Legislature(2025 - 2026)BARNES 124
01/29/2025 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB57 | |
| HB68 | |
| HB49 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 49 | TELECONFERENCED | |
| *+ | HB 57 | TELECONFERENCED | |
| *+ | HB 34 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 68 | TELECONFERENCED | |
HB 49-TOBACCO/NICOTINE/E-CIG AGE; E-CIG TAX
4:35:55 PM
CO-CHAIR HALL announced that the final order of business would
be HOUSE BILL NO. 49, "An Act relating to tobacco, tobacco
products, electronic smoking products, nicotine, and products
containing nicotine; raising the minimum age to purchase,
exchange, or possess tobacco, a product containing nicotine, or
an electronic smoking product; relating to the tobacco use
education and cessation fund; relating to the taxation of
electronic smoking products and vapor products; and providing
for an effective date."
4:36:08 PM
REPRESENTATIVE SARA HANNAN, Alaska State Legislature, as prime
sponsor, presented HB 49. She noted that there are two key
policies in HB 49: raising the minimum age to purchase from 19
to 21 to align state law with federal, and to establish a sales
tax for electronic smoking products (ESPs), otherwise known as
"vapes," or "vape products." In December of 2019, the Federal
Government changed the age to buy, possess, or consume tobacco
products from 19 to 21. Representative Hannan noted that Alaska
is not in compliance with the federal government. Under tobacco
products, vapes are not taxed by the State of Alaska. Under
Alaska statutes on tobacco, taxation is delineated by type. She
said ESPs could fall under the category "other tobacco
products"; however, the tobacco industry has successfully argued
against taxation due to lack of identification of ESPs, or
vapes, in statute. She stated that Alaska has been very
successful in decreasing the rate of youth combustible tobacco
smoking. This approach has been accomplished with a three-
pronged approach: a tobacco tax on traditional
cigarettes/tobacco products, the creation of a statewide tobacco
control and educational program, and the creation of youth
cessation programs. Representative Hannan offered her belief
that vape products are targeted at youth populations. She
commented that there has been a "huge increase" in young people
consuming nicotine via introduction through ESPs. She concluded
that vapes are not regulated in the same way that cigarettes
are; therefore, there is a lot of variability in the products.
4:41:35 PM
HUNTER MEACHUM, Staff, Representative Sara Hannan, Alaska State
Legislature, as staff to Representative Hannan, prime sponsor,
gave an introductory presentation on HB 49, and read the
sectional analysis. She used a PowerPoint [hard copy included
in the committee file], titled "House Bill 49: Restricting
Youth Access To Tobacco and E-Cigarettes," with accompanying
images. She stated that, according to the Department of
Health's (DOH's) Tobacco Prevention and Control program, tobacco
use is the leading preventable cause of death and disease in
Alaska. Over 100,000 adults in Alaska are at risk for poor
health outcomes due to tobacco products. Annually, an estimated
600 deaths in Alaska are attributed to smoking alone. She
stated that nicotine addiction almost always begins in
adolescence; therefore, it is the intent of HB 49 to protect at-
risk youth in Alaska. She noted that e-cigarettes/ESPs/vapes
emerged in the mid-2000s. Since 1994, there has been a decline
in traditional tobacco use from 37 percent to 8 percent among
high school students. The decline of traditional tobacco use
has occurred in concurrence with the explosion of e-cigarette
use. From 2015-2021, there was an increase in vaping from 18
percent to 26 percent in high school students.
MS. MEACHUM explained that most e-cigarettes consist of four
different components: a cartridge/reservoir, a heating element,
a power source, and a mouthpiece. She noted that ESPs can have
a variety of names, including e-cigarettes, e-cigars, e-pipes,
e-hookahs, and vape pens. She stated a battery is typically
used to heat up liquid containing nicotine and other flavor
additives, including butterscotch, bubblegum, cotton candy,
apple cinnamon, which is then inhaled into the lungs. She
stated that vapes can be designed to look like discreet,
everyday items, such as figurine toys, sharpies, pens,
highlighters, thumb drives, and watches. She noted that
advertisements marketing vapes saturate social media, and
companies showcase the "cool factor" of vapes by employing
influencers to increase the sex appeal and installing popular
children's games, like Pacman, in ESPs. Ms. Meachum stated that
the e-cigarette market is unregulated, and HB 49 would ban
marketing to children. Many brands have campaigns on social
media to associate vaping with having fun, relaxation, freedom,
and defiance. Additionally, vape competitions on platforms such
as YouTube are popular. She noted that children are vaping
during school bus rides, in bathrooms, locker rooms, hallways,
and classrooms in schools. There are tutorials on online
platforms, such as YouTube, instructing students how to avoid
detection devices that have been purchased to prevent students
from vaping in school. She stated that e-cigarettes are not
safe and can have lasting health consequences for the developing
brain and cardiovascular system. She concluded that e-
cigarettes are not a [healthier] replacement for cigarettes.
4:48:34 PM
The committee took a brief at-ease at 4:48 p.m.
4:49:12 PM
MS. MEACHUM continued to the sectional analysis of HB 49
[included in committee file], which read as follows [original
punctuation provided]:
Sec. 1: AS 11.76.100(a), relating to tobacco sales and
exchanges, makes it a violation to sell to persons
under age 21; however, the person making the sale at a
licensed location may be age 19 or older.
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 11.76.105, (a) relating to possession of
tobacco, electronic smoking products (ESPs), 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 health care professional, and given by a parent
or legal guardian.
(c) makes possession of tobacco, an electronic smoking
product, or a product containing nicotine by a person
under 21 years of age a violation punishable by a fine
not to exceed $300, or in lieu of paying a fine the
court may direct a defendant to take an educational
class on the harms of smoking.
Sec. 4: AS 11.76.105 (d) directs the court system to
establish a bail schedule for the violation referenced
in Section 3 above. Bail amounts may be forfeited
without a court appearance for a violation by a person
19 or 20 years of age.
(e) A mandatory court appearance is maintained for
minors under age 18.
(f) provides an exemption for persons aged 19-20, when
selling tobacco, nicotine products, or ESPs, to be
exempted from the prohibition of underage possession
of those products.
Sec. 5: 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 ESP sales, raising the minimum age to
sell from 19 to 21 years of age.
Sec. 6: AS 11.76.109(a), relating to other products
containing nicotine (OTP), including chew, gum,
patches, or E-cigarette products, makes it a violation
to sell, give, or exchange to persons under age 21;
however, the person making the sale at a licensed
location may be age 19 or older.
Sec. 7: AS 11.76.109(b), relating to exemptions to
selling, giving, or exchanging products containing
nicotine to persons under the age of 21, if the
product is FDA-approved, is prescribed by a doctor, or
given by a parent or legal guardian.
Sec. 8: 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.
Sec. 9: AS 11.76.109(g), relating to the penalty for
selling or gifting ESP or nicotine products to a
person under the age of 21 as a violation punishable
by a fine of not less than $300.
Sec. 10: 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.
Sec. 11: AS 29.35.085(c) conforming change relating to
community work provisions as punishment for a minor's
conviction of a violation of a curfew ordinance.
Sec. 12: AS 37.05.580(a) amends the Tobacco Use
Education and Cessation Fund to be moved from the
general fund into the state treasury.
Sec. 13: 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. 14: 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. 15: AS 43.50.105(c), relating to common carrier
transportation of cigarettes, to verify the age (21)
of the recipient before delivery.
Sec. 16: 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. 17: AS 43.50.190(d), relating to the Tobacco Use
Education and Cessation Fund, amends the structure of
the fund reflecting three revenue sources going into
the fund: (1) 20% 1/26/25; HB 49, version A
of the annual payment under the Tobacco Master
Settlement Agreement; (2) 8.9% of the general portion
of the state cigarette tax; and (3) the proceeds from
the new tax on electronic smoking products (ESPs)
established in section 17 of the bill.
Sec. 18: AS 43.50.325 adds a restriction on the
transportation of OTP 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 43.50.105, which applies only to cigarettes.
Sec. 19: AS 43.50 is amended by adding Article 8,
relating to ESP Sales, Shipping, Licensing, and
Taxation
AS 43.50.850(a) levies a 25 percent tax on the retail
sales price of closed-system ESPs and vapor products
in the state; and
(b) sets a threshold of 200 transactions annually, for
online vendors of ESP, to be licensed with the state
and begin remitting tax returns and payments.
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 that do not
contain nicotine.
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, 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 must
be available for DOR upon request.
AS 43.50.875 directs taxes collected on ESPs to be
deposited into the Tobacco Use Education and Cessation
Fund, which may be appropriated by the legislature to
provide for tobacco use prevention or for efforts to
prevent or detect the use of tobacco or ESPs in
schools.
AS 43.50.880 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 43.50.885 places restrictions on ESP vapor products
sold to consumers in the state to include: (1) a
nicotine concentration of no more than 50mg/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; and (5) clear labeling to
inform customers of all ingredients and nicotine
content.
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 provisions, 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, or components of ESPs to persons under the age
of 21 in the state.
Sec. 25: AS 45.50.471(b), relating to the marketing an
ESP in a manner likely to promote its use by a person
under 21.
Sec. 26: 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. 27: AS 11.76.100(e) is repealed. The statute is
an exemption for sales, and possession of cigarettes,
OTP and ESPs for incarcerated minors.
Sec. 28: Relates to applicability, conforming changes
in the bill.
Sec. 29: Sections 13, 16, 19, and 25 are effective
January 1, 2027.
Sec. 30: All other sections are effective January 1,
2026.
5:00:46 PM
CO-CHAIR HALL invited questions from committee members for the
bill sponsor or invited testifiers.
5:01:55 PM
REPRESENTATIVE NELSON stated there is a provision in HB 49 on
excluding tax on military installations. He asked whether there
would also be an age exemption for military individuals.
5:02:15 PM
REPRESENTATIVE HANNAN answered that the military is where the
Tobacco 21 (T21) provisions began. Currently, on military
bases, if a commissary sells tobacco, a consumer must be 21
years old to purchase said product; however, a consumer could
travel outside of the military base and purchase tobacco at 19
years old.
5:02:38 PM
CO-CHAIR HALL asked how HB 49 might help tobacco control and
enforcement.
5:03:28 PM
JOE DARNELL, Chief Investigator, Division of Behavioral Health,
Department of Health, as an invited testifier, answered
questions during the hearing on HB 49. He stated there are
three age-restricted products in Alaska: alcohol, marijuana,
and tobacco. He stated that bringing all age restricted
products to 21 would make it easier on retailers. He stated
that identification (ID) checks would be easier, as all
individuals over the age of 21 in Alaska are issued horizontal
ID, and all individuals under the age of 21 in Alaska are issued
vertical ID.
5:04:57 PM
REPRESENTATIVE CARRICK asked what the recently updated Alaska
Youth Risk Behavior Survey reported about electronic vapor use
among youth today.
5:05:24 PM
The committee took a brief at-ease at 5:05 p.m.
5:06:00 PM
KATIE STEFFENS, Deputy Program Manager, Tobacco Prevention and
Control Program, Department of Health, as an invited testifier,
answered questions during the hearing on HB 49. She responded
that the Tobacco Prevention and Control Program recently
collected data in 2023 for the Alaska Youth Risk Behavior
Survey. She reported that 17 percent of Alaska high school
students used e-cigarettes in 2023. Additionally, she reported
that this is a decrease from 2019, but that it is not considered
significant when considering long-term data. She emphasized
that one in six children in Alaska uses e-cigarettes and 23
percent of high school students in Alaska use some form of
tobacco product.
5:07:13 PM
REPRESENTATIVE CARRICK asked where the tax revenue generated by
HB 49 would go.
5:07:36 PM
REPRESENTATIVE HANNAN responded that the entirety of the tax
revenue generated under HB 49 would be put directly into the
tobacco cessation fund. She explained that the tobacco
cessation fund suffered the "reverse-sweep" problem. She noted
that the fund was swept and is currently substantially drained.
She stated the operating funds that typically roll over every
year are nonexistent. She stated that the goal of HB 49 would
be to add revenue from vape taxes into the fund in such a way
that the funds are not subject to the reverse-sweep vote
restrictions.
5:08:28 PM
CO-CHAIR HALL announced that HB 49 was held over.