AN ACT to amend and reenact subdivision d of subsection 3 of section 23-12-10 of the North Dakota Century Code, relating to cigar lounges.
Summary
HB 1440 revises North Dakota’s rules for certifying and operating cigar lounges. The bill keeps the basic framework that allows a cigar lounge to operate only if it has a tax commissioner certificate, a humidor, enclosed premises, and a ventilation system that prevents smoke from entering nonsmoking areas. It also continues to limit smoking in the lounge to cigars and pipe tobacco purchased on the premises, and it preserves the confidentiality of information reported to the tax commissioner.
The bill changes the certification process in several important ways. For an initial certificate, an applicant must report only that the premises meet the physical and ventilation requirements; the tax commissioner may not require income information at that stage. For annual renewal, the lounge must report that at least 15% of its annual gross income comes from the sale of cigars and pipe tobacco, and the commissioner must renew the certificate upon receiving supporting documentation. The bill also clarifies definitions of “cigar lounge,” “cigar,” and “pipe tobacco,” and specifies that the commissioner is not required to independently verify the accuracy of the reported information, but may not issue or renew a certificate without supporting documentation.
The bill’s impact is limited to section 23-12-10 of the North Dakota Century Code, which governs smoking restrictions and exceptions for cigar lounges. It narrows and clarifies the administrative requirements for certification, shifts the focus of initial approval away from income reporting, and reinforces the annual revenue threshold tied to cigar and pipe tobacco sales. The practical effect is to make the cigar lounge exemption more clearly defined and easier to administer while still preserving a revenue-based test for continued eligibility.
Overall sentiment appears generally supportive, as reflected in the strong bipartisan vote margins in both chambers. The bill passed the House and Senate with comfortable majorities, though it did draw some opposition in each chamber, indicating that not all lawmakers were comfortable with expanding or clarifying the cigar lounge exemption. No committee transcript was provided, so the available record shows support in floor votes but does not identify detailed debate points.
The main point of contention is likely the policy choice to maintain a special smoking exemption for cigar lounges and to rely on self-reported documentation rather than direct verification by the tax commissioner. Supporters likely viewed the bill as a clarification of existing law and a practical regulatory update for specialty tobacco businesses, while opponents likely objected to continued allowance of indoor cigar smoking or to the reduced oversight in the certification process.
Impact
HB 1440 amends North Dakota Century Code section 23-12-10, subdivision d, which governs cigar lounge exceptions to smoking restrictions. It changes the certification and renewal requirements for cigar lounges, defines eligibility more precisely, and preserves the tax commissioner’s role in issuing annual certificates based on documented compliance with the 15% gross-income threshold from cigar and pipe tobacco sales. The bill affects cigar lounge operators, the tax commissioner, and enforcement of smoking restrictions in nonsmoking areas.
Sentiment
The bill appears to have been received favorably overall, with strong passage in both chambers and only a minority of dissenting votes. The vote totals suggest broad acceptance of the measure as a regulatory clarification, though the presence of notable nays in both the House and Senate indicates some continued concern about cigar lounge exemptions and indoor smoking policy. No committee discussion was available to show more detailed sentiment.
Contention
The likely areas of contention were whether cigar lounges should remain exempt from general smoking restrictions and whether the state should continue to permit indoor cigar and pipe tobacco smoking under a special certificate. Another possible point of disagreement was the bill’s reliance on self-reported information and supporting documentation rather than independent verification by the tax commissioner. Opponents of the bill likely focused on public health and enforcement concerns, while supporters likely emphasized business regulation clarity and the limited, specialized nature of the exemption.