 DEFINED AS HEMP PRODUCTS.
22
23 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
24
25 SECTION 1. Arkansas Code � 5-64-101(16)(B)(vi), concerning the
26 exclusion from the definition of "marijuana" within the Uniform Controlled
27 Substances Act, is amended to read as follows:
28 (vi) Hemp-derived cannabidiol that: Hemp as defined
29 in � 20-56-501 or
30 (a) Contains not more than three-tenths of one
31 percent (0.3%) of delta-9 tetrahydrocannabinol (THC) on a dry weight basis as
32 verified by a nationally accredited laboratory for quality, purity, and
33 accuracy standards; and
34 (b) Is not approved by the United States Food
35 and Drug Administration for marketing as a medication;
36
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1 SECTION 2. Arkansas Code � 5-64-215(a)(2), concerning the substances
2 in Schedule VI of the Uniform Controlled Substances Act, is amended to read
3 as follows:
4 (2) Tetrahydrocannabinols, unless the tetrahydrocannabinol is:
5 (A) Contained in hemp-derived cannabidiol hemp or a hemp
6 product under � 20-56-501; or
7 (B) Not more than three-tenths of one percent (0.3%) of
8 delta-9 tetrahydrocannabinol in the hemp-derived cannabidiol on a dry weight
9 basis as verified by a nationally accredited laboratory for quality, purity,
10 and accuracy standards; and
11 (C)(B) Not approved Approved by the United States Food and
12 Drug Administration for marketing as a medication;
13
14 SECTION 3. Arkansas Code � 5-64-215(a)(5)(A)(i), concerning the
15 substances in Schedule VI of the Uniform Controlled Substances Act, is
16 amended to read as follows:
17 (A)(i) Tetrahydrocannabinols, including without limitation
18 the following:
19 (a) Delta-1 cis or trans tetrahydrocannabinol,
20 otherwise known as a delta-9 cis or trans tetrahydrocannabinol, and its
21 optical isomers;
22 (b) Delta-6 cis or trans tetrahydrocannabinol,
23 otherwise known as a delta-8 cis or trans tetrahydrocannabinol, and its
24 optical isomers; and
25 (c) Delta-3,4 cis or trans
26 tetrahydrocannabinol, otherwise known as a delta-6a,10a cis or trans
27 tetrahydrocannabinol, and its optical isomers;
28 (d) Delta-10 cis or trans
29 tetrahydrocannabinol, and its optical isomers;
30 (e) Delta-8 tetrahydrocannabinol acetate
31 ester;
32 (f) Delta-9 tetrahydrocannabinol acetate
33 ester;
34 (g) Delta-6a,10a tetrahydrocannabinol acetate
35 ester;
36 (h) Delta-10 tetrahydrocannabinol acetate
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1 ester;
2 (i) A product derived from industrial hemp
3 that was produced as a result of a synthetic chemical process that converted
4 the industrial hemp or a substance contained in the industrial hemp into
5 delta-8, delta-9, delta-6a,10a, or delta-10 tetrahydrocannabinol including
6 their respective acetate esters; and
7 (j) Any other psychoactive substance derived
8 therein.
9
10 SECTION 4. Arkansas Code � 19-6-831(b), effective until the
11 contingency in Acts 2023, No. 629, � 17, is met, is amended to read as
12 follows:
13 19-6-831. Arkansas Tobacco Control Revenue Fund.
14 (a) There is created on the books of the Treasurer of State, the
15 Auditor of the State, and the Chief Fiscal Officer of the State a special
16 revenue fund to be known as the "Arkansas Tobacco Control Revenue Fund".
17 (b)(1) All permit and license fees received by Arkansas Tobacco
18 Control under the Arkansas Tobacco Products Tax Act of 1977, � 26-57-201 et
19 seq., and � 20-56-501 et seq. shall be deposited into the State Treasury as
20 special revenues to the credit of the fund.
21 (2) The fund also shall consist of any other revenues authorized
22 by law.
23 (c)(1) The fund shall be used for expenses incurred by Arkansas
24 Tobacco Control in the organization, maintenance, operation, and merchant
25 education and training with regard to enforcement of � 5-27-227, the Arkansas
26 Tobacco Products Tax Act of 1977, � 26-57-201 et seq., � 20-56-501 et seq.,
27 and the Unfair Cigarette Sales Act, � 4-75-701 et seq.
28 (2) Expenditures of moneys in the fund are subject to the
29 General Accounting and Budgetary Procedures Law, � 19-4-101 et seq., the
30 Arkansas Procurement Law, � 19-11-201 et seq., and other applicable fiscal
31 laws.
32 (3) The receipts and disbursements of Arkansas Tobacco Control
33 shall be audited annually by Arkansas Legislative Audit.
34
35 SECTION 5. Arkansas Code � 19-6-831, effective if the contingency in
36 Acts 2023, No. 629, � 17, is met, is repealed.
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1 19-6-831. Arkansas Tobacco Control Revenue Fund.
2 (a) There is created on the books of the Treasurer of State, the
3 Auditor of the State, and the Chief Fiscal Officer of the State a special
4 revenue fund to be known as the "Arkansas Tobacco Control Revenue Fund".
5 (b)(1) All permit and license fees received by Arkansas Tobacco
6 Control under the Arkansas Tobacco Products Tax Act of 1977, � 26-57-201 et
7 seq., and � 20-56-401 et seq., shall be deposited into the State Treasury as
8 special revenues to the credit of the fund.
9 (2) The fund also shall consist of any other revenues authorized
10 by law.
11 (c)(1) The fund shall be used for expenses incurred by Arkansas
12 Tobacco Control in the organization, maintenance, operation, and merchant
13 education and training with regard to enforcement of � 5-27-227, the Arkansas
14 Tobacco Products Tax Act of 1977, � 26-57-201 et seq., � 20-56-401 et seq.,
15 and the Unfair Cigarette Sales Act, � 4-75-701 et seq.
16 (2) Expenditures of moneys in the fund are subject to the
17 General Accounting and Budgetary Procedures Law, � 19-4-101 et seq., the
18 Arkansas Procurement Law, � 19-11-201 et seq., and other applicable fiscal
19 laws.
20 (3) The receipts and disbursements of Arkansas Tobacco Control
21 shall be audited annually by Arkansas Legislative Audit.
22
23 SECTION 6. Arkansas Code Title 20, Chapter 56, is amended to add an
24 additional subchapter to read as follows:
25 Subchapter 5 -- Hemp Products
26
27 20-56-501. Definitions.
28 As used in this subchapter:
29 (1) "Hemp" means the plant Cannabis sativa and any part of the
30 plant, including the seeds of the plant, that contains a delta-9
31 tetrahydrocannabinol concentration of three-tenths of one percent (0.3%) or
32 less on a dry-weight basis, and all derivatives, extracts, cannabinoids,
33 isomers, acids, salts, and salts of isomers, whether growing or not;
34 (2) "Hemp product" means any product derived from or containing
35 hemp, including without limitation oils, extracts, delta-8
36 tetrahydrocannabinol, delta-10 tetrahydrocannabinol, and other hemp-derived
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1 cannabinoids; and
2 (3)(A) "Minor" means a person who is under twenty-one (21) years
3 of age.
4 (B) "Minor" does not include a person who is under twenty-
5 one (21) years of age if the person presents a military identification card
6 establishing that he or she is a member of the United States Armed Forces.
7
8 20-56-502. Regulation and enforcement.
9 (a) A hemp product that is sold at retail in this state shall be sold
10 in a serving size that contains no more than fifty milligrams (50 mg) in the
11 aggregate of one (1) or more hemp-derived cannabinoids.
12 (b) Arkansas Tobacco Control shall regulate and enforce the provisions
13 of this subchapter concerning hemp and hemp products.
14 (c) Arkansas Tobacco Control shall:
15 (1) Issue permits to manufacture, distribute, or sell hemp
16 products;
17 (2) Identify and disclose foreign ownership interests in
18 permitted operations;
19 (3) Conduct inspections of hemp product retailers and
20 manufacturers;
21 (4) Enforce age restrictions on the purchase of hemp products;
22 and
23 (5) Impose fines and penalties for violations of this
24 subchapter.
25
26 20-56-503. Permits.
27 (a) All manufacturers, wholesalers, and retailers of hemp products
28 shall obtain a permit from Arkansas Tobacco Control.
29 (b) The permit fees shall be as follows:
30 (1) Two hundred fifty dollars ($250) annually for wholesalers
31 and retailers of hemp products; and
32 (2) Five hundred dollars ($500) annually for manufacturers of
33 hemp products.
34 (c) A permit holder shall comply with all rules adopted by Arkansas
35 Tobacco Control, including without limitation:
36 (1) Registering the company with Arkansas Tobacco Control;
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1 (2) Disclosing ownership of the company; and
2 (3) Adhering to testing, packaging, and labeling requirements
3 under this subchapter.
4
5 20-56-504. Testing and safety.
6 (a)(1) Hemp products in this state shall be tested by an ISO/IEC 17025
7 accredited testing laboratory that is accredited by a Global Accreditation
8 Cooperation Incorporated recognized accreditation body or an equivalent body.
9 (2) The laboratory shall be accredited to the current ISO/IEC
10 17025 standard with the scope of the accreditation including hemp and hemp
11 products.
12 (b) Incoming raw material and products shall be subject to appropriate
13 test protocols, including without limitation testing for heavy metals,
14 mycotoxins, pesticides, and residual solvents to ensure the safety of the
15 finished product.
16 (c) Testing information and results shall be available on the
17 manufacturer's or brand's website or through a quick-response code or similar
18 method.
19
20 20-56-505. Packaging and labeling.
21 (a) A hemp product shall be packaged in a child-resistant container.
22 (b) A label on a hemp product shall clearly state:
23 (1) The ingredient listing in descending order, including all
24 cannabinoids;
25 (2) The website or quick-response code to testing information
26 and results;
27 (3) An indication that the hemp product is not intended for a
28 person under twenty-one (21) years of age;
29 (4) Warnings that reference contraindications, major allergen
30 warnings, and directions for use;
31 (5) The lot number and batch number; and
32 (6) Contact information for the manufacturer.
33
34 20-56-506. Advertising and marketing.
35 (a) Advertising for a hemp product shall not target minors.
36 (b) Packaging for a hemp product shall not use imagery associated with
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1 candy or any products that are marketed exclusively to children.
2
3 20-56-507. Manufacturing.
4 All hemp products sold in this state shall be manufactured in
5 accordance with good manufacturing practices.
6
7 20-56-508. Age restrictions.
8 (a) It is unlawful for any minor to purchase, possess, or use any hemp
9 product.
10 (b) A retailer shall verify the age of all purchasers of hemp products
11 through a government-issued identification.
12
13 20-56-509. Penalties.
14 (a) A violation of this subchapter may result in Arkansas Tobacco
15 Control taking any of the following actions:
16 (1) Fining up to one thousand dollars ($1,000) per violation;
17 (2) Suspending or revoking a permit issued under this
18 subchapter; or
19 (3) Pursuing criminal charges for repeat offenders or sales to
20 minors.
21 (b) All fees, fines, and penalties collected under this subchapter
22 shall be used to fund enforcement activities for this subchapter by Arkansas
23 Tobacco Control.
24
25 20-56-510. Rules.
26 The Director of Arkansas Tobacco Control and Arkansas Tobacco Control
27 may promulgate rules for the proper enforcement of their powers and duties
28 under this subchapter, including without limitation the regulation of
29 processing, transportation, delivery, sale, and purchase of hemp products in
30 accordance with this subchapter and the power to levy penalties for
31 violations of this subchapter.
32
33 20-56-511. Federal preemption.
34 Upon the certification of the Arkansas Tobacco Control that federal law
35 prohibits the sale or use of hemp products, this subchapter shall prohibit
36 the sale or use of hemp products in the same manner as the federal law.
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1
2 SECTION 7. Arkansas Code Title 20, Chapter 56, Subchapter 4, effective
3 if the contingency in Acts 2023, No. 629, � 17, is met, is repealed.
4 Subchapter 4 -- Hemp-Derived Products
5
6 20-56-401. Purpose.
7 It is the intent of this subchapter to provide regulation of certain
8 hemp-derived products to:
9 (1) Prevent the sale and use of illicit hemp-based products
10 within Arkansas; and
11 (2) Protect and promote the public health and welfare of the
12 residents of this state.
13
14 20-56-402. Definitions.
15 As used in this subchapter:
16 (1) "Annual" or "annually" means the fiscal year from July 1
17 through the next June 30;
18 (2) "Approved laboratory" means a laboratory that is accredited
19 by the National Institute on Drug Abuse, the National Environmental
20 Laboratory Accreditation Conference, the International Organization for
21 Standardization, or a similar accrediting entity as determined by Arkansas
22 Tobacco Control and that has been approved by the Director of Arkansas
23 Tobacco Control specifically for the testing of hemp-derived product;
24 (3) "Consumer" means a member of the public at large;
25 (4) "Days" means calendar days unless otherwise specified;
26 (5) "Finished product" means a product intended for consumer use
27 to be sold at retail;
28 (6) "Hemp" means the plant Cannabis sativa and any part of the
29 plant, including the seeds of the plant, that contains a delta-9
30 tetrahydrocannabinol concentration of three-tenths of one percent (0.3%) or
31 less on a dry-weight basis, and all derivatives, extracts, cannabinoids,
32 isomers, acids, salts, and salts of isomers, whether growing or not;
33 (7) "Hemp-derived e-liquid product" means a liquid hemp-derived
34 product that contains hemp that is inhaled when using a vapor product, and
35 that may or may not include without limitation propylene glycol, vegetable
36 glycerin, and flavorings;
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1 (8)(A) "Hemp-derived product" means a product intended for any
2 form of human consumption, including consumption by vapor inhalation, or a
3 component of a product, that is derived from hemp, including all derivatives,
4 extracts, cannabinoids, isomers, acids, salts, and salts of isomers, and any
5 product made from such derivatives, and that contains greater than three-
6 tenths of one percent (0.3%) tetrahydrocannabinol.
7 (B) "Hemp-derived product" includes a hemp-derived e-
8 liquid product and a vapor product.
9 (C) "Hemp-derived product" does not include:
10 (i) A product intended for animal consumption or
11 use;
12 (ii) A cosmetic as defined by � 20-56-202;
13 (iii) Any marijuana, medical marijuana, or other
14 cannabis product containing delta-9 tetrahydrocannabinol greater than three-
15 tenths of one percent (0.3%) on a dry-weight basis as administered, licensed,
16 and otherwise regulated by the Alcoholic Beverage Control Division, the
17 Medical Marijuana Commission, and the Department of Health under the Arkansas
18 Medical Marijuana Amendment of 2016, Arkansas Constitution, Amendment 98;
19 (iv) A raw hemp product, including any intact plant,
20 flower, buds, leaves, or stems;
21 (v) A drug in the form for which an application
22 filed in accordance with 21 U.S.C. � 355 is approved by the United States
23 Food and Drug Administration;
24 (vi) A dietary supplement as defined by the Federal
25 Food, Drug, and Cosmetic Act, 21 U.S.C. � 301 et seq.; or
26 (vii) A fabric, textile, cordage, fiber, fuel, paper,
27 construction material, plastic, seed, seed meal, and seed oil;
28 (9)(A) "Manufacturer" means a person that manufactures,
29 fabricates, assembles, or processes a hemp-derived product, including without
30 limitation federally licensed importers and federally licensed distributors
31 that deal in hemp-derived products.
32 (B) "Manufacturer" includes:
33 (i) A sales entity affiliate of the manufacturer or
34 any other entity representing the manufacturer with regard to the sale of
35 hemp-derived products produced by the manufacturer to wholesalers or
36 permitted retailers; and
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1 (ii) A person that mixes, compounds, extracts,
2 infuses, blends, processes, repackages, or resizes hemp-derived products
3 including the extraction of cannabinoids from hemp biomass.
4 (C) "Manufacturer" does not include a person who engages
5 in the agricultural production of hemp, such as growing, planting, and
6 harvesting of raw hemp biomass regulated by the State Plant Board;
7 (10) "Minor" means a person who is under twenty-one (21) years of
8 age;
9 (11) "Person" means an individual, retailer, wholesaler,
10 manufacturer, firm, association, company, partnership, limited liability
11 company, corporation, joint-stock company, club, agency, syndicate, the State
12 of Arkansas, county, municipal corporation or other political subdivision of
13 the state, receiver, trustee, fiduciary, or trade association;
14 (12) "Place of business" means the physical location:
15 (A) Where orders for hemp-derived products are taken or
16 received or where hemp-derived products are sold; and
17 (B) That is on file with Arkansas Tobacco Control;
18 (13) "Retailer" means a person that purchases hemp-derived
19 products from permitted wholesalers for the purpose of selling the hemp-
20 derived products in person and over the counter at retail to consumers;
21 (14)(A) "Sale" or "sell" means a transfer, exchange, or
22 barter in any manner or by any means for any consideration, including
23 distributing or shipping hemp-derived product in connection with a sale.
24 (B) A sale "in" or "into" a state refers to the state in
25 which the destination point of the hemp-derived product is located in the
26 sale without regard to where title was transferred.
27 (C) A sale "from" a state refers to the sale of a hemp-
28 derived product that is located in that state to the destination in question
29 without regard to where title was transferred;
30 (15) "Self-service display" means a display:
31 (A) That contains a hemp-derived product, or any component
32 of a hemp-derived product;
33 (B) That is located in an area where customers are
34 permitted; and
35 (C) In which the hemp-derived product, or any component of
36 a hemp-derived product, is readily accessible to a customer without the
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1 assistance of a salesperson;
2 (16) "Tetrahydrocannabinol" means a compound that is the natural,
3 primary active cannabinoid substance or its equivalent contained in the plant
4 of the genus cannabis or in the resinous extracts of the plant, including
5 derivatives or isomers derived from such cannabinoids;
6 (17) "Vapor product" means hemp-derived product that is an
7 electronic oral device of any size or shape that contains a vapor of hemp or
8 hemp-derived e-liquid product that when used or inhaled simulates smoking,
9 regardless of whether a visible vapor is produced, including without
10 limitation a device that:
11 (A) Is composed of a heating element, battery, electronic
12 circuit, chemical process, mechanical device, or a combination of heating
13 element, battery, electronic circuit, chemical process, or mechanical device;
14 (B) Works in combination with a cartridge, other
15 container, or liquid delivery device containing hemp or hemp-derived e-liquid
16 product and manufactured for use with vapor products;
17 (C) Is manufactured, distributed, marketed, or sold as any
18 type or derivation of a vapor product, e-cigarette, e-cigar, e-pipe, or any
19 other produced name or descriptor; and
20 (D) Does not include a product regulated as a drug or
21 device by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. � 301 et seq.,
22 as it existed on January 1, 2015;
23 (18) "Warehouse" means a place where hemp-derived products are
24 stored for another person and to or from which place the hemp-derived
25 products are shipped or delivered upon order by the owner of the hemp-derived
26 products, to the warehouse; and
27 (19) "Wholesaler" means a person other than a manufacturer or a
28 person owned or operated by a manufacturer that:
29 (A) Does business within the state;
30 (B) Purchases hemp-derived products from any source;
31 (C) Distributes or sells the hemp-derived products to
32 other wholesalers, or retailers; and
33 (D) Does not distribute or sell the hemp-derived products
34 at retail to consumers.
35
36 20-56-403. Construction.
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1 (a) A hemp-derived product shall not be delivered, sold, bought, or
2 used in this state except in conformity with all applicable laws and
3 regulations, including this subchapter and any rules promulgated under this
4 subchapter.
5 (b) A person shall not sell a hemp-derived product without being
6 permitted by Arkansas Tobacco Control.
7 (c) A product intended for human consumption or inhalation that is
8 derived from hemp and contains tetrahydrocannabinol shall not be permitted or
9 allowed under the laws of this state, other than hemp-derived products if
10 otherwise legal under state law.
11 (d)(1) A hemp-derived product shall not be combined with or contain
12 any of the following:
13 (A) Any liquid, hydrocolloid, animal-based substance,
14 thickener, sweetener, flavoring, synthetic product, propylene glycol,
15 vegetable glycerin, or other non-hemp-derived substance;
16 (B) Nicotine or tobacco; or
17 (C) Any amount of tetrahydrocannabinol as to create a
18 danger of misuse, overdose, accidental overconsumption, inaccurate dosage, or
19 other risk to the public.
20 (2) Medical devices, prescription drugs, or drugs otherwise
21 approved by the United States Food and Drug Administration shall not be
22 considered hemp-derived products.
23 (e) The business of handling, receiving, possessing, storing,
24 distributing, taking orders for, soliciting orders of, selling, offering for
25 sale, and dealing in, through sale, barter, or exchange, hemp-derived
26 products is declared to be a privilege under the Arkansas Constitution and
27 laws of the State of Arkansas.
28
29 20-56-404. Permits.
30 (a)(1) Each person listed in this section, before commencing business,
31 or if already in business, before continuing business, shall pay an annual
32 privilege fee and secure a permit from the Director of Arkansas Tobacco
33 Control.
34 (2) A person purchasing an existing permitted retail location
35 may, with the permission of the seller and Arkansas Tobacco Control, operate
36 under the selling owner's permit for no more than thirty (30) days from the
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1 date of the sale.
2 (b)(1) In addition to securing a permit under subsection (a) of this
3 section, a manufacturer whose products are sold in this state shall register
4 with the Secretary of the Department of Finance and Administration.
5 (2) A wholesaler of hemp-derived products shall secure the
6 proper wholesale permit.
7 (3) Every retailer of hemp-derived products that operates a
8 place of business shall secure the proper retail permit.
9 (c)(1) Permits shall be issued as follows:
10 (A) A permit for a sole proprietorship is issued in the
11 owner's name and in the fictitious business name, if any;
12 (B)(i) A permit for a partnership or limited liability
13 company is issued in the name of:
14 (a) The managing partner or managing member;
15 and
16 (b) The partnership or limited liability
17 company.
18 (ii) If the managing partner or managing member of a
19 limited liability company is a partnership, limited liability company, or
20 corporation, then the permit shall be issued in the name of:
21 (a) The president or chief executive officer;
22 and
23 (b) The partnership or limited liability
24 company; and
25 (C) A permit for a publicly traded or nonpublicly traded
26 corporation is issued in the name of the president or chief executive officer
27 of the corporation and in the name of the corporation.
28 (2) It is a violation for a permitted entity not to provide
29 written notification to the director within thirty (30) days of a change in
30 the following:
31 (A) The managing partner, limited liability company
32 managing member, or president or chief executive officer of a corporation,
33 partnership, or limited liability company; or
34 (B) The stockholders effecting twenty-five percent (25%)
35 or more of the total voting shares of a nonpublicly traded corporation.
36 (d)(1) When an entity transfers a business permitted under this
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1 subchapter, the entity to which the business is transferred:
2 (A) Shall apply for a new permit under this subchapter;
3 (B) May be issued a new permit under this subchapter; and
4 (C) May operate under the selling entity's permit for no
5 more than thirty (30) days from the date of the sale.
6 (2) When a partnership or limited liability company permitted
7 under this subchapter changes, removes, or replaces the managing partner,
8 managing member, president, or chief executive officer:
9 (A) The existing permit issued under this subchapter is
10 void; and
11 (B) The partnership or limited liability company:
12 (i) Shall apply for a new permit under this
13 subchapter;
14 (ii) May be issued a new permit under this
15 subchapter; and
16 (iii) May operate under the voided permit for no more
17 than thirty (30) days from the date of the change, removal, or replacement of
18 the permit.
19 (3) When a nonpublicly traded corporation permitted under this
20 subchapter changes, removes, or replaces the president or chief executive
21 officer named on the permit or changes, removes, or replaces a stockholder
22 who owns fifty percent (50%) or more of the total voting shares of the
23 nonpublicly traded corporation's stock:
24 (A) The permit issued under this subchapter is void; and
25 (B) The nonpublicly traded corporation:
26 (i) Shall apply for a new permit under this
27 subchapter;
28 (ii) May be issued a new permit under this
29 subchapter; and
30 (iii) May operate under the voided permit for no more
31 than thirty (30) days from the date of the change, removal, or replacement of
32 the permit.
33 (4) When a publicly traded corporation permitted under this
34 subchapter changes, removes, or replaces the president or chief executive
35 officer named on the permit or changes, removes, or replaces a stockholder
36 who owns fifty percent (50%) or more of the total voting shares of the
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1 publicly traded corporation's stock:
2 (A) The permit issued under this subchapter is void; and
3 (B) The publicly traded corporation:
4 (i) Shall apply for a new permit under this
5 subchapter;
6 (ii) May be issued a new permit under this
7 subchapter; and
8 (iii) May operate under the voided permit for no more
9 than thirty (30) days from the date of the change, removal, or replacement of
10 the permit.
11 (e) An entity may apply for and be issued a permit under this
12 subchapter in advance of the effective date of the permit to facilitate
13 continuity of business operations.
14
15 20-56-405. Permits -- Location -- Background check required.
16 (a) A retail, wholesale, or manufacturer permit shall not be issued to
17 a residential address, a mobile structure or vehicle, or for an address not
18 zoned appropriately for the business seeking to secure the permit.
19 (b) A permit shall not be issued to:
20 (1) A person who has pleaded guilty or nolo contendere to or
21 been found guilty of a felony; or
22 (2) A business owned or operated, in whole or in part, by a
23 person who has pleaded guilty or nolo contendere to or been found guilty of a
24 felony.
25 (c) Arkansas Tobacco Control shall conduct a criminal background check
26 on each permit applicant and application, utilizing its Arkansas Crime
27 Information Center access as a law enforcement agency, in accordance with ��
28 12-12-1008 -- 12-12-1011.
29
30 20-56-406. Permits -- Annual privilege fees.
31 (a) The annual privilege fee for each permit authorized by this
32 subchapter is established as follows:
33 (1) Wholesale Hemp-derived Products Permit.............$5,000
34 (2) Retail Hemp-derived Products Permit.............$5,000
35 (3) Manufacturer Hemp-derived Products Permit.............$5,000
36 (b)(1) All permits issued under this subchapter shall expire on June
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1 30 following the effective date of issuance.
2 (2)(A) Upon the failure to timely renew a permit issued under
3 this subchapter, a late fee of two (2) times the amount of the appropriate
4 permit fee shall be owed in addition to the annual privilege fee for the
5 permit.
6 (B) An expired permit that is not renewed before September
7 1 following the expiration of the permit shall not be renewed, and the holder
8 of the expired permit shall submit an application for a new permit.
9 (3) A permit shall not be issued to the applicant until the late
10 fee and the permit fee have been paid.
11 (c) A permit issued under this subchapter shall not be renewed for a
12 permit holder who is delinquent more than ninety (90) days on a privilege
13 fee, tax relating to the sale or dispensing of hemp-derived products, or any
14 other state and local tax due to the Secretary of the Department of Finance
15 and Administration.
16 (d) A person who is delinquent more than ninety (90) days on a state
17 or local tax may not renew or obtain a permit issued under this subchapter
18 except upon certification that the permit holder has entered into a repayment
19 agreement with the Department of Finance and Administration and is current on
20 the payments.
21 (e) A permit holder who has unpaid fees, civil penalties, or an
22 unserved permit suspension may not transfer, sell, or give hemp-derived
23 product inventory of the business associated with the permit to a third party
24 until all fees and civil penalties are paid in full and all suspensions are
25 completed successfully, nor shall any third party be issued a new permit for
26 the business location.
27 (f) Each manufacturer, wholesaler, and retailer shall retain copies of
28 all invoices for the purchase or sale of any hemp-derived products for a
29 period of at least ten (10) years subject to examination by the Secretary of
30 the Department of Finance and Administration and the Director of Arkansas
31 Tobacco Control or their authorized agents upon demand at any time during
32 regular business hours.
33 (g) A retailer shall:
34 (1) Maintain copies of at least the last three hundred sixty-
35 five (365) days of hemp-derived product invoices, which the retailer shall
36 provide immediately upon demand;
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1 (2)(A) Make the invoices that are older than three hundred
2 sixty-five (365) days available upon demand at any time during normal
3 business hours in the retail store.
4 (B) Except as provided in subdivision (g)(2)(C) of this
5 section, an agent of Arkansas Tobacco Control may determine a reasonable time
6 frame for which invoices are to be provided under subdivision (g)(2)(A) of
7 this section.
8 (C) An invoice that is provided seventy-two (72) hours or
9 more after the demand shall not be considered for purposes of determining a
10 violation of this subsection;
11 (3) Retain invoices for all hemp-derived products in the retail
12 store even if the invoice for the hemp-derived products is older than three
13 (3) years;
14 (4) Maintain a copy of the signed server awareness forms for
15 each employee of the retailer who engages in the sale of hemp-derived
16 products, which the retailer shall provide immediately upon demand;
17 (5)(A) Maintain a copy of any complete transfer forms showing:
18 (i) The hemp-derived products that were transferred;
19 (ii) The permitted location from which the hemp-
20 derived products were transferred; and
21 (iii) When the transfer occurred.
22 (B) A transfer form shall be completed contemporaneously
23 with the transfer and shall be provided immediately by the retailer upon
24 demand; and
25 (6) If any inventory was submitted with a permit application,
26 maintain a copy of the submitted inventory form, which the retailer shall
27 provide immediately upon demand.
28 (h) A wholesaler and manufacturer shall:
29 (1) Maintain ten (10) years of hemp-derived product invoices
30 that are available upon demand during normal business hours in the permitted
31 location; and
32 (2) Permit Arkansas Tobacco Control and authorized personnel of
33 Arkansas Tobacco Control to enter into and inspect stock of hemp-derived
34 products, and any documents and records relating to receipts and
35 disbursements of hemp-derived products.
36 (i) An invoice from a wholesaler to a retailer shall contain the name
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1 or other identifying information of the wholesaler and the retailer.
2 (j)(1) A nonresident wholesaler shall also keep a record of all hemp-
3 derived products purchased for distribution within this state.
4 (2) All books, records, and memoranda pertaining to the purchase
5 and sale of the hemp-derived products under subdivision (j)(1) of this
6 section shall be subject to inspection by Arkansas Tobacco Control.
7 (k) Authorized personnel of Arkansas Tobacco Control shall not release
8 to the Arkansas Tobacco Control Board or to the public any information
9 identifying customers of the manufacturer, wholesaler, or warehouse except
10 when necessary to notify the board of alleged violations of this subchapter.
11
12 20-56-407. Permits -- Not transferable -- Duplicates.
13 (a) A permit under this subchapter is not:
14 (1) Transferable to a subsequent owner or operator; or
15 (2) Transferable to a different physical location unless the
16 permit holder obtains permission from the Director of Arkansas Tobacco
17 Control.
18 (b) A person purchasing an existing permitted retail location may
19 operate under the selling owner's permit for no more than thirty (30) days
20 from the date of the sale.
21 (c) When a permit is lost by a permit holder, a duplicate permit may
22 be issued upon application and for a fee of five dollars ($5.00) when
23 sufficient proof has been given to the Director of Arkansas Tobacco Control.
24
25 20-56-408. Permits -- Suspension or revocation.
26 (a) All permits issued under this subchapter shall be suspended or
27 revoked by the Director of Arkansas Tobacco Control for any violation of this
28 subchapter or the rules pertaining to this subchapter, subject to a hearing
29 before the Arkansas Tobacco Control Board at the next regularly scheduled
30 board meeting.
31 (b) The director may revoke all permits to deal in hemp-derived
32 products associated with any person who is convicted of or pleads guilty or
33 nolo contendere to criminally violating this subchapter, subject to a hearing
34 before the board at the next regularly scheduled board meeting.
35
36 20-56-409. Advertising prohibitions and packaging requirements.
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1 (a) A hemp-derived product distributed or offered for sale in this
2 state shall include the following information on the product label or product
3 packaging:
4 (1) The name of the hemp-derived product manufacturer, whether
5 in-state or out-of-state, and distributor, whether in-state or out-of-state;
6 (2) Product labeling clearly showing that the product contains
7 material derived from hemp and not marijuana or medical marijuana; and
8 (3) Any other marking, words, statement, or symbol as required
9 by Arkansas Tobacco Control through rules.
10 (b) A person shall not advertise, market, or offer for sale in this
11 state any hemp-derived product by using, in the labeling or design of the
12 product, its packaging, or in its advertising or marketing materials, trade
13 dress, trademarks, branding, or other related imagery that:
14 (1) Imitates or replicates those of food brands or other related
15 products that are marketed to or are commonly associated with children or
16 minors, including without limitation breakfast cereal, cookies, juice drinks,
17 soft drinks, frozen drinks, ice creams, sorbets, sherbets, and frozen pops;
18 (2) Depicts or signifies characters or symbols that are known to
19 a reasonable person to appeal primarily to or are commonly associated with
20 children or minors, including without limitation superheroes, cartoons or
21 cartoon characters, including anime characters, comic book characters, video
22 game characters, television show characters, movie characters, mythical
23 creatures, unicorns, or that otherwise incorporates related imagery or
24 scenery; or
25 (3) Uses the terms "candy", "candies", "cake", "cakes", "pies",
26 or "cupcakes" or any variant of these terms, or any other term referencing a
27 type or brand of candy, cakes, pastries, or pies, including types or brands
28 of candy, cakes, pastries, or pies that do not include the words "candy",
29 "candies", "cake", "cakes", "pies", or "cupcakes" in their names, labels, or
30 slogans.
31
32 20-56-410. Testing.
33 (a) All hemp-derived products sold in this state shall be tested by an
34 approved laboratory.
35 (b) An approved laboratory shall be an independent third-party
36 laboratory.
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1 (c) A hemp-derived product sold in this state shall be tested for the
2 following and marked as to the hemp-derived product chemical makeup before
3 being sold to consumers:
4 (1) Cannabinoid profile;
5 (2) Solvents;
6 (3) Pesticides;
7 (4) Microbials;
8 (5) Heavy metals; and
9 (6) Any non-hemp-based substance.
10 (d) A hemp-derived product shall not be distributed or sold in this
11 state without a certificate of analysis from an approved laboratory that
12 confirms:
13 (1) The hemp-derived product was tested by an approved
14 laboratory;
15 (2) A tested representative sample of the hemp-derived product
16 contained a total delta-9 tetrahydrocannabinol concentration that did not
17 exceed three-tenths of one percent (0.3%) under this subchapter; and
18 (3) A detailed analysis and list of chemical makeup of the
19 tested hemp-derived product under subsection (c) of this section.
20 (e) Arkansas Tobacco Control may periodically sample, analyze, and
21 test any hemp-derived product located in this state.
22 (f) The Director of Arkansas Tobacco Control shall:
23 (1) Investigate and issue subpoenas to any permittee or approved
24 laboratory used by a permittee that the director has reasonable suspicion of
25 intentionally producing falsified test results on hemp-derived products; and
26 (2) Promulgate rules for the enforcement of this section and set
27 penalties for any violation of the rules.
28
29 20-56-411. Providing minors with hemp-derived products -- Purchase,
30 use, or possession prohibited.
31 (a)(1) It is unlawful for any person to give, barter, or sell to a
32 minor a hemp-derived product.
33 (2) Except as provided in subdivision (a)(3) of this section, a
34 person who pleads guilty or nolo contendere to or is found guilty of
35 violating subdivision (a)(1) of this section is guilty of a Class A
36 misdemeanor.
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1 (3) An employee or owner of a retail location permitted under
2 this subchapter who violates subdivision (a)(1) of this section while inside
3 the retail location upon conviction is subject to a fine not to exceed one
4 hundred dollars ($100) per violation.
5 (b)(1) It is unlawful for a minor to:
6 (A) Use or possess or to purchase or attempt to purchase a
7 hemp-derived product; or
8 (B) For the purpose of obtaining or attempting to obtain a
9 hemp-derived product, falsely represent himself or herself not to be a minor
10 by displaying proof of age that is false, fraudulent, or not actually proof
11 of the minor's age.
12 (2) Any hemp-derived product found in the possession of a minor
13 may be confiscated and destroyed by a law enforcement officer.
14 (c)(1) It is not an offense under subsection (b) of this section if:
15 (A) The minor was acting at the direction of an authorized
16 agent of Arkansas Tobacco Control to enforce or ensure compliance with laws
17 relating to the prohibition of the sale of hemp-derived product to minors;
18 (B) The minor was acting at the direction of an authorized
19 agent of the Division of Aging, Adult, and Behavioral Health Services of the
20 Department of Human Services to compile statistical data relating to the sale
21 of hemp-derived products to minors;
22 (C) The minor was acting at the request of a permit holder
23 to assist the permit holder by performing a check on the permit holder's own
24 retail business to see if the permit holder's employees would sell hemp-
25 derived products to the minor; or
26 (D) The minor was acting as an agent of a retail permit
27 holder within the scope of employment.
28 (2) A minor performing activities under subdivision (c)(1) of
29 this section shall:
30 (A) Display the appearance of a minor;
31 (B) Have the written consent of the minor's parent or
32 guardian to perform the activity on file with the agency utilizing the minor;
33 and
34 (C)(i) Present a true and correct identification if asked.
35 (ii) Any failure on the part of a minor to provide
36 true and correct identification upon request is a defense to any action under
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1 this section or a civil action under � 26-57-256.
2 (d) Any person who sells hemp-derived products has the right to deny
3 the sale of any hemp-derived product to any person.
4 (e) It is unlawful for any person who has been issued a permit or a
5 license under this subchapter to fail to display in a conspicuous place a
6 sign indicating that the sale of hemp-derived products to or purchase or
7 possession of hemp-derived products by a minor is prohibited by law.
8 (f) It is unlawful for any manufacturer whose hemp-derived product is
9 distributed in this state and any person who has been issued a permit or
10 license under this subchapter to distribute a free sample of any hemp-derived
11 product, or any component of a hemp-derived product or coupon that entitles
12 the holder of the coupon to any free sample of any hemp-derived product, or
13 any component of a hemp-derived product:
14 (1) In or on any public street or sidewalk within five hundred
15 feet (500) of any playground, public school, or other facility when the
16 playground, public school, or other facility is being used primarily by
17 minors for recreational, educational, or other purposes; or
18 (2) To any minor.
19 (g) It is unlawful for any person that has been issued a permit or
20 license under this subchapter to:
21 (1) Sell or distribute a hemp-derived product through a self-
22 service display, a vending machine, or an order executed solely over the
23 internet or similar means; or
24 (2) Advertise or promote hemp-derived products in a manner that
25 is intended to appeal to children.
26 (h) Any retail permit holder or license holder who violates any
27 provision in this section is deemed guilty of a violation and subject to
28 penalties under � 26-57-256.
29 (i)(1) A notice of an alleged violation of this section shall be given
30 to the holder of a retail permit or license or an agent of the holder within
31 ten (10) days of the alleged violation.
32 (2)(A) The notice under subdivision (i)(1) of this section shall
33 contain the date and time of the alleged violation.
34 (B)(i) The notice under subdivision (i)(1) of this section
35 shall also include either the name of the person making the alleged sale or
36 information reasonably necessary to determine the location in the store that
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1 allegedly made the sale.
2 (ii) When appropriate, information under subdivision
3 (i)(2)(B)(i) of this section should include, but not be limited to, the:
4 (a) Cash register number of the sale in the
5 store;
6 (b) Physical location of the sale in the
7 store; and
8 (c) If possible, the lane or aisle number of
9 the sale in the store.
10 (j) Notwithstanding the provisions of subsection (h) of this section,
11 the court shall consider the following factors when reviewing a possible
12 violation:
13 (1) The business has adopted and enforced a written policy
14 against selling hemp-derived products to minors;
15 (2) The business has informed its employees of the applicable
16 laws regarding the sale of hemp-derived products to minors;
17 (3) The business has required employees to verify the age of a
18 customer attempting to purchase a hemp-derived product by way of photographic
19 identification;
20 (4) The business has established and imposed disciplinary
21 sanctions for noncompliance; and
22 (5) That the appearance of the purchaser of the hemp-derived
23 product was such that an ordinary prudent person would believe him or her to
24 be of legal age to make the purchase.
25 (k) A person convicted of violating any provision of this section
26 whose permit or license to distribute or sell a hemp-derived product is
27 suspended or revoked upon conviction shall surrender to the court any permit
28 or license to distribute or sell a hemp-derived product, and the court shall
29 transmit the permit or license to distribute or sell a hemp-derived product
30 to the Director of Arkansas Tobacco Control:
31 (1) To suspend or revoke the person's permit or license to
32 distribute or sell a hemp-derived product and to not renew the permit or
33 license; and
34 (2) Not to issue any new permit or license to that person for
35 the period of time determined by the court in accordance with this section.
36
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1 20-56-412. Enforcement -- Penalties.
2 (a) It is the duty of all state, county, and city officers to assist
3 Arkansas Tobacco Control in enforcing this subchapter.
4 (b) A person within the jurisdiction of this state who is not
5 permitted to sell hemp-derived products to retailers or consumers and who
6 sells, takes orders from, delivers, or causes to be delivered immediately or
7 in the future any hemp-derived products to retailers or consumers in the
8 State of Arkansas is guilty of a Class A misdemeanor.
9 (c) A person engaged in buying or selling hemp-derived products in
10 this state without first obtaining the proper permit upon conviction is
11 guilty of a Class A misdemeanor.
12 (d) This subchapter does not prohibit in any form the continuous
13 transportation through Arkansas of the plant Cannabis sativa L., and any part
14 of that plant, including the seeds thereof and all derivatives, extracts,
15 cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or
16 not, with a total delta-9 tetrahydrocannabinol concentration of not more than
17 three-tenths of one percent (0.3%) on a dry-weight basis, from one licensed
18 hemp producer in another state to a licensed hemp handler in another state.
19
20 20-56-413. Rules.
21 The Director of Arkansas Tobacco Control and Arkansas Tobacco Control
22 may promulgate rules for the proper enforcement of their powers and duties
23 under this subchapter, including without limitation the regulation of
24 processing, transportation, delivery, sale, and purchase of hemp-derived
25 products in accordance with this subchapter and the power to levy penalties
26 for violations of this subchapter.
27
28 SECTION 8. Arkansas Code � 26-57-247(b), effective until the
29 contingency in Acts 2023, No. 629, � 17, is met, concerning those unstamped
30 and untaxed items that may be seized by the Director of Arkansas Tobacco
31 Control, is amended to add an additional subdivision read as follows:
32 (5) Hemp products are possessed, sold, or offered for sale in
33 violation of � 20-56-501 et seq.
34
35 SECTION 9. Arkansas Code � 26-57-247, effective if the contingency in
36 Acts 2023, No. 629, � 17, is met, is repealed.
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1 26-57-247. Seizure, forfeiture, and disposition of tobacco products
2 and other property.
3 (a) Cigarettes to which stamps have not been affixed as provided by
4 law are subject to seizure and shall be held as evidence for prosecution.
5 (b) The Director of Arkansas Tobacco Control may seize and hold for
6 disposition of the courts or the Arkansas Tobacco Control Board all tobacco
7 products, vapor products, alternative nicotine products, e-liquid products,
8 or hemp-derived products found in the possession of a person dealing in, or a
9 consumer of, tobacco products, vapor products, alternative nicotine products,
10 e-liquid products, or hemp-derived products if:
11 (1) Prima facie evidence exists that the full amount of excise
12 tax due on the tobacco products has not been paid to the Secretary of the
13 Department of Finance and Administration;
14 (2) Tobacco products, vapor products, alternative nicotine
15 products, or e-liquid products are in the possession of a wholesaler who does
16 not possess a current Arkansas wholesale permit;
17 (3) A retail establishment does not possess a current Arkansas
18 retail permit;
19 (4) The tobacco products, vapor products, alternative nicotine
20 products, or e-liquid products have been offered for sale to the public at
21 another location without a current Arkansas retail permit; or
22 (5) Hemp-derived products are possessed, sold, or offered for
23 sale in violation of � 20-56-401 et seq.
24 (c) Property, including money, used to facilitate a violation of this
25 subchapter or the Unfair Cigarette Sales Act, � 4-75-701 et seq., may be
26 seized and forfeited to the state.
27 (d)(1) A prosecuting attorney may institute a civil action against a
28 person who is convicted of a criminal violation under this subchapter or the
29 Unfair Cigarette Sales Act, � 4-75-701 et seq., to obtain a judgment for:
30 (A) Damages in an amount equal to the value of the
31 property, funds, or a monetary instrument involved in the violation;
32 (B) The proceeds acquired by a person involved in the
33 enterprise or by reason of conduct in furtherance of the violation; and
34 (C) Costs incurred by Arkansas Tobacco Control in the
35 investigation, prosecution, and adjudication of criminal, civil, and
36 administrative proceedings.
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1 (2) The standard of proof in an action brought under subdivision
2 (d)(1) of this section is preponderance of the evidence.
3 (e) The following are subject to forfeiture under this section upon
4 order by a circuit court:
5 (1) Tobacco products, vapor products, alternative nicotine
6 products, or e-liquid products distributed, dispensed, or acquired in
7 violation of this subchapter;
8 (2) Raw materials, products, or equipment used or intended for
9 use in manufacturing, compounding, processing, delivering, importing, or
10 exporting a tobacco product, vapor product, alternative nicotine product, or
11 e-liquid product in violation of this subchapter;
12 (3) Property that is used or intended for use as a container for
13 property described in subdivision (e)(1) or subdivision (e)(2) of this
14 section;
15 (4)(A) Except as provided in subdivision (e)(4)(B) of this
16 section, a conveyance, including an aircraft, vehicle, or vessel, that is
17 used or intended to be used to transport or in any manner to facilitate the
18 transportation for the purpose of sale or receipt of property described in
19 subdivision (e)(1) or subdivision (e)(2) of this section.
20 (B)(i) A conveyance used by a person as a common carrier
21 in the transaction of business as a common carrier is not subject to
22 forfeiture under this section unless it appears that the owner or other
23 person in charge of the conveyance is a consenting party or privy to a
24 violation of this subchapter.
25 (ii) A conveyance is not subject to forfeiture under
26 this section by reason of an act or omission established by the owner of the
27 conveyance to have been committed or omitted without his or her knowledge or
28 consent.
29 (C) Upon a showing described in subdivision (e)(4)(B)(i)
30 of this section by the owner or interest holder of a conveyance, the
31 conveyance may nevertheless be forfeited if the prosecuting attorney
32 establishes that the owner or interest holder either knew or should
33 reasonably have known that the conveyance would be used to transport or in
34 any manner to facilitate the transportation for the purpose of sale or
35 receipt of property described in subdivision (e)(1) or subdivision (e)(2) of
36 this section.
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1 (D) A conveyance encumbered by a bona fide security
2 interest is subject to the interest of the secured party if the secured party
3 neither had knowledge of nor consented to an act or omission in violation of
4 this subchapter;
5 (5) A book, record, or research product or material, including a
6 formula, microfilm, tape, or data that is used or intended for use in
7 violation of this subchapter;
8 (6)(A) Except as provided in subdivision (e)(6)(B) of this
9 section, a thing of value, including:
10 (i) Firearms purchased from the proceeds of the sale
11 of untaxed tobacco products, vapor products, alternative nicotine products,
12 or e-liquid products in violation of this subchapter or used in furtherance
13 of a criminal offense as described in � 26-57-245;
14 (ii) Proceeds or profits traceable to an exchange
15 described in subdivision (e)(6)(A)(i) of this section; and
16 (iii) Money, negotiable instruments, or security used
17 or intended to be used to facilitate a violation of this subchapter.
18 (B) Property shall not be forfeited under subdivision
19 (e)(6)(A) of this section to the extent of the interest of an owner by reason
20 of an act or omission established by him or her by a preponderance of the
21 evidence to have been committed or omitted without his or her knowledge or
22 consent;
23 (7)(A) Money, coins, or currency found in close proximity to a
24 forfeitable tobacco product, vapor product, alternative nicotine product, or
25 e-liquid product or a forfeitable record of an importation of a tobacco
26 product, vapor product, alternative nicotine product, or e-liquid product is
27 presumed to be forfeitable under this section.
28 (B) The burden of proof is upon a claimant of the money,
29 coins, or currency to rebut the presumption in subdivision (e)(7)(A) of this
30 section by a preponderance of the evidence; and
31 (8)(A) Except as provided in subdivision (e)(8)(B) of this
32 section, real property if it substantially assisted in, facilitated in any
33 manner, or was used or intended for use in the commission of any act
34 prohibited by this subchapter.
35 (B)(i) Real property is not subject to forfeiture under
36 this section by reason of an act or omission established by the owner of the
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1 real property by a preponderance of the evidence to have been committed or
2 omitted without his or her knowledge or consent.
3 (ii) A forfeiture of real property encumbered by a
4 mortgage or other lien is subject to the interest of the secured party if the
5 secured party neither had knowledge of nor consented to an act or omission in
6 violation of this subchapter.
7 (iii) If the circuit court finds by a preponderance
8 of the evidence that grounds for a forfeiture exist under this section, the
9 court shall enter an order requiring the forfeiture of the real property.
10 (C) Upon an order of forfeiture of real property, the
11 order shall be filed on the day issued and shall have prospective effect.
12 (D) A forfeiture of real property does not affect the
13 title of a bona fide purchaser who purchased the real property before the
14 issuance of the order, and the order has no force or effect on the title of
15 the bona fide purchaser.
16 (E) A lis pendens filed in connection with an action
17 pending under this section that may result in the forfeiture of real property
18 is effective only from the time filed and has no retroactive effect.
19 (f) A tobacco product, vapor product, alternative nicotine product, or
20 e-liquid product that is possessed, transferred, sold, or offered for sale in
21 violation of this subchapter may be seized and immediately forfeited to the
22 state.
23 (g)(1) Property subject to forfeiture under this subchapter may be
24 seized by a law enforcement agent upon process issued by a circuit court
25 having jurisdiction over the property on petition filed by the prosecuting
26 attorney of the judicial circuit.
27 (2) Seizure without process may be made if:
28 (A) The seizure is incident to an arrest or a search under
29 a search warrant or an inspection under the regulatory authority of Arkansas
30 Tobacco Control;
31 (B) The property subject to seizure has been the subject
32 of a prior judgment in favor of the state in a criminal injunction or
33 forfeiture proceeding based upon this subchapter;
34 (C) The seizing law enforcement agency has probable cause
35 to believe that the property is directly or indirectly dangerous to health or
36 safety; or
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1 (D) The seizing law enforcement agency has probable cause
2 to believe that the property was used or is intended to be used in violation
3 of this subchapter.
4 (h)(1) A state or local law enforcement agency shall not transfer
5 property seized by the state or local agency under this section to a federal
6 entity for forfeiture under federal law unless the circuit court having
7 jurisdiction over the property enters an order, upon petition by the
8 prosecuting attorney, authorizing the property to be transferred to the
9 federal entity.
10 (2) The transfer shall not be approved unless it reasonably
11 appears that the activity giving rise to the investigation or seizure
12 involves more than one (1) state or the nature of the investigation or
13 seizure would be better pursued under federal law.
14 (i)(1) Property seized for forfeiture under this section is not
15 subject to replevin but is deemed to be in the custody of the seizing law
16 enforcement agency subject only to an order or decree of the circuit court
17 having jurisdiction over the property seized.
18 (2) Subject to a need to retain the property as evidence, when
19 property is seized under this subchapter, the seizing law enforcement agency
20 may:
21 (A) Remove the property to a place designated by the
22 circuit court;
23 (B) Place the property under constructive seizure, posting
24 notice of pending forfeiture on it by:
25 (i) Giving notice of pending forfeiture to its
26 owners and interest holders; or
27 (ii) Filing notice of pending forfeiture in an
28 appropriate public record relating to the property;
29 (C) Remove the property to a storage area for safekeeping
30 or, if the property is a negotiable instrument or money or is not needed for
31 evidentiary purposes, deposit it into an interest-bearing account; or
32 (D) Provide for another agency or custodian, including an
33 owner, secured party, mortgagee, or lienholder, to take custody of the
34 property and service, maintain, and operate it as reasonably necessary to
35 maintain its value in an appropriate location within the jurisdiction of the
36 court.
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1 (3)(A) In case of transfer of property, a transfer receipt shall
2 be prepared by the transferring agency.
3 (B) The transfer receipt shall:
4 (i) List a detailed and complete description of the
5 property being transferred;
6 (ii) State to whom the property is being transferred
7 and the source or authorization for the transfer; and
8 (iii) Be signed by both the transferor and the
9 transferee.
10 (C) Both transferor and transferee shall maintain a copy
11 of the transfer receipt.
12 (4) A person who acts as custodian of property under this
13 section is not liable to any person on account of an act done in a reasonable
14 manner in compliance with an order under this subchapter.
15 (j)(1) Property seized by a state or local law enforcement officer
16 under this section who is detached to, deputized or commissioned by, or
17 working in conjunction with a federal agency remains subject to this section.
18 (2)(A) If property is seized for forfeiture by a law enforcement
19 agency under this section, the seizing law enforcement officer shall prepare
20 and sign a confiscation report.
21 (B)(i) The party from whom the property is seized shall
22 also sign the confiscation report if present and shall immediately receive a
23 copy of the confiscation report.
24 (ii) If the party refuses to sign the confiscation
25 report, the confiscation report shall be signed by one (1) additional law
26 enforcement officer, stating that the party refused to sign the confiscation
27 report.
28 (C) The original confiscation report shall be:
29 (i) Filed with the seizing law enforcement agency
30 within forty-eight (48) hours after the seizure; and
31 (ii) Maintained in a separate file.
32 (D) One (1) copy of the confiscation report shall be
33 retained by the seizing law enforcement officer.
34 (3) The confiscation report shall contain the following
35 information:
36 (A) A detailed description of the property seized
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1 including serial or model numbers and odometer or hour reading of vehicles or
2 equipment;
3 (B) The date of seizure;
4 (C) The name and address of the party from whom the
5 property was seized;
6 (D) The reason for the seizure;
7 (E) The location where the property will be held;
8 (F) The seizing law enforcement officer's name; and
9 (G) A signed statement by the seizing law enforcement
10 officer stating that the confiscation report is true and complete.
11 (4) Within three (3) business days after receiving the
12 confiscation report, the seizing law enforcement agency shall forward a copy
13 of the confiscation report to the prosecuting attorney for the district where
14 the property was seized and to the director.
15 (5)(A) Arkansas Legislative Audit shall notify the director and
16 a circuit court in the county of a law enforcement agency, prosecuting
17 attorney, or other public entity that the law enforcement agency, prosecuting
18 attorney, or public entity is ineligible to receive forfeited funds,
19 forfeited property, or grants from the council, if Arkansas Legislative Audit
20 determines by its own investigation or upon written notice from the director
21 that:
22 (i) The law enforcement agency failed to complete
23 and file the confiscation reports as required by this section;
24 (ii) The law enforcement agency, prosecuting
25 attorney, or public entity has not properly accounted for the seized
26 property; or
27 (iii) The prosecuting attorney has failed to comply
28 with the notification requirement set forth in subdivision (m)(2) of this
29 section.
30 (B) After the notice, the circuit court shall not issue an
31 order distributing seized property to that law enforcement agency,
32 prosecuting attorney, or public entity, nor shall a grant be awarded by the
33 council to that law enforcement agency, prosecuting attorney, or public
34 entity until:
35 (i) The appropriate officials of the law enforcement
36 agency, prosecuting attorney, or public entity have appeared before the
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1 Legislative Joint Auditing Committee; and
2 (ii) The Legislative Joint Auditing Committee has
3 adopted a motion authorizing subsequent transfers of forfeited property to
4 the law enforcement agency, prosecuting attorney, or public entity.
5 (C)(i) If a law enforcement agency, prosecuting attorney,
6 or other public entity is ineligible to receive forfeited property, the
7 circuit court shall order money that would have been distributed to that law
8 enforcement agency, prosecuting attorney, or public entity to be transmitted
9 to the Treasurer of State for deposit into the Special State Assets
10 Forfeiture Fund.
11 (ii) If the property is not cash, the circuit court
12 shall order the property converted to cash under this section and the
13 proceeds transmitted to the Treasurer of State for deposit into the Special
14 State Assets Forfeiture Fund.
15 (D) Moneys deposited into the Special State Assets
16 Forfeiture Fund are not subject to recovery or retrieval by an ineligible law
17 enforcement agency, prosecuting attorney, or other public entity.
18 (6) The director shall establish by rule a standardized
19 confiscation report form to be used by all law enforcement agencies, with
20 specific instructions and guidelines concerning the nature and dollar value
21 of all property, including firearms, to be included in the confiscation
22 report and forwarded to the office of the local prosecuting attorney and the
23 director under this subsection.
24 (k)(1)(A) The prosecuting attorney shall initiate forfeiture
25 proceedings by filing a complaint with the circuit clerk of the county where
26 the property was seized and by serving the complaint on all known owners and
27 interest holders of the seized property in accordance with the Arkansas Rules
28 of Civil Procedure.
29 (B) The complaint may be based on in rem or in personam
30 jurisdiction but shall not be filed to avoid the distribution requirements
31 set forth in subdivision (l)(1) of this section.
32 (C) The prosecuting attorney shall mail a copy of the
33 complaint to the director within five (5) calendar days after filing the
34 complaint.
35 (2)(A) The complaint shall include a copy of the confiscation
36 report and shall be filed within sixty (60) days after receiving a copy of
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1 the confiscation report from the seizing law enforcement agency.
2 (B) In a case involving real property, the complaint shall
3 be filed within sixty (60) days of the defendant's conviction on the charge
4 giving rise to the forfeiture.
5 (3)(A) The prosecuting attorney may file the complaint after the
6 expiration of the time only if the complaint is accompanied by a statement of
7 good cause for the late filing.
8 (B) However, the complaint shall not be filed more than
9 one hundred twenty (120) days after either the date of the seizure or, in a
10 case involving real property, the date of the defendant's conviction.
11 (C)(i) If the circuit court determines that good cause has
12 not been established, the circuit court shall order that the seized property
13 be returned to the owner or interest holder.
14 (ii) In addition, items seized but not subject to
15 forfeiture under this section or subject to disposition under law or the
16 Arkansas Rules of Criminal Procedure may be ordered returned to the owner or
17 interest holder.
18 (iii) If the owner or interest holder cannot be
19 determined, the court may order disposition of the property.
20 (4) Within the time set forth in the Arkansas Rules of Civil
21 Procedure, the owner or interest holder of the seized property shall file
22 with the circuit clerk a verified answer to the complaint that shall include:
23 (A) A statement describing the seized property and the
24 owner's interest or interest holder's interest in the seized property with
25 supporting documents to establish the owner's interest or interest holder's
26 interest;
27 (B) A certification by the owner or interest holder
28 stating that he or she has read the document and that it has not been filed
29 for an improper purpose;
30 (C) A statement setting forth any defense to forfeiture;
31 and
32 (D) The address at which the owner or interest holder will
33 accept mail.
34 (5)(A) If the owner or interest holder fails to file an answer,
35 the prosecuting attorney may move for default judgment under the Arkansas
36 Rules of Civil Procedure.
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1 (B)(i) If a timely answer has been filed, the prosecuting
2 attorney has the burden of proving by a preponderance of the evidence that
3 the seized property should be forfeited.
4 (ii) After the prosecuting attorney has presented
5 proof, an owner or interest holder of the property seized is allowed to
6 present evidence showing why the seized property should not be forfeited.
7 (iii) If the circuit court determines that grounds
8 for forfeiting the seized property exist and that a defense to forfeiture has
9 not been established by the owner or interest holder, the circuit court shall
10 enter an order under this section. However, if the circuit court determines
11 either that the prosecuting attorney has failed to establish that grounds for
12 forfeiting the seized property exist or that the owner or interest holder has
13 established a defense to forfeiture, the court shall order that the seized
14 property be immediately returned to the owner or interest holder.
15 (l)(1) If the circuit court having jurisdiction over the seized
16 property finds upon a hearing by a preponderance of the evidence that grounds
17 for a forfeiture exist under this subchapter, the circuit court shall enter
18 an order:
19 (A) To permit the law enforcement agency or prosecuting
20 attorney to retain the seized property for law enforcement or prosecutorial
21 purposes, subject to the following provisions:
22 (i)(a) Seized property may not be retained for
23 official use for more than three (3) years, unless the circuit court finds
24 that the seized property has been used for law enforcement or prosecutorial
25 purposes and authorizes continued use for those purposes on an annual basis.
26 (b) At the end of the retention period, the
27 seized property shall be sold and eighty percent (80%) of the proceeds shall
28 be deposited into the tobacco control fund of the retaining law enforcement
29 agency or prosecuting attorney, and twenty percent (20%) of the proceeds
30 shall be deposited into the State Treasury as special revenues to be credited
31 to the Special State Assets Forfeiture Fund.
32 (c) The retaining law enforcement agency or
33 prosecuting attorney may sell the retained seized property during the time
34 allowed for retention. However, the proceeds of the sale shall be distributed
35 as set forth in subdivision (l)(1)(A)(i)(b) of this section;
36 (ii) If the circuit court determines that retained
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1 seized property has been used for personal use or by non-law enforcement
2 personnel for non-law enforcement purposes, the circuit court shall order the
3 seized property to be sold under � 5-5-101(e) and (f), and the proceeds shall
4 be deposited into the State Treasury as special revenues to be credited to
5 the Special State Assets Forfeiture Fund;
6 (iii)(a) A law enforcement agency may use
7 forfeited property or money if the circuit court's order specifies that the
8 forfeited property or money is forfeited to the prosecuting attorney,
9 sheriff, chief of police, Division of Arkansas State Police, director, or
10 Arkansas Highway Police Division of the Arkansas Department of
11 Transportation.
12 (b) After the order, the prosecuting attorney,
13 sheriff, chief of police, Division of Arkansas State Police, director, or
14 Arkansas Highway Police Division of the Arkansas Department of Transportation
15 shall maintain an inventory of the forfeited property or money, be
16 accountable for the forfeited property or money, and be subject to
17 subdivision (j)(5) of this section with respect to the forfeited property or
18 money;
19 (iv)(a) An aircraft is forfeited to the office
20 of the director and may be used only for tobacco, vapor product, alternative
21 nicotine product, or e-liquid product smuggling interdiction efforts within
22 the discretion of the director.
23 (b) However, if the director determines that
24 the aircraft should be sold, the proceeds of the sale shall be distributed as
25 set forth in subdivision (l)(1)(A)(i)(b) of this section;
26 (v) A firearm not retained for official use shall be
27 disposed of in accordance with state and federal law; and
28 (vi) A tobacco product, vapor product, alternative
29 nicotine product, or e-liquid product shall be destroyed pursuant to a court
30 order;
31 (B)(i) To sell seized property that is not required by law
32 to be destroyed and that is not harmful to the public.
33 (ii) Seized property described in subdivision
34 (l)(1)(B)(i) of this section shall be sold at a public sale by the retaining
35 law enforcement agency or prosecuting attorney under � 5-5-101(e) and (f); or
36 (C) To transfer a motor vehicle to a school district for
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1 use in a driver education course.
2 (2) Disposition of forfeited property under this subsection is
3 subject to the need to retain the forfeited property as evidence in any
4 related proceeding.
5 (3) Within three (3) business days after the entry of the order,
6 the circuit clerk shall forward to the director copies of the confiscation
7 report, the circuit court's order, and other documentation detailing the
8 disposition of the seized property.
9 (m)(1)(A) Subject to subdivision (j)(5) of this section, the proceeds
10 of sales conducted under this section and moneys forfeited or obtained by
11 judgment or settlement under this subchapter shall be deposited and
12 distributed in the manner provided in this subsection.
13 (B) Moneys received from a federal forfeiture for a
14 violation of this subchapter shall be deposited and distributed under this
15 section.
16 (2)(A) The proceeds of a sale and moneys forfeited or obtained
17 by judgment or settlement under this subchapter shall be deposited into the
18 asset forfeiture fund of the prosecuting attorney and is subject to the
19 following provisions:
20 (i) If, during a calendar year, the aggregate amount
21 of moneys deposited into the asset forfeiture fund exceeds twenty thousand
22 dollars ($20,000) per county, the prosecuting attorney, within fourteen (14)
23 days after that time, shall notify the circuit judges in the judicial
24 district and the director;
25 (ii) Subsequent to the notification set forth in this
26 section, twenty percent (20%) of the proceeds of an additional sale and
27 additional moneys forfeited or obtained by judgment or settlement under this
28 subchapter in the same calendar year shall be deposited into the State
29 Treasury as special revenues to be credited to the Special State Assets
30 Forfeiture Fund, and the remainder shall be deposited into the asset
31 forfeiture fund of the prosecuting attorney;
32 (iii) Failure by the prosecuting attorney to comply
33 with the notification requirement set forth in this section renders the
34 prosecuting attorney and an entity eligible to receive forfeited moneys or
35 property from the prosecuting attorney ineligible to receive forfeited moneys
36 or property, except as provided in this section; and
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1 (iv) Twenty percent (20%) of moneys in excess of
2 twenty thousand dollars ($20,000) that have been retained but not reported as
3 required by this section are subject to recovery for deposit into the Special
4 State Assets Forfeiture Fund.
5 (B) The prosecuting attorney shall administer expenditures
6 from the asset forfeiture fund, which is subject to audit by Arkansas
7 Legislative Audit. Moneys distributed from the asset forfeiture fund shall be
8 used only for law enforcement and prosecutorial purposes. Moneys in the asset
9 forfeiture fund shall be distributed in the following order:
10 (i) For the satisfaction of a bona fide security
11 interest or lien;
12 (ii) For payment of a proper expense of the
13 proceeding for forfeiture and sale, including expenses of seizure,
14 maintenance of custody, advertising, and court costs;
15 (iii) Any balance under three hundred fifty thousand
16 dollars ($350,000) shall be distributed proportionally so as to reflect
17 generally the contribution of the appropriate local or state law enforcement
18 or prosecutorial agency's participation in any activity that led to the
19 seizure or forfeiture of the property or deposit of moneys under this
20 subchapter; and
21 (iv) Any balance over three hundred fifty thousand
22 dollars ($350,000) shall be forwarded to the director to be transferred to
23 the State Treasury for deposit into the Special State Assets Forfeiture Fund
24 for distribution under this section.
25 (C)(i) For a forfeiture in an amount greater than three
26 hundred fifty thousand dollars ($350,000) from which expenses are paid for a
27 proceeding for forfeiture and sale under this section, an itemized accounting
28 of the expenses shall be delivered to the director within ten (10) calendar
29 days after the distribution of the funds.
30 (ii) The itemized accounting shall include the
31 expenses paid, to whom paid, and for what purposes the expenses were paid.
32 (3)(A) Moneys received by a prosecuting attorney or law
33 enforcement agency from a federal forfeiture for a violation of this
34 subchapter shall be deposited and maintained in a separate account.
35 (B) However, a balance over three hundred fifty thousand
36 dollars ($350,000) shall be distributed as required under this section.
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1 (4) Other moneys shall not be maintained in the account except
2 for interest income generated by the account.
3 (5) Moneys in the account shall only be used for law enforcement
4 and prosecutorial purposes consistent with governing federal law.
5 (6) The account is subject to audit by Arkansas Legislative
6 Audit.
7 (7) A balance over three hundred fifty thousand dollars
8 ($350,000) shall be transferred to the State Treasury for deposit into the
9 Special State Assets Forfeiture Fund in which it shall be maintained
10 separately and distributed consistently with governing federal law and upon
11 the advice of the director.
12 (n) In personam jurisdiction may be based on a person's presence in
13 the state or on his or her conduct in the state, as set out in � 16-4-101(C),
14 and is subject to the following additional provisions:
15 (1) A temporary restraining order under this section may be
16 entered ex parte on application of the state upon a showing that:
17 (A) There is probable cause to believe that the property
18 with respect to which the order is sought is subject to forfeiture under this
19 section; and
20 (B) Notice of the action would jeopardize the availability
21 of the property for forfeiture;
22 (2)(A) Notice of the entry of a temporary restraining order and
23 an opportunity for hearing shall be afforded to a person known to have an
24 interest in the property.
25 (B) The hearing shall be held at the earliest possible
26 date consistent with Rule 65 of the Arkansas Rules of Civil Procedure and is
27 limited to the issues of whether:
28 (i) There is a probability that the state will
29 prevail on the issue of forfeiture and that failure to enter the temporary
30 restraining order will result in the property's being destroyed, conveyed,
31 alienated, encumbered, disposed of, received, removed from the jurisdiction
32 of the circuit court, concealed, or otherwise made unavailable for
33 forfeiture; and
34 (ii) The need to preserve the availability of
35 property through the entry of the requested temporary restraining order
36 outweighs the hardship on an owner or interest holder against whom the
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1 temporary restraining order is to be entered;
2 (3) The state has the burden of proof by a preponderance of the
3 evidence to show that the defendant's property is subject to forfeiture;
4 (4)(A) On a determination of liability of a person for conduct
5 giving rise to forfeiture under this section, the circuit court shall enter a
6 judgment of forfeiture of the property subject to forfeiture as alleged in
7 the complaint and may authorize the prosecuting attorney or a law enforcement
8 officer to seize property subject to forfeiture under this section not
9 previously seized or not then under seizure.
10 (B) The order of forfeiture shall be consistent with
11 subsection (l) of this section.
12 (C) In connection with the judgment, on application of the
13 state, the circuit court may enter an appropriate order to protect the
14 interest of the state in property ordered forfeited; and
15 (5) Subsequent to the finding of liability and order of
16 forfeiture, the following procedures apply:
17 (A) The attorney for the state shall give notice of
18 pending forfeiture in the manner provided in Rule 4 of the Arkansas Rules of
19 Civil Procedure to an owner or interest holder who has not previously been
20 given notice;
21 (B) An owner of or interest holder in property that has
22 been ordered forfeited and whose claim is not precluded may file a claim
23 within thirty (30) days after initial notice of pending forfeiture or after
24 notice under Rule 4 of the Arkansas Rules of Civil Procedure, whichever is
25 earlier; and
26 (C) The circuit court may amend the in personam order of
27 forfeiture if the circuit court determines that a claimant has established
28 that he or she has an interest in the property and that the interest is
29 exempt under this section.
30 (o) The circuit court shall order the forfeiture of other property of
31 a claimant or defendant up to the value of the claimant's or defendant's
32 property found by the circuit court to be subject to forfeiture under this
33 section if any of the forfeitable property had remained under the control or
34 custody of the claimant or defendant and:
35 (1) Cannot be located;
36 (2) Was transferred or conveyed to, sold to, or deposited with a
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1 third party;
2 (3) Is beyond the jurisdiction of the circuit court;
3 (4) Was substantially diminished in value while not in the
4 actual physical custody of the seizing law enforcement agency;
5 (5) Was commingled with other property that cannot be divided
6 without difficulty; or
7 (6) Is subject to interest exempted from forfeiture under this
8 subchapter.
9 (p)(1) There is created on the books of law enforcement agencies and
10 prosecuting attorneys a tobacco control fund.
11 (2) The fund shall consist of moneys obtained under this section
12 and other revenue as may be provided by law or ordinance.
13 (3) Moneys in the tobacco control fund shall be appropriated on
14 a continuing basis and are not subject to the Revenue Stabilization Law, �
15 19-5-101 et seq.
16 (4)(A) The fund shall be used for law enforcement and
17 prosecutorial purposes.
18 (B) Each prosecuting attorney shall submit to the Director
19 of Arkansas Tobacco Control on or before June 30 of each year a report
20 detailing moneys received and expenditures made from the tobacco control fund
21 during the preceding twelve-month period.
22 (5) The law enforcement agencies and prosecuting attorneys shall
23 submit to the director on or before June 30 of each year a report detailing
24 any moneys received and expenditures made from the tobacco control fund
25 during the preceding twelve-month period.
26 (6) Moneys from the tobacco control fund may not supplant other
27 local, state, or federal funds.
28 (7) The tobacco control fund is subject to audit by Arkansas
29 Legislative Audit.
30
31 SECTION 10. Arkansas Code � 26-57-255(g)(3), effective until the
32 contingency in Acts 2023, No. 629, � 17, is met, concerning the powers and
33 duties of the Arkansas Tobacco Control Board, is amended to read as follows:
34 (3)(A) Conduct public hearings when appropriate regarding a
35 permit authorized under this subchapter or in violation of this subchapter,
36 the Unfair Cigarette Sales Act, � 4-75-701 et seq., � 5-27-227, � 20-56-501
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1 et seq., or any other federal, state, or local statute, ordinance, rule, or
2 regulation concerning the sale of tobacco products, vapor products,
3 alternative nicotine products, or e-liquid products to minors, or the rules
4 promulgated by Arkansas Tobacco Control.
5 (B) After notice and hearing held in accordance with the
6 Arkansas Administrative Procedure Act, � 25-15-201 et seq., if the board
7 finds a violation of this subchapter, the Unfair Cigarette Sales Act, � 4-75-
8 701 et seq., � 20-56-501 et seq., or the rules promulgated by Arkansas
9 Tobacco Control, the board may suspend or revoke any or all permits issued by
10 the director to any person.
11 (C) The board may levy a civil penalty in an amount not to
12 exceed five thousand dollars ($5,000) one thousand dollars ($1,000) for each
13 violation against a person found to be in violation of this subchapter, the
14 Unfair Cigarette Sales Act, � 4-75-701 et seq., � 20-56-501 et seq., or the
15 rules promulgated by Arkansas Tobacco Control.
16 (D) Each day of a violation is a separate violation.
17 (E) A civil penalty under subdivision (g)(3)(C) of this
18 section is in addition to any penalties levied by the board under � 26-57-
19 248.
20 (F) In conducting a hearing under this subdivision (g)(3),
21 the board may examine or cause to be examined under oath any witness and the
22 books and records of a permitted person or other person;
23
24 SECTION 11. Arkansas Code � 26-57-255, effective if the contingency in
25 Acts 2023, No. 629, � 17, is met, is repealed.
26 26-57-255. Arkansas Tobacco Control Board -- Creation -- Definition.
27 (a) There is created the Arkansas Tobacco Control Board to consist of
28 the following eight (8) members appointed by the Governor:
29 (1) Two (2) members of the board shall be wholesalers of tobacco
30 products, vapor products, alternative nicotine products, or e-liquid
31 products;
32 (2) Two (2) members of the board shall be retailers of tobacco
33 products, vapor products, alternative nicotine products, or e-liquid
34 products; and
35 (3) Four (4) members of the board shall be members of the public
36 at large who are not public employees or officials, at least one (1) of whom
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1 shall be an African-American, and two (2) of whom shall be appointed by the
2 Governor after consulting the Arkansas Medical Society, Inc. and subject to
3 confirmation by the Senate.
4 (b) The Governor shall designate which member of the board shall act
5 as chair and that person shall serve as chair for two (2) years unless his or
6 her membership on the board ceases prior to the end of the two-year period.
7 (c)(1) All members of the board shall be residents of the State of
8 Arkansas and confirmed by the Senate.
9 (2) The term of office shall be five (5) years.
10 (d)(1) A minimum of five (5) members is required for a quorum.
11 (2)(A) All action by the board shall be by a majority vote of
12 the board members present at the regular or special meeting, and the board
13 may take no official action in connection with a matter except at a regular
14 or special meeting.
15 (B) In the event of a tie vote of the members of the
16 board, the Director of Arkansas Tobacco Control may cast the deciding vote.
17 (e) A person who is not a citizen of the United States and who has not
18 resided in the State of Arkansas for at least two (2) consecutive years
19 immediately preceding the date of appointment shall not be appointed to the
20 board.
21 (f) Each member of the board and the director shall take and subscribe
22 to an oath that he or she will support and enforce this subchapter, the
23 tobacco control laws of this state, the Arkansas Constitution, and the United
24 States Constitution.
25 (g) The board shall:
26 (1) Act as the adjudicatory body for Arkansas Tobacco Control;
27 (2) Have responsibility for approving the issuance, suspension,
28 and revocation of the permits enumerated in � 26-57-219;
29 (3)(A) Conduct public hearings when appropriate regarding a
30 permit authorized under this subchapter or in violation of this subchapter,
31 the Unfair Cigarette Sales Act, � 4-75-701 et seq., � 5-27-227, � 20-56-401
32 et seq., or any other federal, state, or local statute, ordinance, rule, or
33 regulation concerning the sale of tobacco products, vapor products,
34 alternative nicotine products, e-liquid products, or hemp-derived products to
35 minors or the rules promulgated by Arkansas Tobacco Control.
36 (B) After notice and hearing held in accordance with the
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1 Arkansas Administrative Procedure Act, � 25-15-201 et seq., if the board
2 finds a violation of this subchapter, the Unfair Cigarette Sales Act, � 4-75-
3 701 et seq., � 20-56-401 et seq., or the rules promulgated by Arkansas
4 Tobacco Control, the board may suspend or revoke any or all permits issued by
5 the director to any person.
6 (C) The board may levy a civil penalty in an amount not to
7 exceed five thousand dollars ($5,000) for each violation against a person
8 found to be in violation of this subchapter, the Unfair Cigarette Sales Act,
9 � 4-75-701 et seq., � 20-56-401 et seq., or the rules promulgated by Arkansas
10 Tobacco Control.
11 (D) Each day of a violation is a separate violation.
12 (E) A civil penalty under subdivision (g)(3)(C) of this
13 section is in addition to any penalties levied by the board under � 26-57-
14 248.
15 (F) In conducting a hearing under this subdivision (g)(3),
16 the board may examine or cause to be examined under oath any witness and the
17 books and records of a permitted person or other person;
18 (4) When requested by the written petition of at least three (3)
19 interested parties, conduct public hearings to receive testimony regarding
20 the facts relevant to the issuance of a permit under this subchapter; and
21 (5)(A) Not have authority in criminal prosecutions or the
22 assessment or collection of any taxes.
23 (B) However, the board shall refuse to approve the
24 issuance or renewal of a permit issued by the director for the failure to pay
25 taxes or fees imposed on tobacco products or any permit fees imposed under
26 this subchapter or any other state or local taxes.
27 (h)(1) The board may assess penalties for a violation of � 5-27-227
28 according to the following schedule:
29 (A) For a first violation within a forty-eight-month
30 period, a civil penalty not to exceed two hundred fifty dollars ($250);
31 (B) For a second violation within a forty-eight-month
32 period, a civil penalty not to exceed five hundred dollars ($500) and
33 suspension of the permit enumerated in � 26-57-219 for a period not to exceed
34 two (2) days;
35 (C) For a third violation within a forty-eight-month
36 period, a civil penalty not to exceed one thousand dollars ($1,000) and
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1 suspension of the permit enumerated in � 26-57-219 for a period not to exceed
2 seven (7) days;
3 (D) For a fourth or subsequent violation within a forty-
4 eight-month period, a civil penalty not to exceed two thousand dollars
5 ($2,000) and suspension of the permit enumerated in � 26-57-219 for a period
6 not to exceed fourteen (14) days; and
7 (E) For a fifth or subsequent violation within a forty-
8 eight-month period, in addition to the other penalties provided under this
9 subsection, the permit enumerated in � 26-57-219 may be revoked.
10 (2)(A) A penalty under this subsection shall not be imposed on a
11 retailer or an agent or employee of a retailer who can establish an
12 affirmative defense that before the date of the violation the retailer or
13 agent or employee of the retailer furnishing the tobacco products, vapor
14 products, alternative nicotine products, e-liquid products, or cigarette
15 papers reasonably relied on proof of age that identified the person receiving
16 the tobacco products, vapor products, alternative nicotine products, e-liquid
17 products, or cigarette papers as not being a minor.
18 (B) As used in this subsection, "proof of age" means valid
19 documentation issued by a governmental agency containing the person's
20 photograph, date of birth, and an expiration date.
21 (3)(A) For a corporation or business with more than one (1)
22 retail location, to determine the number of accumulated violations for
23 purposes of the penalty schedule stated in this subsection, violations of �
24 5-27-227 by one (1) retail location shall not be accumulated against other
25 retail locations of that same corporation or business.
26 (B) For a retail location, for purposes of the penalty
27 schedule stated in this subsection, violations accumulated and assessed
28 against a prior owner of the retail location shall not be accumulated against
29 a new owner of the same retail location unless approved by the board.
30
31 SECTION 12. Arkansas Code � 26-57-256(a)(2) and (3), effective until
32 the contingency in Acts 2023, No. 629, � 17, is met, concerning the powers of
33 Arkansas Tobacco Control, are amended to read as follows:
34 (2)(A) Receive applications for and issue, refuse, suspend, and
35 revoke permits listed in � 26-57-219 and � 20-56-501 et seq.
36 (B) Arkansas Tobacco Control shall refuse to issue or
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1 renew any permits issued by the Director of Arkansas Tobacco Control for the
2 failure to pay:
3 (i) Any applicable taxes or fees imposed on tobacco
4 products,;
5 (ii) Permit permit fees imposed under this
6 subchapter and � 20-56-501 et seq.;, or
7 (iii) Any any other state or local taxes;
8 (3) Prescribe forms of applications for permits under this
9 subchapter and � 20-56-501 et seq;
10
11 SECTION 13. Arkansas Code � 26-57-256, effective if the contingency in
12 Acts 2023, No. 629, � 17, is met, is repealed.
13 26-57-256. Arkansas Tobacco Control -- Powers.
14 (a) Arkansas Tobacco Control shall:
15 (1) Promulgate rules for the proper enforcement and
16 implementation of this subchapter and the Unfair Cigarette Sales Act, � 4-75-
17 701 et seq.;
18 (2)(A) Receive applications for and issue, refuse, suspend, and
19 revoke permits listed in � 26-57-219 and � 20-56-401 et seq.
20 (B) Arkansas Tobacco Control shall refuse to issue or
21 renew any permits issued by the Director of Arkansas Tobacco Control for the
22 failure to pay:
23 (i) Any applicable taxes or fees imposed on tobacco
24 products;
25 (ii) Permit fees imposed under this subchapter or on
26 hemp-derived products under � 20-56-401 et seq.; or
27 (iii) Other state or local taxes;
28 (3) Prescribe forms of applications for permits under this
29 subchapter and � 20-56-401 et seq.;
30 (4)(A) Cooperate with the Revenue Division of the Department of
31 Finance and Administration in the enforcement of the tax laws affecting the
32 sale of tobacco products in this state and in the enforcement of all other
33 state and local tax laws.
34 (B) To facilitate efforts to cooperate with the division
35 concerning the enforcement of all other state and local tax laws, Arkansas
36 Tobacco Control shall immediately require that the following additional
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1 information be provided by all applicants for permit issuance or renewal:
2 (i) Federal tax identification numbers issued by the
3 Internal Revenue Service;
4 (ii) Social Security numbers; and
5 (iii) State sales tax account numbers assigned by the
6 Department of Finance and Administration, if applicable.
7 (C)(i) Each year Arkansas Tobacco Control shall provide a
8 list of all applicants for the issuance or renewal of all tobacco products,
9 vapor product, alternative nicotine product, or e-liquid product permits to
10 the Secretary of the Department of Finance and Administration.
11 (ii) This list shall contain the identifying
12 information required by subdivision (a)(4)(B) of this section as well as the
13 name of the permittee and the permittee's current business address;
14 (5)(A) Collect civil penalties assessed by the Arkansas Tobacco
15 Control Board under � 26-57-255.
16 (B) Unless the civil penalty is paid within fifteen (15)
17 days following the date for an appeal from the order, the director shall have
18 the power to institute a civil action in the Pulaski County Circuit Court to
19 recover the civil penalties assessed; and
20 (6)(A) Provide notice to the retail location of an alleged
21 violation of � 5-27-227 within ten (10) days of the alleged violation.
22 (B) The notice required under subdivision (a)(6)(A) of
23 this section shall contain the date and time of the alleged violation.
24 (b) Any tobacco products, vapor products, alternative nicotine
25 products, e-liquid products, hemp-derived products as defined in � 20-56-402,
26 or cigarette papers found in the possession of a minor may be confiscated and
27 destroyed.
28 (c) Except as otherwise provided by law, the penalties collected under
29 this section shall be deposited into the State Treasury.
30
31 SECTION 14. Arkansas Code � 26-57-256(b), effective until the
32 contingency in Acts 2023, No. 629, � 17, is met, concerning the powers of
33 Arkansas Tobacco Control, is amended to read as follows:
34 (b) Any tobacco products, vapor products, alternative nicotine
35 products, e-liquid products, hemp products as defined in � 20-56-501, or
36 cigarette papers found in the possession of a minor may be confiscated and
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1 destroyed.
2
3 SECTION 15. Uncodified Section 17 of Acts 2023, No. 629, which
4 reflects changes to the references to "Sections 6-13", "Sections 6-14", and
5 "Sections 2-5" in Acts 2023, No. 629, �� 16 and 17 made by the Arkansas Code
6 Revision Commission, is repealed.
7 SECTION 17. Contingent effective date.
8 Sections 6-14 [8-16] of this act shall become effective only upon the
9 certification of the Arkansas Attorney General that the State of Arkansas is
10 currently enjoined from enforcing Sections 2-5 [2-7] of this act relating to
11 delta-8 tetrahydrocannabinol and delta-10 tetrahyrdocannabinol, but no
12 earlier than August 1, 2023.
13
14 SECTION 16. Contingent effective date based on litigation.
15 (a) This act shall be effective one hundred twenty (120) days after a
16 final judgement in the case of Bio Gen LLC, et al v. Sanders, et al, 0860-4:
17 4:23-cv-00718-BRW, and any subsequent dockets or actions concerning Acts
18 2023, No. 629, only if, and to the extent that, that the final judgement does
19 not uphold the legality of Acts 2023, No. 629.
20 (b) If the final judgment in the case referenced in subsection (a) of
21 this section does not uphold the legality of Acts 2023, No. 629, this act
22 shall take effect as stated in subsection (a) of this section.
23 (c) If the final judgement in the case referenced in subsection (a) of
24 this section does uphold the legality of Acts 2023, No. 629, this act shall
25 be repealed in its entirety and may be removed by the Code Revisor.
26
27 /s/J. Bryant
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47 03-19-2025 09:38:21 JMB314Every fact on this page links to its source, starting with the official bill record.