Legislature(2023 - 2024)DAVIS 106
05/04/2023 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB176 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 176 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 176-AGE FOR TOBACCO/NICOTINE/E-CIG; TAX E-CIG
3:04:32 PM
CHAIR PRAX announced that the only order of business would be
HOUSE BILL NO. 176, "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."
3:05:04 PM
REPRESENTATIVE SARA HANNAN, Alaska State Legislature, as prime
sponsor, introduced HB 176. She stated that the proposed
legislation would protect children from nicotine addiction and
restrict the sale of nicotine products to young people. She
reported that the cigarette and nicotine industry has
acknowledged the decline in usage of traditional cigarettes,
which resulted in the new option of e-cigarettes. She suggested
that e-cigarettes are marketed to appeal to a wide range of
consumers, especially young consumers. She continued that
nicotine companies have designed most e-cigarettes to be colored
and flavored like fruit or candy, which makes it more appealing
to young consumers and for easy covert consumption. She
acknowledged that adults use e-cigarettes to reduce the use of
nicotine; however, the Food and Drug Administration (FDA) has
not approved e-cigarettes as a smoking cessation device. She
argued that instead e-cigarettes act as an attractive form of
nicotine delivery.
REPRESENTATIVE HANNAN stated that HB 176 would prevent nicotine
addiction from occurring in the first place by raising the legal
age for the purchase and possession of tobacco products,
including e-cigarettes, to 21. She stated that the proposed
legislation would also introduce a state sales tax of 25 percent
on electric nicotine. She reported that e-cigarettes are the
only tobacco product not currently taxed by the state. She
explained that taxes have been proven to reduce youth tobacco
use. She expressed the hope that the tax would dissuade youth
from initial use and inspire them to quit if already addicted.
She said that HB 176 would make Alaska's tobacco laws consistent
with the state's laws restricting alcohol and marijuana. It
would also make the tobacco laws consistent with military
policies, federal law, K-12 school policies, and the state's
public health goal of reducing tobacco. She emphasized that
this action is needed to protect young Alaskans from the
potential of a lifelong nicotine addiction.
3:08:58 PM
TIMOTHY CLARK, Staff, Representative Sara Hannan, Alaska State
Legislature, on behalf of Representative Hannan, prime sponsor,
gave a PowerPoint presentation, titled "HB 176 Restricting Youth
Access to Tobacco and E-Cigarettes." Comparing how cigarette
and vaping products are marketed, he showed marketing campaigns
for tobacco products on slide 2. He pointed out that there is
an obvious focus on youthfulness in both kinds of marketing. He
continued to slide 3 to discuss how vaping culture has become
normalized across social media, and he showed examples from
Instagram and YouTube, which he described as encouraging vaping
among young people.
MR. CLARK showed images on slide 4 of the many devices collected
from recent school confiscations and emphasized their toy-like
and colorful appearance. He stated that these devices are being
cleverly designed to avoid detection, and he pointed to a
picture of a vaping device disguised as a watch. On a series of
images on slide 5, he compared the cost and number of hits of
various e-cigarettes. He reported that even devices that cost
less would deliver a substantial amount of nicotine. He
explained a graphic on slide 6, which showed that each milligram
of nicotine in a vaping device is equivalent to one traditional
cigarette.
3:15:00 PM
MEGAN BOELTER, Western Regional Director, Preventing Tobacco
Addiction Foundation, provided invited testimony on HB 176. She
explained that over the past two decades the foundation has
worked with many health and state agencies across the country to
develop similar policies as HB 176, such as tobacco retail
licensure and point of sale requirements. She pointed out that
similar bills have been implemented in Alaska before, but the
state is still 1 of 11 states that do not have a "Tobacco 21"
law, which federally restricts tobacco usage for those under 21
years old. She explained that HB 176 would hold noncompliant
retailers accountable for illegal tobacco sales, rather than the
youth. She reported that many state and local school boards
have lawsuits against the leading vape company, Juul, and these
are associated with youth tobacco use. She explained that these
lawsuits have revealed that predatory and deceptive marketing
practices are used to target young people.
MS. BOELTER reiterated that HB 176 would align with existing
federal law by raising the legal age of sale from 19 years old
to 21 years old. She explained that the law also ties federal
substance abuse treatment funds to meeting a compliance
threshold. She warned that Alaska would have a high retail
compliance rate to insure the continued receipt of these grants.
She continued that the proposed bill would also be consistent
with the Department of Defense's policy on military base sales
of tobacco, and the state's policy, which prohibits selling
tobacco and e-cigarettes to anyone under 21. She reported that
studies have linked tobacco use to scholastic under performance
and mental health issues, including depression. She stated that
it has been repeatedly shown that if someone has not become
addicted to nicotine before the age of 21, it would be very
unlikely in the future.
MS. BOELTER argued that point of sale restrictions would be the
most effective way to decrease tobacco use in youth, as a recent
study has shown this reduces the use of vaping devices across
all grade levels by almost 50 percent. She reported that
surveys show Alaskan teenagers have increased vaping from 18
percent in 2016 to 26 percent in 2019, with the COVID-19
pandemic exacerbating the issue. She explained that a recent
study shows that over 40 percent of youth procure e-cigarettes
from retail stores, despite opponents to the bill claiming that
the retail sources are not significant. She argued that because
Alaska law still permits 18-year-olds to purchase e-cigarettes,
it can be classified as a retail source when someone under 18
gets a vaping device from an of-age friend or colleague. She
reiterated that FDA has never approved any electronic smoking
device as a cessation method, as there is not enough evidence to
support any industry claims that e-cigarettes help individuals
to quit smoking; however, there is a growing amount of evidence
to support the contrary. She reported that the Air Force
Surgeon General has said that tobacco use degrades air force
readiness and health and leads to preventable health care costs.
She asserted that a license to sell harmful products is a
privilege, not a right, and it comes with the responsibility to
act in accordance with protections, including the restriction of
sales to those under 21 years old.
3:20:16 PM
REPRESENTATIVE SUMNER questioned why the proposed age
restriction is 21 years old.
MS. BOELTER responded that the brain continues to develop up to
the age of 25 and is particularly vulnerable to nicotine while
in development. She agreed that it would be beneficial to raise
the legal age to 25; however, it is unlikely to happen since in
significant portions of state and federal law, minors are
defined as people under 21 years old.
3:21:15 PM
REPRESENTATIVE SUMNER, other than the age restrictions on
alcohol and nicotine, asked which sections of federal law define
a minor as under 21 years old.
MS. BOELTER stated that HB 176 would be dealing directly with
the definition of a minor in respect to regulations for
nicotine, and under federal nicotine restrictions, a minor is
defined as someone younger than 21 years old. She noted this is
true for alcohol as well.
3:22:19 PM
REPRESENTATIVE MCCORMICK asked when and why the legal age for
purchasing tobacco products became 21 years old.
REPRESENTATIVE HANNAN reported that in 2019 [Tobacco 21] was
signed into federal law to increase the age restriction.
3:23:08 PM
KATIE STEFFENS, Deputy Program Manager, Tobacco Prevention and
Control Program, Division of Public Health, Department of Health
(DOH), provided invited testimony on HB 176. She warned that
the progress made to reduce tobacco use in Alaska has been
threatened by the rising use of e-cigarettes by youth. She
reported that one out of four high school students in Alaska use
e-cigarettes, and this is in comparison to one out of twenty
adults. She stated that while the national surveys have shown a
decline in tobacco use in recent years, there are no current
estimates for Alaska. She referenced that data shows students
are being suspended from schools in Alaska for use or possession
of tobacco or e-cigarettes while on campus, with 964 suspensions
during the 2021-22 school year. She stated that this is an
increase of 232 percent since the 2015-16 school year.
MS. STEFFENS asserted that implementing a comprehensive
prevention plan has been proven to reduce consumption, and
raising the cost of tobacco products has proven to be the single
most effective strategy, as youth are two to three times more
likely [than adults] to respond to price increases. She stated
that the effectiveness of raising costs increases when combined
with other strategies, such as raising the minimum legal age.
She reported that raising the age to 21 years old is estimated
to reduce youth smoking rates by 12 percent. She noted that
most youth access tobacco through social sources and posited
that increasing the legal age of possession would weaken the
opportunities for access. She explained that HB 176 would apply
these proven strategies, as well as a restriction on online
sales and a requirement for age verification when shipping and
transporting tobacco. She stated that HB 176 would lead to
better health outcomes for Alaskans.
3:26:29 PM
REPRESENTATIVE SUMNER shared that statistics from the Center for
Disease Control (CDC) indicate those who live under the poverty
line with higher rates of smoking have an overall reduction in
life expectancy. He inquired about the possible economic
implications of the proposed bill, pointing out that the
increase in cost could be a regressive tax, burdening the
poorest in our society. He noted that the contributing factor
with the strongest correlation for life expectancy is
socioeconomic class. He posited that instituting a tax on
cigarettes could cause those below the poverty level to become
even poorer, which could in turn decrease life expectancy even
more. He asked whether any economic analysis has been done on
this impact.
MS. STEFFENS spoke to the issue from the public health
perspective. She stated that tobacco use is regressive, with
those most affected by the consequences of tobacco use being
people in lower income categories. She reiterated that evidence
has shown that higher costs of tobacco would lead to better
health outcomes overall. She deferred to the Department of
Revenue, Tax Division for an economic evaluation.
3:28:42 PM
REPRESENTATIVE SUMNER questioned the direct correlation between
past tax increases on tobacco and increased life expectancy.
MS. STEFFENS referred to DOH's website about the correlation
between the history of tax and price increases and the reduction
in tobacco use in the state. She stated that she would report
back to the committee with this information.
3:29:35 PM
REPRESENTATIVE MINA, concerning price increases being a
deterrent to youth tobacco use, noted that the bill would create
a fine for youth possession. She questioned any evidence which
shows this would be successful at motivating tobacco cessation.
MS. STEFFENS reported that there is no strong evidence in
research which shows this. She pointed out that another option
could be having those caught with tobacco participate in an
educational program. She explained that there are already many
organizations in Alaska providing education and resources, which
could include cessation programs to these students.
3:30:59 PM
REPRESENTATIVE MINA asked how much the current fine for underage
smoking is and how frequently the fine is enforced.
REPRESENTATIVE HANNAN deferred the question to the head of the
Tobacco Enforcement and Education Program.
3:31:58 PM
CHAIR PRAX asked whether the sale of vaping products to children
under 18 is currently prohibited.
MS. STEFFENS replied that the sale of e-cigarettes to those 19
years old and younger is prohibited under current state law.
CHAIR PRAX asked whether the health effects associated with
vaping are correlated at the same rate as tobacco, especially
concerning the reduction in deaths seen from reduced use.
MS. STEFFENS replied that research is still being conducted on
the health effects of vaping. She added that the high nicotine
content in e-cigarettes is the main concern, and this is because
of the physiology of nicotine use. She explained that when
nicotine molecules enter the brain they connect to receptors
[for creating neurotransmitters like serotonin]. She reported
that as a person's nicotine usage increases, additional
receptors are created, especially in still developing brains,
and this makes the addiction stronger. She stated that the main
health concern specific to vaping for youth is the amount of new
neural pathways being developed by the nicotine, which sets up
youth for long-term nicotine addiction.
3:34:49 PM
CHAIR PRAX asked whether there is any conclusive evidence on the
health risks associated with vaping.
MS. STEFFENS offered to prepare a more in-depth report for the
committee. She stated that there is evidence that vaping
effects the cardiovascular system and mental capabilities
associated with learning, like concentration and impulse
control. She mentioned that data from the [Poison Hotline]
indicates most calls received for nicotine poisoning are related
to youth consumption. In response to a follow-up question, she
confirmed that the calls were about nicotine poisoning from e-
cigarettes.
CHAIR PRAX shared his concern about the health effects from the
overuse of cell phones. He opined that this would be more
negative than vaping. He argued that society may be focusing on
the wrong thing. He inquired about any research into the
negative health effects of cell phone usage.
MS. STEFFENS responded that there are many addictive things in
our society; however, this focus is on nicotine. She offered to
investigate the issue with DOH.
3:37:24 PM
REPRESENTATIVE FIELDS asked whether there was a distinction in
nicotine addiction rates between rural and urban areas.
MS. STEFFENS replied that the data is broken down regionally and
e-cigarette usage is fairly similar across the state. She noted
that some tobacco products have a concentrated use in some
regions.
REPRESENTATIVE FIELDS referenced Alaska Native Tribal Health
Consortium's (ANTHC) robust tobacco cessation efforts. He
questioned what could be taken from this effort about using e-
cigarettes to reduce nicotine consumption.
MS. STEFFENS stated that the Tobacco Prevention and Control
Program (TPCP) works closely with ANTHC, as it is one of TPCP's
grantees. It also works with ANTHC's epidemiology team to
review and compare data, which allows TPCP to make decisions on
how to move forward on tobacco cessation issues for all of
Alaska. She shared that TPCP has learned a great deal through
its partnership with ANTHC.
REPRESENTATIVE FIELDS requested a follow-up to the committee on
what exactly TPCP has learned from ANTHC's programing and data.
3:39:35 PM
REPRESENTATIVE RUFFRIDGE noted that the devices used to deliver
nicotine can also be used to deliver tetrahydrocannabinol (THC),
which is derived from cannabis. He questioned whether there is
the same concern for controlling youth access to cannabis.
REPRESENTATIVE HANNAN responded that cannabis is already
restricted to those who are 21 years old and under, and it is
taxed. She explained that HB 176 would bring Alaska's nicotine
laws into compliance with federal age restrictions and add a tax
to vaping products, which are the only tobacco products
currently not taxed. She stated that because vaping products
are relatively new, they were not included in tax laws for
nicotine. She explained that when cannabis was legalized in
Alaska, all forms were put into tax code at the same time,
including vaping; therefore, the preventative measures of age
restriction and taxation already apply to cannabis.
REPRESENTATIVE RUFFRIDGE expressed the opinion that the age
restriction and taxation do not appear to be preventing youth
from using vaping devices for cannabis. He questioned any data
showing the correlation between these preventative measures and
youth cannabis use.
REPRESENTATIVE HANNAN replied that she does not have data on
youth cannabis use, as her focus of the proposed bill is to
institute a tax on the area of tobacco not taxed. She stated
that this would bring Alaska into compliance with federal age
restrictions. She shared the belief that passing the law would
not stop the behavior completely. She gave the example of
alcohol, which has been illegal for youth for a long period of
time, yet there is still underage consumption. She expressed
confidence in the evidence that taxation would help deter or
delay nicotine because of price sensitivity.
3:43:21 PM
REPRESENTATIVE SUMNER pointed out that one of the goals of HB
176 is to achieve taxing parity between e-cigarettes and other
forms of tobacco. He questioned whether this could
unintentionally influence product preference and cause people to
choose conventional cigarettes, which are potentially more
harmful than e-cigarettes.
REPRESENTATIVE HANNAN, based on a 30-year history of teaching
teenagers, expressed the belief that making vaping more
expensive would not cause youth to choose combustible cigarettes
instead. She explained that the social perception of the
dangers of smoking [combustible cigarettes] has changed
overtime, as the correlation between cigarettes and health risks
and disease have become more documented and widely publicized.
She shared her belief that for most teenagers the risks
associated with tobacco use are linked to combustible cigarettes
rather than nicotine addiction. She contended that the nicotine
industry shifted its marketing to take advantage of the fact
vaping does not have the same stigma of association with
disease. She argued that taxing e-cigarettes at the same rate
as other tobacco products is not unreasonable and would not lead
to youth choosing other forms of tobacco over vaping.
3:45:55 PM
REPRESENTATIVE SUMNER asked which would be more effective for
cessation efforts - the social stigmatization of combustible
cigarettes or taxation.
REPRESENTATIVE HANNAN shared her belief that it would be a
combination of the two. She continued that the 50 years of
advocacy to counteract marketing campaigns, in combination with
nationwide policies, have produced the steady decline in the
consumption of traditional cigarettes. She posited that the
increase in youth vaping rates is because it does not share the
same stigma. She reiterated the belief that this is in part
because how vaping is marketed. She emphasized that the
government's response to the health risks from combustible
cigarettes has included extensive education, campaigning, and
increased taxation.
3:48:06 PM
REPRESENTATIVE SUMNER referenced the elevated rates of teenage
binge drinking in the United States in comparison with Europe,
even though Europe has a less restrictive age limit. He posited
that age restriction and taxation may be taking the wrong
approach. He suggested that with substances like alcohol and
nicotine a sociological approach would be more effective.
REPRESENTATIVE HANNAN opined that this idea is looking at a
broader issue, and she reiterated that the proposed legislation
would only address a tobacco tax parity issue. She reiterated
that e-cigarettes are the only form of tobacco not taxed, and
Alaska is 1 of 11 states that has yet to comply with the federal
Tobacco 21 law. She posited that the underlying question being
asked is whether prohibition works. She expressed the opinion
that it does not, but limiting access may reduce or change
consumption habits. She emphasized that she is not trying to
address all vices, and the focus is on e-cigarettes and the
marketing. She posited that although the dangers of vaping are
probably different than those associated with traditional
cigarettes, e-cigarettes are not necessarily any safer, as they
are fundamentally a tobacco product and should be taxed like all
other tobacco products.
3:50:35 PM
REPRESENTATIVE RUFFRIDGE shared his reticence about using the
tax structure as an incentive to stop smoking, and this is
because data shows that 26 percent of high school students use
tobacco products and 23 percent use marijuana products. He
argued that whether taxed or not, youth will continue to gain
access to prohibited substances. He opined that the bill would
bring e-cigarettes in parity with other taxed products; however,
it would most likely not reduce the usage rates.
REPRESENTATIVE HANNAN reported that there are repeated findings
that show early consumers are price sensitive; therefore,
increasing the cost of e-cigarettes by adding a tax would reduce
attractiveness to children who have never smoked. She
acknowledged that it is unclear if a price increase would be as
effective to a person who is already addicted. She clarified
that the intent of the bill concerns the parity with other
tobacco products, not with alcohol or cannabis.
3:52:56 PM
CHAIR PRAX questioned whether federal law prohibits the taxation
of any goods on military bases.
REPRESENTATIVE HANNAN confirmed that the state cannot impose a
tax on military bases, so the tax proposed in HB 176 would not
be in place at military installations.
CHAIR PRAX shared that when he was in high school, there was a
more prominent youth smoking culture, and he witnessed many
students procuring cigarettes through sources on military bases.
He questioned whether the addition of a tax would encourage a
"black market" procurement in Alaska.
REPRESENTATIVE HANNAN deferred the question to Joe Darnell.
3:55:40 PM
JOE DARNELL, Chief Investigator for the Tobacco Enforcement and
Youth Education Program, Division of Behavioral Health,
Department of Health, deferred the question to the Department of
Revenue (DOR), as it would be better suited to answer questions
about the effectiveness of tax increases. He reported that for
tobacco retailers, the federal age limit is 21 years old, and
FDA does compliance checks on this; however, in Alaska the age
limit is 19 years old, so state enforcement agencies and
retailers are responsible for checking licenses for those under
this age. He explained that when a retailer is found by FDA to
be in violation, a warning letter is issued. In contrast, he
explained when a retailer is in violation of the state law, a
citation is issued, which then goes to court. If the court
finds the retailer guilty, the Division of Corporations,
Business and Professional Licensing could revoke the retailer's
endorsement to sell nicotine for up to 20 days. He suggested
that while most retailers are ensuring compliance with both
federal and state laws, there are some who choose not to comply
with federal law in order to "pick up" the market of 19- to 20-
year-olds. This is because if they are caught by FDA, there
would be no additional consequences after the warning letter is
issued. He expressed the belief that raising the state's age
limit to be federally compliant would level the playing field
for retailers. This would make checking identifications (IDs)
easier since the age limit would be the same for all age
restricted substances. He added that Alaska IDs are formatted
to have a visual distinction between those above and below the
age of 21 years old.
MR. DARNELL, in regard to Representative Mina's previous
question, stated that the current fine for youth tobacco
possession is set at $500. He expressed the opinion that this
is too high. He explained that HB 176 would clean up this
section of law by lowering the fine and allowing the offender to
complete an educational program in lieu of the fine. He stated
that there are many opinions about the effectiveness of fines,
but he opined that even if the fine does not directly change the
behavior, it could cause the parent of the offender to be more
involved and motivated to help the child. He reiterated that
the bill is intended to protect Alaskan youth. He acknowledged
that the data on the long-term side effects of vaping is still
being researched and definitive answers are slow to come. He
posited that if the data in 20 years shows there are no long-
term side effects, the state will not have lost anything;
however, if future data shows the effects of vaping are even
worse than traditional smoking, and no protections were put into
place, this would be a big loss.
4:00:40 PM
REPRESENTATIVE FIELDS asked what the average price that youth
are paying for e-cigarettes.
MR. DARNELL responded that the average price is between $10 to
$15 for disposable vaping units. He reported that buying "e-
liquid" [for a reusable unit] can be between $5 and $40,
depending on the size of the cartridge and the percentage of
nicotine.
REPRESENTATIVE FIELDS questioned how underage people are getting
products and what the market for youth consumption looks like.
MR. DARNELL reported that the COVID-19 pandemic stopped his
department's ability to conduct compliance checks; therefore,
there is a two year "black hole" of data. He explained that
prior to the pandemic, in 2019, there was talk about adding
vaping products to the same restriction schedule as other
nicotine forms. At that time, he conducted an informal study in
Anchorage to see how easy it was for underage people to buy
vapes, and if it was an issue. He stated that he had 16- and
17-year-olds go into shops and attempt to buy a vaping product,
and it was reported that 50 percent of retailers made the sale.
He reported that after the initial study in Anchorage, the
department implemented statewide level study and found a 35
percent sell rate for vape shops. He reiterated that this study
was conducted prior to COVID-19 but it is the most recent data
available.
4:03:21 PM
REPRESENTATIVE SUMNER asked how many 19- and 20-year-olds may
lose their jobs if the age limit is raised because they are
currently working in businesses selling tobacco.
REPRESENTATIVE HANNAN expressed uncertainty. She explained that
the bill has a mechanism to raise the age of legal employees
over time, and this is so current employees are grandfathered
in, and no one would lose their job.
REPRESENTATIVE SUMNER restated the question.
REPRESENTATIVE HANNAN reiterated that she does not have this
data. She explained that vendors who have a federal tobacco
endorsement to sell products, such as combustible cigarettes,
are already required to employ 21-year-olds to comply with
federal law. She posited that there are vape shops that only
sell vape products and do not have the federal tobacco
endorsement; therefore, these shops do not have this
requirement.
4:05:28 PM
REPRESENTATIVE RUFFRIDGE asked how many tobacco retailers in
Alaska transitioned quickly to the new age limit when the law
changed in 2019, and he asked how many are still selling to
those [below the age of 21].
MR. DARNELL reported that most major national retailers
immediately switched policies to reflect the new federal age
limit. He added that it has taken about a year for local
retailers to fully comply. He stated that he works closely with
retailers to implement site inspections and ID training for both
owners and employees. He expressed the understanding that there
are only 10 to 15 retailers statewide that continue to sell
tobacco to people under 21. He reiterated that the stores in
violation of the federal law will only receive a warning letter
from the FDA and are not in danger of being shut down by the
state unless they sell to someone under 19 years old.
4:07:33 PM
REPRESENTATIVE RUFFRIDGE expressed the opinion that there seems
to be a "rush" for the state to comply with the federal age
limit for tobacco; however, marijuana is still illegal
federally, and the state has chosen to follow its own laws in
the sale of cannabis. He questioned what makes tobacco
different from marijuana in this respect.
MR. DARNELL stated that marijuana was legalized through a public
vote. This is different than tobacco; therefore, they are
regulated differently. He emphasized that the focus should be
on the intent of HB 176, which is to protect children from
nicotine addiction. He added that other state agencies would
address the separate issue of marijuana use in youth.
4:09:11 PM
CHAIR PRAX referred to testimony on another bill where people
from the marijuana industry had expressed the believe that the
high tax rate for marijuana renewed the demand for "black
market" marijuana. He posited that increasing taxes on vaping
products would encourage an increase in "black market" nicotine
sales. He asked whether Mr. Darnell had any experience with the
marijuana tax conversation.
MR. DARNELL replied that his only experience with marijuana
regulations is when vaporizers are used for cannabis. He added
that in a prior version of this vaping bill marijuana
dispensaries would have required to also have a tobacco
endorsement and be inspected by the state. He asserted that
because HB 176 would omit this requirement, he no longer has had
any interaction with marijuana regulations.
CHAIR PRAX restated his question about the possibility of a tax
on vaping resulting in a demand for products to be sourced from
military bases. He expressed the concern that taxing vapes at
the retail level would almost double the tobacco tax.
MR. DARNELL posited that most teenagers could find out which
stores would sell them age prohibited items, like alcohol and
tobacco, without going to military bases. He shared that when
he was Air Force Security there were not many instances of
tobacco or alcohol being bought on base and then resold. He
added that there were higher rates of this outside of the United
States.
4:13:14 PM
SCHELL HAMMEL, Legislative Director, Smoke Free Alternatives
Trade Association, provided invited testimony on HB 176. [This
testifier was not invited by the bill sponsor.] She testified
in opposition to HB 176. She shared her appreciation for the
advocacy for the prevention of youth addiction, but she opined
that the bill's parameters would do little to meet this goal.
Instead, she expressed the opinion that smokers would be
punished for using a less harmful smoking alternative. She
reported that CDC has found that 18 percent of Alaskans, or
almost 132,000 people, use combustible cigarettes, and the Royal
Council of Physicians has found that e-cigarettes are 98 percent
less harmful than combustible cigarettes. She posited that the
tax on vaping products would directly impact Alaskans who are
attempting to use a less harmful form of nicotine. She stated
that there is evidence that 80 percent of teens in the United
States procured vaping products from friends or family, and she
hypothesized that adding a tax to these products would not lower
the percentage, but it would negatively affect adults who
purchase e-cigarettes.
MS. HAMMEL shared that according to FDA there have been no
inspections of vapor retailers for youth purchases in Alaska
since 2020. She argued that if there is an issue with underage
access to nicotine, then the state should use the $10 million it
receives for education and prevention to carry out more
inspections. In further reference to FDA's inspection reports,
she stated that 95 percent of vape sales to minors occur in
convenience stores. She suggested that another alternative to a
sales tax would be requiring vape products to be sold only in
age restricted stores. She posited that this would lower
enforcement costs, as there would be less stores to inspect.
She brought forth several of her concerns with language in the
bill, opining that the ID requirements for delivery would open
communities up to identity fraud. She continued that the
restrictions on how to market e-cigarettes would be too broad,
as it is unclear who would be in charge. She compared the
psychology of a smoker to that of a person who struggles with
weight loss. She asked the committee to think of e-cigarettes
like diet food. She posited that people who choose to vape
rather than use other forms of nicotine should be encouraged, as
it could have a positive change to a person's overall wellbeing.
She emphasized that an alternative method for preventing youth
use should be found instead of a tax on "well intentioned
people."
4:18:27 PM
DAVID PARROTT, Owner, 5150 Vapes; member of the Smoke Free
Alternatives Trade Association, provided invited testimony on HB
176. [This testifier was not invited by the bill sponsor.] He
expressed agreement with the intent of HB 176 but testified
against the bill. He expressed the belief that protecting youth
from addiction is important; however, it would not be fair to
punish others for a crime committed by youth. He expressed the
understanding that vaping has been proven to be less harmful
than combustible cigarettes, so increasing the cost through a
tax would be a disservice to the community. He reported that
some vapes are being sold for $40 because of the municipal taxes
already in place. He pointed out that vape shops across the
state have had to shut down because of the high cost to
customers. He stated that the national average for a disposable
vape is $23, but if HB 176 were to pass, these prices could
increase to $50 in Alaska. He reported that most people who are
choosing to vape as an alternative to cigarettes have a tight
budget, as 23 percent of nicotine users live under the poverty
level. He argued that this makes the proposed tax highly
regressive, dissuading people from making a safer choice. He
asserted that the amount of nicotine in the typical disposable
vape is equivalent to a pack of cigarettes, but with the
proposed tax, it would be three times the cost. He shared that
many of his customers and friends have confided that they are
already struggling with being able to afford vaping as an
alternative to smoking. He posited that if there is an
additional tax, many of these people would return to smoking
traditional cigarettes.
MR. PARROTT argued that moving all nicotine substances to an age
prohibited location would help prevent underage purchases,
rather than a tax. He explained that a clerk in a convenience
store would be ill equipped to properly insure a customer is not
purchasing nicotine for a younger person. In contrast, he
reported that as the owner of a vape-only establishment, he can
give more attention to observing behavior and turning suspect
people away. He spoke about a previous bill that had
successfully passed the legislature [but was vetoed by the
governor] with a 35 percent wholesale tax. He argued that the
proposed legislation is different because all the tax burden
would be put on the consumer. He posited that the likelihood of
a bill with a higher tax getting signed by the governor would be
low, as the previous bill with less of a consumer burden was
vetoed. He stated that pursuing other options, like limiting
nicotine to age restricted shops, would help lower smoking rates
by offering current smokers less harmful products. This would
also ensure that the products are only sold to legal adults. He
shared his belief that the legislature and e-cigarette retailers
could work together to help fight smoking related illnesses. He
stated that he has personally seen the benefits of vaping in his
own life and asked the committee not to discourage more adults
from switching to a safer option.
4:23:02 PM
REPRESENTATIVE MCCORMICK noted that the committee is hearing
invited testimony and questioned whether the last two testifiers
had been invited by the bill sponsor.
REPRESENTATIVE HANNAN replied that she had not invited the last
two speakers.
4:23:35 PM
REPRESENTATIVE FIELDS questioned why these products are marketed
to children if the intent of the product is to help adults
switch from traditional cigarettes.
MR. PARROTT stated that he personally does not sell products
that are targeted towards youth. He stated that he has made the
point to not carry large brands like Juul, as they are owned by
"big tobacco."
4:25:11 PM
The committee took a brief at-ease.
4:26:17 PM
CHAIR PRAX sought clarification on the statement that nicotine
can cause depression. He opined that other life stressors
linked to depression could push a person to want to smoke.
REPRESENTATIVE RUFFRIDGE replied that there is long existing
evidence within the medical field that nicotine use over time
can cause the further decline of preexisting mental health
issues; however, why this happens is not fully understood. He
expressed the understanding that one of the primary concerns for
medical professionals when helping patients to stop smoking, is
the depression that can accompany the withdrawal from nicotine.
He pointed out the twofold occurrence of depression involving
the use of nicotine and getting off nicotine. He stated that
this has been well established in medical literature.
4:28:19 PM
REPRESENTATIVE MINA questioned how often the current fines on
youth are enforced.
MR. DARNELL responded that youth possession and use of nicotine
is primarily enforced by school resource officers, at the
request of the school. He explained that when a school
administrator has an issue with underage nicotine possession, it
is reported to a resource officer who would then write the
ticket. He expressed the understanding that there are multiple
vice principals from across the state who would speak to the
committee during the upcoming public testimony. He suggested
that these testifiers would have more information on the exact
process and its frequency.
4:29:45 PM
REPRESENTATIVE MINA noted that HB 176 includes an option for
enforcement between the fine or sending the defendant to court.
She asked how tobacco offences are currently enforced. She also
questioned how often youth would be referred to the tobacco
education program instead of being issued a fine.
MR. DARNELL replied that the only enforcement tool currently in
law is a fine of $500; he reiterated this is higher than it
needs to be. He shared his belief that the proposed bill could
do a good job of bringing down the fine and providing an
alternative to the fine. He reiterated that referrals to
education as an enforcement tool do not currently exist.
4:31:00 PM
REPRESENTATIVE MINA redirected her questions about enforcement
to Nancy Meade of the Alaska Court System.
4:31:24 PM
NANCY MEADE, General Counsel, Civil Division, Alaska Court
System, Department of Law, replied that she does not have data
on how many underage tobacco charges are filed and convicted.
She reported that the conviction rate for youth possession cases
has hovered between 30 to 60 per year, and she described this as
an uncommon conviction. She stated that underage possession
cases are enforced by state troopers and local law enforcement,
while DOH officers would enforce cases on negligent selling and
vending of nicotine to youth, as these officers have the
authority to issue citations directly to offending businesses.
She explained that the underage minor citations filed by law
enforcement currently include a mandatory court appearance. She
stated that HB 176 would change these citations to be mail-in
tickets, similar to a parking ticket.
4:33:02 PM
REPRESENTATIVE RUFFRIDGE inquired whether these charges are
typically singular charges or add-ons to a larger set of
charges.
MS. MEADE replied that the charges are generally standalone from
other charges, but they will often happen in batches. For
example, she explained that a principal will contact law
enforcement to do a "sting" for instances of underage smoking or
possession at the school, and the officers will charge many
students at one time. She reported that the 47 convictions last
year happened on one of three different days, exemplifying that
the data shows these charges are not enforced in the typical
fashion.
4:34:20 PM
MS. MEADE clarified that in current statute the possession [by
youth] of nicotine products is a violation punishable with a
fine of up to $500; however, this would not mean the fine is
always $500. She explained that the violations require a
mandatory court appearance, during which the judge can use
discretion in assigning a lesser fine. She stated that she does
not have the exact data on the average fine, but she posited
that when discretion is available to judges, it is often
exercised.
4:35:09 PM
REPRESENTATIVE MINA asked whether the committee could access the
data on what the actual fine amounts end up being.
MS. MEADE replied that the data on fines is not currently
compiled in any way and going through every court case to make
this data accessible would be difficult.
4:35:37 PM
CHAIR PRAX ask for clarification on the 20 to 40 individual
convictions a year on minor possession of tobacco or vaping
products.
MS. MEADE mentioned that current law refers to the violation as
the sale of any nicotine products, including e-cigarettes, to a
minor. She stated that the language in HB 176 would only change
this to those under 21 years old. She reiterated that the
convictions have ranged from 10 in 2018 to 60 in 2019. She
expressed the belief that the numbers fluctuate depending on the
year and how often law enforcement is asked to respond to
instances of minor possessions in schools.
CHAIR PRAX inquired about the statistics for illegal selling
violations.
MS. MEADE explained that there are very few cases of negligent
vending, and the citations are given by DOH officers instead of
law enforcement. She reported that over the last seven years
there have been between 2 and 31 cases a year of negligent
selling of nicotine to a minor. She explained that when these
cases are convicted, the offenders are referred to the licensing
board through the Department of Commerce, Community, and
Economic Development, and it would then take further action
either on the license itself or through civil penalties.
CHAIR PRAX referred to previous testimony that stated over 900
students had been suspended from school for smoking [in a single
year] and questioned whether any further action was taken for
these students.
MS. MEADE stated that the data shows that 900 charges were not
filed, as the total number of charges filed for a year ranged
between 15 and 80. She explained that there were more charges
filed than convictions because some charges get dismissed or
dropped.
4:39:03 PM
CHAIR PRAX asked Mr. Darnell to address the discrepancy between
the number of school suspensions and the number of legal
citations for possession of nicotine by a minor.
MR. DARNELL responded that the discrepancy exists because of
each school's individual policies for handling nicotine
possession. He reported that schools do not always bring in law
enforcement, as this would result in more suspensions than
written citations. He deferred the question to Ms. Steffens for
more detailed data and to the vice principals who will be
providing public testimony. He offered the understanding that
the vice principals would be able to highlight the issue of
protecting youth.
4:40:44 PM
REPRESENTATIVE RUFFRIDGE noted that the committee has seen data
on consumer habits that show as the price of tobacco increase,
sales decrease. However, he pointed out that the data is only
collected on persons who can legally access age prohibited
products. He speculated whether the price curve is as effective
on youth. He expressed the assumption that being more fiscally
responsible and concerned about spending habits would come with
age, and a 16-year-old may not care as much about the high cost
of nicotine as an adult does. He inquired about the existence
of any consumer data collected from youth rather than adults.
4:42:26 PM
BRANDON SPANOS, Deputy Director, Tax Division, Department of
Revenue, responded that in developing the fiscal note for HB
176, the Tax Division looked at the price elasticity for
nicotine. After consulting with an expert, it was found that
price elasticity was greater for youth than adults in the
nicotine market. In response to a question from Representative
Ruffridge on the meaning of "price elasticity," he deferred the
question to Ms. Steffens.
4:44:40 PM
MS. STEFFENS stated that TPCP has tracked data on the effects of
price on the rates of nicotine usage in minors since the 1990s.
She reported that around 1994 to 1995, 37 percent of youth
smoked tobacco, and it was not until 1997 that single packs of
cigarettes were included in tax law. She reiterated that a
combination of national anti-smoking campaigns, along with
addition of taxes, have caused the youth smoking rate to drop
from 37 percent to 8 percent.
4:45:39 PM
REPRESENTATIVE MINA pointed out the distinction between youth
that give someone of legal age their own money to purchase a
vape for them and those who have access to a vape by borrowing
or using products a family member purchased. She inquired
whether this data has been tracked.
MS. STEFFENS reported that statewide data shows the majority of
Alaska youth get vaping products through social sources.
Although the state data is not broken down to the specific
sources, she stated that the National Youth Tobacco Survey from
2021 found that 33 percent of students receive their product
from a friend, 31 percent bought the product themselves, 29
percent had someone buy the product for them, and 26 percent had
someone offer the product to them for free. She noted that
students receive their product in multiple ways and were able to
denote all these ways in the survey.
4:47:14 PM
REPRESENTATIVE FIELDS noted that in 2009 there was a substantial
federal tax hike on nicotine products which allowed academics to
extensively study youth and adult behavior in regard to nicotine
usage. He reported that a significant price elasticity of
demand for nicotine was found for youth, meaning that the rates
of youth who smoked decreased, while those who smoked before the
tax smoked less. He shared that the studies also showed an
increase in cessation efforts. He offered to circulate copies
of these studies to the committee members.
4:48:02 PM
REPRESENTATIVE RUFFRIDGE expressed the opinion that looking at
the national tax implementation makes it easy to see how youth
have behaved on a larger scale. He asked whether there is any
data that tracks Alaskan youth behavior since the Municipality
of Anchorage started taxing e-cigarettes several years ago.
REPRESENTATIVE HANNAN responded that she does not have this
data, but she would work to obtain this.
4:49:29 PM
REPRESENTATIVE FIELDS shared his interest in seeing any data
that compares youth nicotine usage between neighboring states
that are similar in socioeconomic factors, with the difference
being one has a high tax rate on nicotine, while the other does
not.
4:49:58 PM
REPRESENTATIVE MINA shared her understanding that HB 176 would
bring tax parity between e-cigarettes and other tobacco
products. She questioned whether there are any other states
that do not tax e-cigarettes.
REPRESENTATIVE HANNAN replied that she would investigate whether
any other states specifically do not tax e-cigarettes. She
expressed the understanding that Alaska's tax code is different
than other states. She explained that all states regulate
cigarettes separately because of federal guidelines, but most
states use the category of "tobacco" to include all tobacco
products, so any nicotine product would fall under the same tax
rate and citation. She suggested that this allows other states
to include e-cigarettes as a type of tobacco and tax them
accordingly. In comparison, she reported that Alaska has
specified each type of product in the state tax code. She
explained that when e-cigarettes were invented, because they
were not on the list, the industry claimed that e-cigarettes
could not be automatically taxed at the same rate as other
products.
4:51:35 PM
CHAIR PRAX questioned Mr. Spanos whether raising the tax on e-
cigarettes could create an underground market and whether there
is a tax threshold that would cause a rise in underground sales
of e-cigarettes.
MR. SPANOS reported that the tax division has not done research
on the black-market possibilities of the proposed e-cigarette
tax; however, it is aware of an existing black market for
tobacco products. He explained that when the division finds
products being sold "on the street" the tax still applies. He
anecdotally stated that it makes sense that when tax goes up the
demand for black market product increases, and the division had
similar conversations about how a tax would affect the black
market when marijuana was being legalized.
4:53:09 PM
CHAIR PRAX questioned whether DOR could research how the
proposed tax rate would affect the black market for e-
cigarettes.
MR. SPANOS responded that it would need to hire a contractor to
do this type of research.
4:54:06 PM
REPRESENTATIVE HANNAN thanked the committee for their
consideration of HB 176 and reiterated that the goal would be
protecting youth from developing unhealthy habits. She
expressed the belief that an e-cigarette tax, along with the
Tobacco 21 law, would accomplish the goal.
4:54:44 PM
CHAIR PRAX announced that HB 176 was held over.