Legislature(2023 - 2024)BELTZ 105 (TSBldg)
03/31/2023 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB84 | |
| SB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 83 | TELECONFERENCED | |
| += | SB 84 | TELECONFERENCED | |
| += | SB 89 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 31, 2023
1:37 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Click Bishop, Vice Chair
Senator Elvi Gray-Jackson
Senator Kelly Merrick
Senator Forrest Dunbar
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 84
"An Act relating to the business of money transmission; relating
to money transmission licenses, licensure requirements, and
registration through the Nationwide Multistate Licensing System
and Registry; relating to the use of virtual currency for money
transmission; relating to authorized delegates of a licensee;
relating to acquisition of control of a license; relating to
record retention and reporting requirements; authorizing the
Department of Commerce, Community, and Economic Development to
cooperate with other states in the regulation of money
transmission; relating to permissible investments; relating to
violations and enforcement of money transmission laws; relating
to money transmission license exemptions; relating to payroll
processing services; repealing currency exchange licenses; and
providing for an effective date."
- MOVED SB 84 OUT OF COMMITTEE
SENATE BILL NO. 89
"An Act relating to tobacco, tobacco products, electronic
smoking products, nicotine, and products containing nicotine;
raising the minimum age to purchase, sell, exchange, or possess
tobacco, a product containing nicotine, or an electronic smoking
product; relating to the taxation of electronic smoking products
and vapor products; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 83
"An Act relating to professional licensing; relating to
temporary licenses for some professions; and providing for an
effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: SB 84
SHORT TITLE: MONEY TRANSMISSION; VIRTUAL CURRENCY
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/24/23 (S) READ THE FIRST TIME - REFERRALS
02/24/23 (S) L&C, JUD, FIN
03/06/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/06/23 (S) Heard & Held
03/06/23 (S) MINUTE(L&C)
03/27/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/27/23 (S) Heard & Held
03/27/23 (S) MINUTE(L&C)
03/31/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 89
SHORT TITLE: AGE FOR TOBACCO/NICOTINE/E-CIG; TAX E-CIG
SPONSOR(s): STEVENS
03/01/23 (S) READ THE FIRST TIME - REFERRALS
03/01/23 (S) L&C, FIN
03/24/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/24/23 (S) Heard & Held
03/24/23 (S) MINUTE(L&C)
03/31/23 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
TIM LAMKIN, Staff
Senator Gary Stevens
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 89.
RICH MARIANOS, Professor
Georgetown University
Washington, D.C.
POSITION STATEMENT: Testified in opposition to SB 89.
KEITH DAVIDSON, Division Sales Director
Core-Mark International
Beaverton, Oregon
POSITION STATEMENT: Testified in opposition to SB 89.
DON ENSLOW, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 89.
DR. GEORGE STEWART, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 89.
DR. JOHN MARTIN, President
Smokefade
Long Beach, California
POSITION STATEMENT: During the hearing on SB 89, testified that
e-cigarettes are a key tobacco harm reduction method.
SHAUN D'SYLVA, Owner
Fatboy Vapors
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
FLORA RODDY, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 89.
LAURA CARTER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 89.
ROBIN MINARD, Chief Communications Officer
Mat-Su Health Foundation
Wasilla, Alaska
POSITION STATEMENT: Testified in support of SB 89.
TERRENCE ROBBINS, representing self
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of SB 89.
ELIZABETH HICKS, U.S. Affairs Analyst
Consumer Choice Center
Lansing, Michigan
POSITION STATEMENT: Testified in opposition to SB 89.
KAMREN EATON, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
DAVID PARROTT, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
DENNIS HULL, State Affairs Coordinator
Americans for Tax Reform
Washington, D.C.
POSITION STATEMENT: Testified in opposition to SB 89.
ALEX MCDONALD, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
CODY WALKER, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
GREGORY CONLEY, Director
Legislative and External Affairs
American Vapor Manufacturers
Medford, New Jersey
POSITION STATEMENT: Testified in opposition to SB 89.
JESSI WALTON, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
WADE NELSON, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
JANICE PARK, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 89.
JESSICA FREY, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 89.
CASEY JOHNSON, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
KATIE EDWARDS, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified in opposition to SB 89.
JAY OKU, representing self
Orange County, California
POSITION STATEMENT: Testified in opposition to SB 89.
ACTION NARRATIVE
1:37:04 PM
CHAIR JESSE BJORKMAN called the Senate Labor and Commerce
Standing Committee meeting to order at 1:37 p.m. Present at the
call to order were Senators Dunbar, Bishop, Merrick, Gray-
Jackson, and Chair Bjorkman.
SB 84-MONEY TRANSMISSION; VIRTUAL CURRENCY
1:38:03 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 84
"An Act relating to the business of money transmission; relating
to money transmission licenses, licensure requirements, and
registration through the Nationwide Multistate Licensing System
and Registry; relating to the use of virtual currency for money
transmission; relating to authorized delegates of a licensee;
relating to acquisition of control of a license; relating to
record retention and reporting requirements; authorizing the
Department of Commerce, Community, and Economic Development to
cooperate with other states in the regulation of money
transmission; relating to permissible investments; relating to
violations and enforcement of money transmission laws; relating
to money transmission license exemptions; relating to payroll
processing services; repealing currency exchange licenses; and
providing for an effective date."
He stated that this is the third hearing of this bill.
1:38:40 PM
CHAIR BJORKMAN opened public testimony on SB 84; finding none,
he closed public testimony.
CHAIR BJORKMAN solicited the will of the committee.
1:39:30 PM
SENATOR BISHOP moved to report SB 84, work order 33-GS1312\A,
from committee with individual recommendations and attached
fiscal note(s).
1:39:56 PM
CHAIR BJORKMAN found no objection and SB 84 was reported from
the Senate Labor and Commerce Standing Committee.
1:40:04 PM
At ease.
SB 89-AGE FOR TOBACCO/NICOTINE/E-CIG; TAX E-CIG
1:42:20 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 89 "An Act relating to tobacco,
tobacco products, electronic smoking products, nicotine, and
products containing nicotine; raising the minimum age to
purchase, sell, exchange, or possess tobacco, a product
containing nicotine, or an electronic smoking product; relating
to the taxation of electronic smoking products and vapor
products; and providing for an effective date."
He stated that this is the second hearing of this bill. The
intention today is to hear the sectional analysis and begin
public testimony on the bill.
1:42:56 PM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 89, as paraphrased below:
[Original punctuation provided.]
SENATE BILL 89
Minimal Age for Tobacco and E-Cigarettes: "T-
21"
SECTIONAL ANALYSIS
(version B)
Sec. 1: AS 11.76.100(a), relating to selling or giving
tobacco to a minor, raises the minimum age from
19 to 21.
Sec. 2: AS 11.76.100(b), relating to supervision of
tobacco product vending machines (TVM), amends
the exemption for TVMs situated in a private
break room, provided there is signage posted
indicating the minimum age to possess tobacco
products is age 21 (from 19).
Sec. 3: AS 11.76.100(b), also relates to tobacco
product vending machines situated in a bar or
restaurant. The statutory reference of such
establishments was amended from AS 4.11 to AS
4.09, effective January 1, 2024, per Chapter 8,
SLA 2022 (the "alcohol bill" -SB 9), passed in
May 2022. Because the effective date of this
section in the alcohol bill falls after the
effective date of SB 89, a subsequent
conforming amendment is necessary. This section
is therefore technical in nature and otherwise
has no effect on the substance of SB 89.
Sec. 4: AS 11.76.105, (a) relating to possession of
tobacco, electronic smoking products (ESP), or
products containing nicotine, raises the
minimum age to possess from 19 to 21 years of
age; removes the exemption for incarcerated
minors;
(b) makes allowable exemptions as an
affirmative defense for possession under
certain conditions; to include if the product
is FDA-approved, is prescribed by a doctor, and
given by a parent or legal guardian. and
(c) makes possession a violation punishable by
a fine not to exceed $300
1:46:16 PM
CHAIR BJORKMAN asked what the rationale was for exempting
incarcerated minors and whether the Department of Corrections
had a position on removing it.
MR. LAMKIN replied that he had not researched the history of the
exemption. The section applies to smoke breaks in prisons and
provides that minors who are currently allowed to smoke in
prison would no longer have that privilege.
MR. LAMKIN moved to Section 5 of the sectional analysis:
[Original punctuation provided.]
Sec. 5: AS 11.76.105 (d) Directs the court system to
establish a bail schedule for the fine
referenced in Section 3 above, for amounts that
may be forfeited without court appearance.
Sec. 6: AS 11.76.106(a) prohibits the direct sale of
ESPs over the Internet to private consumers,
with exceptions provided in the next section.
Sec. 7: AS 11.76.106(b), relating to the 'behind the
counter' control provisions of selling tobacco
products, allowing exemptions for wholesalers,
tobacco shops or online sales, raising the
minimum age to sell from 19 to 21 years of age.
Sec. 8: AS 11.76.109(a), relating to other products
containing nicotine, including chew, gum,
patches, or E-cigarette products, raises the
minimum age to sell or give such products from
19 to 21.
Sec. 9: AS 11.76.109(b), relating to exemptions to
selling products containing nicotine to persons
under the age of 21, if the product is FDA-
approved, is prescribed by a doctor, and given
by a parent or legal guardian.
Sec. 10: AS 11.76.109(d), relating to the requirement
for vendors to supervise the operation of ESP
or nicotine product vending machines (EVM),
amends the exemption for EVMs situated in a
private break room, provided there is signage
posted indicating the minimum age to possess
tobacco products is age 21 (from 19).
Sec. 11: AS 11.76.109(d), also relates to EVMs
situated in a bar or restaurant. The statutory
reference of such establishments was amended
from AS 4.11 to AS 4.09, effective January 1,
2024, per Chapter 8, SLA 2022 (the "alcohol
bill" -SB 9), passed in May 2022. Because the
effective date of this section in the alcohol
bill falls after the effective date of SB 89, a
subsequent conforming amendment is necessary.
This section is therefore technical in nature
and otherwise has no effect on the substance of
SB 89.
Sec. 12: AS 11.76.109(g), relating to the penalty for
selling or gifting ESP or nicotine products to
a minor as being a $300 violation, raises the
minimum age from 19 to 21 years of age.
Sec. 13: AS 11.81.900(b) adds a definition of
nicotine, to include a chemical or chemical
compound intended to simulate the effect of the
plant-based chemical derived from the tobacco
plant. This is intended to include the
emergence of synthetic nicotine in the market
as a means of evading tax and sales penalties.
1:52:12 PM
MR. LAMKIN moved to Section 14 of the sectional analysis:
Sec. 14: AS 43.50.070(a), relating to licensing
requirements for buying or selling tobacco or
other products containing nicotine, adds legal
authority for the Dept. of Revenue to suspend,
revoke a license for ESP sales.
Sec. 15: AS 43.50.105(b), relating to wholesale
cigarette sales and licensees, to restrict
licensees from selling or transporting tobacco
products to persons that are at least 21 (from
19) years of age, and to implement an age
verification process when conducting
transactions.
Sec. 16: AS 43.50.105(c), relating to common carrier
transportation of cigarettes, to verify the age
(21) of the recipient before delivery.
Sec. 17: AS 43.50.150(c), relating to the state being
in partnership with municipalities in taxing
tobacco products, is amended to include those
municipalities taxing ESPs, to share data and
jointly audit licensees selling those products.
Sec. 18: AS 43.50.325 adds a restriction on the
transportation of tobacco and ESPs into the
state, requiring licensing to do so, and makes
clear provisions for age verification for
delivery of and labelling for such products.
This is a conforming amendment, replicating AS
43.50.015, which applies only to cigarettes.
1:54:07 PM
MR. LAMKIN described Section 19 as the heartbeat of SB 89:
[Original punctuation provided.]
Sec. 19: AS 43.50 is amended by adding Article 8,
relating to ESP Sales, Shipping, Licensing, and
Taxation
AS 43.50.850 levies a 25% tax on the sales
price of closed-system ESPs and vapor products
in the state.
AS 43.50.855 provides for exemptions from the
tax to include closed ESPs or vapor sold on
military bases, approved by the FDA as a
tobacco cessation product, or sold as a
marijuana or hemp product.
AS 43.50.860 requires retailers to be licensed
in the state to sell ESPs, details an annual
application renewal process and fee, license
transferability, suspension and revocation,
product packaging and labelling requirements,
and restrictions on marketing flavored products
to youths.
AS 43.50.865 requires ESP licensees to file a
monthly tax return to the Dept. of Revenue
(DOR), including information on what was sold,
sales prices, and tax imposed.
AS 43.50.870, provides for tax credits and
refunds for faulty, damaged or destroyed ESP
products that will not be sold.
1:55:28 PM
MR. LAMKIN mentioned that AS 43.50.870 may be struck
because it applies to wholesalers and the bill is about
retail sales.
1:55:48 PM
SENATOR MERRICK noted that previous versions of the bill had tax
at the wholesale level. She asked what the rationale was for
creating a new retail tax.
MR. LAMKIN answered that cigarettes and tobacco have a well-
defined, tiered system with well-established, defined
manufacturers, distributers, and retailers, but that is not
necessarily the case with e-cigarette and vape products. He said
there are instances in which a retailer is also a manufacturer.
Crafting a wholesale tax is challenging when the lines are
blurred and definitions of these roles can be manipulated.
Implementing an additional retail tax was identified as the most
effective means of taxation.
MR. LAMKIN continued presenting the sectional analysis:
[Original punctuation provided.]
AS 43.50.875 requires record keeping for
licensees selling ESPs, including information
on purchase prices, product sources, and volume
of purchase. This information is to be kept on
file for 3 years and kept confidential by the
DOR.
AS 43.50.880 directs taxes collected on ESPs to
be accounted for separately and that the tax
revenue may be appropriated by the legislature
to provide for educational programs in health
care and research, and advertising related to
the hazards of ESPs.
1:58:36 PM
SENATOR BISHOP drew attention to AS 43.50.875, which addresses
confidentiality. He asked whether this was standard practice.
MR. LAMKIN expressed his belief that it was standard practice.
MR. LAMKIN continued presenting the sectional analysis:
[Original punctuation provided.]
AS 43.50.885 is a conforming amendment, adding
restrictions to shipping or transporting ESPs
into the state without a license, consistent
with same statutes relating to shipping or
transporting tobacco or cigarettes.
AS 43.50.890 places restrictions on ESP vapor
products to include:
1. a nicotine concentration of no more than
20mg/ml;
2. protection from breakage and leakage;
3. not containing other additives or stimulants
such as caffeine, taurine, or vitamin E
acetate;
4. child- and tamper-proof packaging
5. clear labeling to inform customers of all
ingredients and nicotine content.
2:00:31 PM
MR. LAMKIN embellished on the decision to cap the concentration
of nicotine at no more than 20mg/ml. He advised that it is
important to avoid creating an incentive to increase the
concentration of nicotine in these products as they will be
taxed regardless of the nicotine content. The presumption is
that all vape and e-cigarette products have nicotine in them but
the key is that they are not too potent. Toxic levels are
reached at around 60mg. Nicotine is a key addictive component of
making people want to continue smoking. He advised the committee
to consider limiting how potent e-cigarettes can be because
otherwise, it would be counterproductive.
2:02:03 PM
SENATOR BISHOP asked whether there was random periodic sampling
of these products.
MR. LAMKIN answered no, there has been little testing. The data
he reviewed indicates that the products often claim zero or low
nicotine levels when in fact it is higher.
MR. LAMKIN continued presenting the sectional analysis:
[Original punctuation provided.]
AS 43.50.900 provides a definition for "sales
price" for tax purposes
AS 43.50.990 provides definitions for "closed
electronic smoking product," "electronic
smoking product," "vapor product," "nicotine,"
and "retailer." Hardware components such as
batteries, battery chargers, heating elements
and mouthpieces are excluded from the
definition of an ESP for tax purposes, when
sold separately or not part of a closed ESP.
Sec. 20: AS 43.70.075(f), relating to business license
endorsements for selling tobacco products,
amends the existing requirement for signage to
be posted on vendor premises, stating it being
illegal to sell tobacco or ESPs to minors under
the age of 21 (from 19).
Sec. 21: AS 43.70.075(m), relating to the process for
suspending business licensees holding a tobacco
endorsement, amends existing statute referring
to tobacco or ESPs being sold to minors under
the age of 21 (from 19).
Sec. 22: AS 43.70.075(t), relating to penalties for
licensees violating the T21 laws, amends
existing statute for lessening the penalties if
a license holder has a written tobacco or ESPs
sales policy to include employees not selling
tobacco or ESPs to minors under the age of 21
(from 19).
Sec. 23: AS 43.70.075(w), relating to the appeal and
administrative process of license suspension,
conforms existing law regarding tobacco and ESP
sales, to apply to sales to minors under the
age of 21 (from 19).
Sec. 24: AS 45.50.471(b), relating to consumer
protection and unlawful business practices,
adds a new subsection making it unlawful to
market or advertise ESPs to persons under the
age of 21 in the state. This is a conforming
change consistent with unlawful marketing
referenced in Section 18 above.
Sec. 25: AS 47.12.030(b), relating to the juvenile
justice system, and minors accused of
possessing tobacco, conforms existing law to
apply to possession by minors under the age of
21 (from 19).
Sec. 26: AS 11.76.100(e), relating to sales, gifting
and possession exemptions for incarcerated
persons, and AS 11.76.106(b)(4), allowing
internet sales of ESP products to unlicensed
consumers, are both repealed.
Sec. 27: Relates to applicability of conforming
changes in the bill, and also for purposes of
sales, provides a grandfather clause for
persons age 19-20 who, on the effective date of
the act, are employed on premises licensed to
sell these products.
Sec. 28: Applies an effective date for Sections 3 and
Section 11, relating to vending machines in
bars and restaurants, as specified in Ch 8 SLA
2022 (the "alcohol bill") of January 1, 2024.
Sec. 29: Applies an effective date of July 1, 2023.
2:06:36 PM
SENATOR BISHOP directed attention to Section 23 and asked what
the penalty is if the licensee is found guilty of illegally
selling to a minor.
MR. LAMKIN answered that the fine for a clerk is $300-$500. A
licensee goes through a tiered system which has not changed; by
the third offence their license is not renewable.
2:07:46 PM
SENATOR DUNBAR said he wants to discuss employment, but he will
hold his questions until after public testimony.
2:08:23 PM
CHAIR BJORKMAN opened public testimony on SB 84.
2:08:54 PM
RICH MARIANOS, Professor, Georgetown University, Washington,
D.C., gave testimony in opposition to SB 89. He said that in
states where taxes on disposable e-cigarettes are increasing,
there is a coinciding increase in crime. Black market products
are flooding in, giving children greater access. In Los Angeles,
eight out of ten stores are selling vape products to youth and
all of the product is supplied by the black market. These
measures are the antithesis of police reform. When officers
target people selling tobacco on the street instead of focusing
on protecting them from more serious criminals, it creates a
bigger wedge between law enforcement authorities and the
community they serve. In New York, the taxes on e-cigarettes are
so high that criminals are smuggling in illegal vape product,
causing the state to lose billions of dollars in revenue.
2:11:26 PM
KEITH DAVIDSON, Division Sales Director, Core-Mark
International, Beaverton, Oregon, gave testimony in opposition
to SB 89. He said the 25 percent retail tax would be punitive
for consumers seeking an alternative nicotine product to replace
harmful traditional combustible products. Adult consumers should
have legal access to step-down reduced-harm products such as
e-cigarettes. If the goal is to keep vape products away from
youth, then the focus should be on those that provide the
products to them. E-cigarette product sellers use age
verification on every purchase. It is adults, most often family
members, who provide these products to children. The cap on
nicotine content would decimate the vape category in Alaska.
Taxing vape products while simultaneously limiting their
availability may have the effect of expanding the black market
for vapes, such as in the case of New York.
2:14:04 PM
DON ENSLOW, representing self, Anchorage, Alaska, testified in
support of SB 89. He said part of his job was to monitor
chemical exposure hazards to his coworkers. He pointed out that
the Hopkins Medicine website reports that there are chemical
toxins in e-cigarettes and their vapor. His father was a chain
smoker and died of lung cancer, so he is privy to the dangers
that chemical toxin exposure presents to personal health. He
said that taxes on e-cigarettes are an effective measure for
reducing and discouraging tobacco use. SB 89 is needed to
counter trending vape use in Alaska. Increasing the legal age
for consumption is critical for reducing vape use among youth.
He expressed the hope that tax revenue would support youth
education on the dangers of tobacco use.
2:15:48 PM
DR. GEORGE STEWART, representing self, Anchorage, Alaska,
testified in support of SB 89. He said the American Lung
Association supports the intent of the bill. The US Surgeon
General has declared the use of e-cigarettes an epidemic. One in
four Alaskan high school students use e-cigarettes. Another
generation is becoming addicted to dangerous tobacco products.
Inhaling e-cigarette vapor introduces nickel, lead, and tin into
the lungs. Ultrafine particles enter the alveoli from the lungs
and then pass into the bloodstream, causing inflammation. The
only thing people should breathe is clean, healthy air.
2:18:38 PM
DR. JOHN MARTIN, President, Smokefade, Long Beach, California,
stated that he is a licensed clinical psychologist and former
professor of psychiatry. RG Reynolds paid him to prepare these
comments and testify, but the opinions are his own. He said
there is a growing scientific consensus that e-cigarettes are
safer than combustible cigarettes. Reducing the amount of
nicotine in vape products risks losing users who find the lower
concentration less satisfying. He said that users of a 5 percent
nicotine product had a greater reduction in urges to smoke than
users of a 3 percent nicotine product. Capping nicotine
concentration exposes users to greater levels of potential
toxins because they will compensate by puffing more and may even
return to smoking traditional cigarettes. E-cigarettes are a key
tobacco harm reduction method.
2:21:16 PM
SHAUN D'SYLVA, Owner, Fatboy Vapors, Anchorage, Alaska,
testified in opposition to SB 89. He agreed that legislators and
community members should work together to limit youth use of and
access to vape products. Teen usage of combustible nicotine
products is less than 2 percent and vaping use is at 9.4
percent. Combined, the amount of use is lower than at any time
in the last 50 years. The FDA has approved nicotine levels at 6
percent for e-cigarettes, but SB 89 would cap the level at 2
percent. These products are designed to aid in smoking cessation
and higher nicotine concentrations are useful for this purpose.
He believes SB 89 will harm adult users by taking away an
opportunity for them to stop smoking.
2:23:21 PM
FLORA RODDY, representing self, Fairbanks, Alaska, testified in
support of SB 89. She grew up in a smoker's household, her
husband smokes, and her grandchildren have parents who smoke.
She said e-cigarettes are easy for kids to hide, but they create
large clouds of vapor when they're used. It's discouraging to
see how common vapes have become. Her grandmother died of
emphysema and her husband had esophageal cancer after smoking
for 30 years. For these reasons, she supports raising the age
and taxing [vape products].
2:26:05 PM
At ease.
2:26:12 PM
CHAIR BJORKMAN reconvened the meeting.
2:27:15 PM
LAURA CARTER, representing self, Anchorage, Alaska, testified in
support of SB 89. She said her opinions are strongly swayed by
her position as a middle school assistant principal. Students
are vaping all over school. Vapes are easy to obtain. SB 89 will
reduce youth access to vapes. She said she was infuriated that
vape packaging, flavors, and marketing appeal to young people.
Examples of confiscated vape flavors include: rainbow cloud,
blue cotton candy, watermelon freeze, and strawberry donut. This
is not the predicament of bad kids, rather it is the result of
targeting. Prevention is easier than trying to help an eleven-
year-old through a nicotine cessation program.
2:29:13 PM
ROBIN MINARD, Chief Communications Officer, Mat-Su Health
Foundation, Wasilla, Alaska, testified in support of SB 89. She
stated that most tobacco use begins before age 18. She said that
policies that increase the unit price of tobacco products create
smoke-free environments and restrict minors' access to tobacco
have been proven to contribute to the non-use of tobacco among
youth. About a third to one half of high school students in Mat-
Su use vape products. She reiterated support for SB 89.
2:30:45 PM
TERRENCE ROBBINS, representing self, Ketchikan, Alaska,
testified in support of SB 89. He said it was important to tax
e-cigarettes just as much as other tobacco products. E-cigarette
usage has sky-rocketed among Alaskan youth. Youth who use e-
cigarettes are three times more likely to become daily cigarette
smokers than a youth who never uses e-cigarettes. Higher pricing
will reduce youth initiation rates.
2:31:58 PM
ELIZABETH HICKS, U.S. Affairs Analyst, Consumer Choice Center,
Lansing, Michigan, testified in opposition to SB 89. She said
that limiting nicotine levels in vapes and increasing taxes will
incentivize current smokers not to move away from combustible
cigarettes and even encourage adults who vape to switch back to
combustible tobacco products. She stated her belief that vaping
is 95 percent less harmful than smoking. She said that ensuring
that adult consumers have access to their preferred vaping
products will lead to fewer cigarette smoking-related deaths in
Alaska. More than 43,000 Alaskans have switched to e-cigarettes,
but SB 89 will effectively undermine consumers by preventing
them from using the nicotine products that are significantly
less harmful. They will be less inclined to purchase products
from regulated entities and will look to the illicit market.
This presents concerns that consumers will be purchasing
products that do not adhere to regulatory standards.
Additionally, the illicit market does not implement an age
restriction, making it easier to acquire the product illegally.
She shared that after being around second hand smoke most of her
life, she was diagnosed with cancer and has been undergoing
chemotherapy; she would not wish that experience on anyone. She
posited that e-cigarettes are a harm-reduction tool. SB 89 is
misguided and unintended consequences will exacerbate the very
problems the state is trying to fix.
2:33:47 PM
KAMREN EATON, representing self, Wasilla, Alaska, testified in
opposition to SB 89. He expressed that he understood that the
state must abide by the federal age change from 19 to 21. He was
confused as to why so many other items were included in the bill
besides that. He also said that it seemed weird to him that a
military veteran who fought for their country cannot smoke a
cigarette or e-cigarette, but criminals in prison would be
allotted a smoke break. He went on to voice concern that the
nicotine cap will encourage transactions in the black market.
2:35:35 PM
DAVID PARROTT, representing self, Soldotna, Alaska, testified in
opposition to SB 89 as a vape shop owner. He complained that the
tax would place a burden on his customers who are trying to get
off of cigarettes. He was confused by the shipping restrictions.
He took issue with the notion of the state banning devices
approved by the FDA. He said requiring additional age
verification at a vape shop was unfair to his industry. He
complained that the tax would put mom and pop shops out of
business.
2:37:41 PM
DENNIS HULL, State Affairs Coordinator, Americans for Tax
Reform, Washington, D.C., testified in opposition to SB 89. He
suggested keeping the legal penalties for minors that possess
vape products. He opined that requiring a court appearance is an
effective way to mitigate offenses of possession. The new tax at
25 percent is high and poor Alaskans will bear the burden.
Seventy-two percent of Alaskan smokers are from low income
communities. Cigarettes are the leading cause of preventable
death, while vapes are 95 percent safer than cancer sticks. He
said the chances of quitting smoking are three times higher if
one switches to e-cigarettes. It may be that doctors in England
prescribe vape products as medical devices. Nicotine does not
kill people. Other tobacco products do not contain tobacco;
there have been synthetic nicotine developments in the industry.
For the 15 percent of Alaskans who are addicted to cigarettes,
the reliance on nicotine is the lesser concern. He contended
that Alaskan smokers need every incentive to switch to vaping.
He called attention to the statistic mentioned earlier that 1 in
4 high school students are regular users of e-cigarettes. He
stated that this is not true; that is the number of students who
have tried an e-cigarette in the last 30 days.
2:39:51 PM
ALEX MCDONALD, representing self, Fairbanks, Alaska, testified
in opposition to SB 89. He said he wanted to address fallacies
in the presentation of the bill. Juul and other e-cigarette
companies stopped advertising years ago, so those marketing
campaigns are no longer an issue. He stated his belief that
smoking a cigarette in only seven puffs is unreasonable. He also
lost family members to smoking, and said he wished that e-
cigarettes had been around earlier. He pointed out that a
standard cigarette has 1.8mg of nicotine so a pack has around
40mg, rather than 20mg. He stated that buying vapes for only $1
is unusual. He said capping the nicotine at 20mg would take half
the vape products off the market. He reiterated his opposition
to SB 89.
2:42:19 PM
CODY WALKER, representing self, Soldotna, Alaska, testified in
opposition to SB 89. He disagreed with taxing adults on vape
pens which haven't hurt anyone. In contrast, the overdose rate
on illicit drugs has gone up 74 percent in Alaska. He stated
that it was ridiculous to go after vapes, which help people,
instead of focusing on the drug overdose epidemic.
2:43:01 PM
GREGORY CONLEY, Director, Legislative and External Affairs,
American Vapor Manufacturers (AVM), Medford, New Jersey,
testified in opposition to SB 89. AVM supports the tobacco 21
provisions in the bill but has serious concerns about the
regressive 25 percent retail tax. He said the retail tax will be
difficult to enforce, increase untaxed sales, close law-abiding
businesses, and cause taxed vaping to be more expensive than
using other tobacco products. Wholesale tax systems have worked
out in other states. In Indiana, ly-by-night businesses are
either not collecting the retail tax or collecting just a tiny
share of what they owe. When every retailer is expected to pay
that tax, enforcement becomes more difficult. Many of the
manufacturers standards mimic federal law and the nicotine cap
is preempted by federal law. A more potent product can be a less
hazardous one. Vaping is not on the rise among youth; the data
is outdated. He said that vaping has declined nationally among
youth and adult vaping has increased. He concluded by saying
that the director of the FDA Center for Tobacco Products said
that he doesn't use the term epidemic because it means going
up.
2:45:09 PM
JESSI WALTON, representing self, Fairbanks, Alaska, testified in
opposition to SB 89. She stated that she is a former smoker and
she doesn't believe she should be taxed for making a healthier
choice. When the weather is 40 below, she prefers using her e-
cigarette. She doesn't want to die of a smoking-related illness.
She said this bill will push people back to combustible
cigarettes. She is living proof that it can help people quit
smoking. Forcing small businesses to fight bills like this year
after year is the reason doing business in Alaska is among the
worst in the country.
2:46:10 PM
WADE NELSON, representing self, Soldotna, Alaska, testified in
opposition to SB 89. He is a former smoker and he believes that
adding a 25 percent sales tax won't stop youth from vaping.
Rather, it will place a burden on adults who chose to use vape
products, which are a 95 percent safer alternative to
combustible cigarettes.
2:46:45 PM
JANICE PARK, representing self, Anchorage, Alaska, testified in
support of SB 89. She asserted that nicotine does kill people.
She described her father's health decline as a result of
smoking. She said that raising the legal age to 21 protects
children from possession and consumption, the side effects of
secondhand smoke, and the premature loss of loved ones.
2:48:58 PM
JESSICA FREY, representing self, Anchorage, Alaska, testified in
support of SB 89. She said she supports taxing e-cigarettes.
Youth use of e-cigarettes is an epidemic throughout the country.
She said there is proof that increasing the price of tobacco
products is the single most effective way to reduce consumption
of and prevent youth initiation to tobacco products. She said
she is witnessing her 9-year-old child dealing with peer
pressure. Nicotine harms brain development and causes cancer.
Emissions from e-cigarettes contain cancer-causing chemicals.
She asserted that raising costs on these products is one step to
protect youth from future lung health issues, forming other
addictive behaviors, and potentially cancer. Vape products are
not currently taxed in Alaska and are addicting a new generation
to nicotine.
2:50:39 PM
CASEY JOHNSON, representing self, Soldotna, Alaska, testified in
opposition to SB 89. He said that nicotine does not kill anyone.
It's all the other chemical additives and pesticides sprayed on
tobacco that are harmful. Vapes helped him overcome a severe
smoking addiction and consequently his respiratory health
improved. He disagreed with the tax increase and the nicotine
cap on e-cigarettes.
2:51:54 PM
KATIE EDWARDS, representing self, Soldotna, Alaska, testified in
opposition to SB 89. She said she is a former smoker and vaping
helped her regain her health. She said that raising the taxes on
vapes would make them a less affordable replacement for
combustible cigarettes, and she would regress back to smoking
should this bill pass.
2:52:48 PM
JAY OKU, representing self, Orange County, California, testified
in opposition to SB 89. He said a tax increase for blue collar
Alaskans during tough times will force people to purchase from
the black market. He asserted that a bottle of e-liquid
certainly costs more than $1. The tax increase would make
criminals out of good people or sentence them to a life of
smoking. He posited that the combined deaths from suicide,
murder, car accidents, fentanyl, COVID-19 and opioids would pale
in comparison to the 480,000 annual deaths from smoking-related
illness. He suggested that the solution is to enforce the law to
ensure underaged sales are not occurring.
2:55:26 PM
MR. LAMKIN offered closing remarks on SB 89. He refuted a lot of
the public testimony heard today. The message from schools
statewide overwhelmingly indicates that this is an epidemic.
Some children are addicted by the 4th grade. He stated that
vaping is so pervasive that schools are now investing in
expensive vapor detectors for school restrooms.
2:57:10 PM
CHAIR BJORKMAN closed public testimony on SB 89 and held the
bill in committee.
2:57:36 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:57 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 89 Public Testimony Received as of 03.10-30.23.pdf |
SL&C 3/31/2023 1:30:00 PM |
SB 89 |