The House and Senate Conference Committee version of the transportation bill containing the RYO amendment must be voted on by both the full House and the full Senate this week.
A new RYO machine amendment has been included in a Congressional transportation bill, the National Association of Tobacco Outlets (NATO) reported.
The U.S. House and U.S. Senate have issued a conference report, which is an agreement on legislation that is negotiated between the House and Senate through conference committees. The conference report regards a transportation bill that includes a provision amending the current federal definition of a “manufacturer of tobacco products” to include persons who, for business purposes, make available to consumers a machine that is capable of making cigarettes, cigars or other tobacco products.
Both the U.S. House and the U.S. Senate passed transportation bills that included different provisions, including different amendment language regarding commercial roll-your-own cigarette machines. The two versions of the transportation funding bills were assigned to a House-Senate Conference Committee to work out the differences between the two bills.
NATO reported that the final version of the transportation bill approved by the House and Senate Conference Committee includes a section on commercial roll-your-own machine operators and amends Section 5702(d) of the Internal Revenue Code as follows:
26 United States Code Section 5702(d): “Manufacturer of tobacco products” means any person who manufactures cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco, except that such term shall not include—
(1) a person who produces cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco solely for the person’s own personal consumption or use, and
(2) a proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse.
Such term shall include any person who for commercial purposes makes available for consumer use (including such consumer’s personal consumption or use under paragraph (1)) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal as defined by subsection (j) with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer’s personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.
In the event that the House and Senate Conference Committee version of the bill is passed and signed into law by the President, then operators of commercial roll-your-own machines will need to comply with the applicable federal laws pertaining to cigarette manufacturers as administered and enforced by the Alcohol, Tobacco Tax and Trade Bureau (TTB) and the Internal Revenue Service. The operators would also need to comply with the Surgeon General warning label requirements for cigarettes and all applicable regulations pertaining to cigarettes as administered by the U.S. Food and Drug Administration (FDA).
Retailers that sell personal roll-your-own machines to consumers for use at home are not considered manufacturers of tobacco products and would not be subject to the laws governing manufacturers.
The federal laws that would need to be complied with by commercial roll-your-own machine operators include, but are not limited to, the following:
1. Every person, before commencing business as a manufacturer of tobacco products, must apply to the TTB for a permit to engage in such business and file a bond.
2. Manufacturers of tobacco products are required to keep records, submit reports, and take inventories of tobacco products.
3. The tobacco products that are manufactured must be put up in packages that bear required marks and labels.
4. The federal cigarette tax of $1.01 per pack must be paid on manufactured cigarettes.
5. The Surgeon General cigarette health warnings must be affixed to cigarette packaging.
6. The FDA rules on cigarettes including minimum package size, the prohibition of flavored cigarettes, and cigarette sampling must be followed.
The House and Senate Conference Committee version of the transportation bill needs to be voted on by both the full House and the full Senate this week because the federal government’s authority to spend funds on roads, bridges and transit systems will expire this Saturday, June 30 in the event the bill is not passed and sent to the President for his signature.