Committee clears cigar-lounge bill with pipe-tobacco removal, 4-2

The Senate Finance and Taxation Committee advanced House Bill 14-40, a proposal to clarify permitting for cigar lounges, after adopting an amendment that removed pipe tobacco from the exemption and made a drafting-word change. The committee passed the bill as amended by a 4-2 vote.

Representative Dan Ruby of District 38, the bill sponsor, told the committee the bill fixes an implementation problem from last session’s enactment by allowing a new cigar lounge to operate in its first year and meet the statutory 15% cigar-and-pipe-sales threshold at the end of that year rather than requiring proof of prior sales on day one. "If they don't, they don't get a renewal," Ruby said, describing the change as a cleanup to allow startups to obtain a permit.

The original draft added pipe tobacco to the indoor-smoking carve-out. That addition drew opposition from public-health and local-government witnesses. Andrew Horn, coalition program director for Tobacco Free North Dakota, urged a do-not-pass recommendation, saying the bill "eases requirements for cigar lounges" and would expose employees and patrons to secondhand smoke that cannot be fully removed by ventilation. "Clean air must remain the standard to protect health," Horn said.

Mike Crumwoody of the American Heart Association and Ben Hansen of the American Cancer Society Cancer Action Network also testified in opposition, warning the change would erode the state’s 2012 smoke-free law (Measure 4) and could invite additional carve-outs.

Susan Koehler, substance-abuse-prevention coordinator for the City of Bismarck, said local voters had recently approved smoke-free protections and opposed the bill because it would create enforcement challenges and "expose others to secondhand smoke."

Shannon Fleisher, associate director with the Tax Department, explained the department's role in permitting: businesses submit total sales and cigar-sales figures and provide supporting records for renewal, but the statute does not require the Tax Commissioner to independently confirm those figures. Fleisher said the department had received one application (the Mandan lounge) and had not denied any applications under the current law.

Senator Wallen moved an amendment to remove pipe tobacco and to change a drafting choice from "does not" back to "may not." The amendment passed on a roll call. Senator Romo moved a due-pass motion on the bill as amended; Senator Wallen seconded. The committee later voted to advance the bill as amended 4-2 and selected a Senate carrier to take the bill forward.

The committee discussion also clarified that local zoning authority remains intact and that the 15% gross-receipts threshold for cigar sales remains part of the law; the amendment removed the new pipe-tobacco carve-out and preserved the startup-renewal allowance.

The transcript shows multiple requests to draft technical clarifications; committee legal counsel agreed to prepare amendments for the record.