A state Senate panel has advanced a bill to drastically overhaul the Indiana vaping industry law that granted a monopoly to one company and sparked an FBI probe last summer.
The measure from state Sen. Randy Head, R-Logansport, was approved Wednesday on an 8-1 vote, clearing the way for the bill to be taken up by the full Senate.
Lawmakers passed the vaping law ostensibly to ensure consumer safety. It imposed strict safety standards for manufacturers of the nicotine-laced "e-liquid" used in vaping.
But Lafayette-based Mulhaupt's Inc. was the only company that was qualified to handle security permitting for producers under the law. And Mulhaupt's approved only six companies to produce.
Head's bill removes provisions from the law that created a monopoly for Mulhaupt's.
In January, the Indiana Seventh Circuit Cort of Appeals found that the strict requirements in the law—including the security firm language and rules regulating cleanliness standards—were unenforceable against out-of-state manufacturers because they were a violation of the dormant commerce clause of the U.S. Constitution.
The ruling had some pointed words about the “astoundingly specific" controversial security firm requirements in the original law, which was passed in 2015 and amended in 2016.
“At the most basic level, one might wonder why Indiana cares whether an out-of-state manufacturer provides for security at its facilities through a contract with an independent company rather than through its own employees,” the ruling stated.
“These circumstances raise obvious concerns about protectionist purposes and what looks very much like a legislative grant of a monopoly to one favored in-state company in the security business,” according to the ruling.
Legislative leaders have vowed to fix the law in the current session.
“I am glad to see the continued effort by legislators to correct the existing e-liquid law,” said Amy Lane, director of the Indiana Smoke-Free Alliance. "The Judiciary Committee’s vote of 8-1 really speaks volumes about their dedication and ISFA looks forward to the next week when SB1 moves to the Senate floor.”