Senate committee advances bill to regulate vaping products, adds tax and ID rules; amendment sends revenue to general fund

Chairman Yeager moved Senate Bill 763, a measure aimed at tightening sale and oversight of vaping products, and the Senate Finance, Ways and Means Committee voted to recommend the bill to the calendar committee after adopting an amendment that directs revenues to the state general fund.

The bill, as described by Chairman Yeager, would strengthen identification requirements for vaping products to match the checks used for alcohol and tobacco, require manufacturers and distributors to post product information to a Department of Revenue website, and impose a modest tax on vaping products. “This bill will strengthen the identification requirements … the same as we do for alcohol or tobacco,” Yeager said while explaining the measure and an accompanying amendment.

The amendment the committee adopted (amendment number referenced in committee as 005630) directs any revenues generated by the bill into the general fund, after deduction of administration and enforcement costs. Committee members cited the fiscal note’s estimate that the tax would generate roughly $16,000,000 annually; the sponsor and staff said the fiscal memorandum contains the full estimate and that precise administrative costs are not yet determined.

Why it matters: supporters said the measure responds to rising youth vaping and illicit products, while some members questioned whether a mandated product registry would reduce youth use compared with licensing retailers. Yeager told colleagues the bill was prompted by a juvenile judge who described an influx of illicit Chinese-made vape products in rural juvenile dockets and school incidents in her district.

Debate and questions: Senators on both sides supported stronger enforcement but differed on approach. Senator Lamar and Senator Yarbrough referenced a task force report that had recommended retailer licensing; Lamar cautioned that a directory of products may not deter youth use and asked why the bill chose manufacturer posting over licensing. Yeager and other supporters said product reporting would give law enforcement information to identify illicit items entering Tennessee, and that a licensing bill could be brought separately.

Tax structure and public-policy rationale: the bill separates tax rates across product types in the draft discussed by the committee—open-system vapes at 10 percent, closed-system vapes at 7 percent, and traditional tobacco products at roughly 6.6 percent—prompting questions about the policy basis for differential rates. Yeager said the bifurcated approach follows other states’ examples and the sponsor disputed testimony that vaping is less harmful than cigarettes.

Vote and next steps: the amendment to place revenues in the general fund was adopted, and the committee voted to recommend the bill, as amended, for passage to the calendar committee. Committee staff recorded named “aye” votes during roll call for Senators Hale, Hensley, Johnson, Powers, Rose, Stevens, Wally and Yeager; the clerk announced a final tally of 9 ayes and 2 noes. The committee report sends the bill to the calendar committee for consideration.

Unresolved details: committee members pressed for clearer estimates of enforcement and administrative costs needed to run the manufacturer registry and for evidence showing a product directory would reduce youth vaping. The sponsor pointed members to the bill’s fiscal memorandum and said the Department of Revenue would build the listing website. The transcript records the sponsor saying “application pending in front of the FDA,” but the bill’s text and administrative plan will need to specify how FDA processes and federal law affect state enforcement.

Votes at a glance

- Senate Bill 763 (sponsor: Chairman Yeager) — Amendment (005630) adopted to place revenues into the general fund, less administration/enforcement costs; committee recommendation for passage to the calendar committee. Vote: committee tally announced as 9 ayes, 2 noes. Named recorded ayes during roll call: Hale, Hensley, Johnson, Powers, Rose, Stevens, Wally, Yeager. (Transcript did not record all individual “no” votes by name.)