Legislature(2023 - 2024)BELTZ 105 (TSBldg)
03/24/2023 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB89 | |
| SB51 | |
| SB93 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 89 | TELECONFERENCED | |
| + | SB 51 | TELECONFERENCED | |
| *+ | SB 93 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 89-AGE FOR TOBACCO/NICOTINE/E-CIG; TAX E-CIG
1:34:02 PM
CHAIR BJORKMAN 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."
This was the first hearing of SB 89. Chair Bjorkman invited
Senator Gary Stevens to introduce his bill.
1:34:48 PM
SENATOR GARY STEVENS, District C, Alaska State Legislature,
Juneau, Alaska, Sponsor of SB 89, paraphrased from the following
sponsor statement:
SPONSOR STATEMENT
SENATE BILL 89
Increasing the Minimal Age for Tobacco and E-
Cigarettes: "T-21"
Senate Bill 89 proposes two key policies: 1) to align
state law with federal law in raising the minimum age
to buy, sell or possess tobacco and electronic smoking
products (ESPs) from age 19 to 21; and 2) to establish
a sales tax for ESPs.
In December 2019, Congress passed and the President
signed into law a provision raising the age of sale
for all tobacco, nicotine and ESP products to age 21
nationally *with no exceptions*.
Preventing illegal vendor sales is a critical part of
the overall effort to prevent and reduce youth
smoking. Alaska has an active underage sales
enforcement program which has been effective in
reducing sales of smoking products to minors. Updating
Alaska statutes from 19 to 21 to mirror the federal
minimum age of sale of these products will allow the
state enforcement program to be effective.
The latest Tobacco Facts 2022 Update issued by the
Alaska Dept. of Health, Division of Public Health
shows an increasing trend among young Alaskans in high
school, indicating 26 percent of the statewide
population as active users of ESPs in 2019 alone, and
46 percent of students having "tried" ESPs. Those
statewide figures, along with national ones, are
projected to have grown substantially since then.
Despite claims that e-cigarettes help adults quit
smoking, or offer adults a "safe" alternative to
smoking tobacco, ESPs are under-regulated and have not
been found by the Food and Drug Administration (FDA)
to be effective in helping smokers actually quit, let
alone to be legitimately "safe." Nearly all e-
cigarettes contain some amount of nicotine, and some
contain as much or more nicotine as a pack of
cigarettes. It is not yet known with any certainty
what other compounds these vapor products are
delivering into users' airways, let alone the long-
term effect these products have on human health.
Meanwhile, taxes have been proven to reduce youth
tobacco use, resulting in fewer kids becoming lifelong
smokers, and thus ultimately reducing healthcare
costs. In addition to deterring kids from beginning to
use these products, taxes help adults who actually
want to quit, do so.
Thank you for your consideration of this important
piece of legislation.
1:37:36 PM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, Juneau, Alaska, gave a presentation on SB 89.
MR. LAMKIN began the E-Cigarette presentation with slide 1, with
the explanation that SB 89 would align Alaska's state law with
federal law.
E-cigarettes, emerged in the United States in 2005-2007, though
they were originally patented during WWII. The decline of
cigarette use has since caused the e-cigarette market to
explode. He described the components of an e-cigarette,
explaining that a battery is used to heat up a liquid containing
nicotine, flavoring, and a broad swath of chemicals. Users
inhale the aerosol into their lungs. E-cigarettes typically
consist of a few basic parts: a cartridge or reservoir, a
heating element such as a battery, and a mouthpiece.
A substantial part of the market consists of closed-unit e-
cigarettes, intended to be used and then thrown away. These
disposable e-cigarettes are inexpensive and readily available in
convenience stores. Open-unit e-cigarettes can be taken apart
and the components are replaceable and customizable.
MR. LAMKIN advanced to slide 2, Cigarette Marketing. He said
e-cigarette manufacturers have secured their position in the
foreseeable market by using old tobacco marketing techniques.
Promoting the modern e-cigarette by mirroring fashionable
vintage tobacco advertisements has been exceedingly effective.
These marketing methods are unregulated. For instance, unlike
tobacco, e-cigarette commercials play freely on public radio
stations. Marketing tactics include highlighting celebrity use
of e-cigarettes, also known as vaping, aligning the product with
sex appeal and coolness.
MR. LAMKIN advanced to slide 3, Social Media -
Instagram/Twitter/YouTube. He explained that e-cigarette
companies manage a wide and diverse network of brand promotions
and campaigns across popular social media platforms. This kind
of messaging from influencers has resulted in a substantial
population of parents and kids who believe that these products
are safe.
MR. LAMKIN advanced to slide 4, Recent Confiscations. The
slide provided images, and he brought examples of confiscated e-
cigarette products, to illustrate their portability and ease of
discretion. In addition, he recently surveyed educators about e-
cigarettes to gather a sampling of raw data on the public
consensus and found that e-cigarette use is a problem across the
state.
1:45:32 PM
MR. LAMKIN advanced to slide 5, Sample Disposable Vaping
Product Pricing - January 2023.
1:45:58 PM
MR. LAMKIN advanced to slide 6, Cigs in a Pod. He discussed
how e-cigarettes compare to traditional cigarettes. The average
price of a pack of cigarettes was $16. There are 7.5 puffs per
cigarette, so there are 150 puffs in a pack of 20 cigarettes.
The inherent value of smoking is the satisfaction of inhaling
each puff; that value is then quantified at 11 cents per puff.
E-cigarettes can have 1900-5000 hits in a single pod. In a JUUL
pod, which sells for $24, one puff is 2 cents. When purchased
online that drops to 0.5 cents per puff. Though some may argue
that this tax might be too high, he posited that it may not be
high enough.
1:48:59 PM
MR. LAMKIN advanced to slide 7, 1994 The "Waxman Hearings."
After 50 years, the leading CEOs in the United States stood up
under oath on record before Congress and avowed that nicotine
and tobacco products were neither addictive nor harmful to
consumers.
Tobacco and e-cigarette industry manufacturers are presently
claiming that their products are safe, non-addictive, and non-
toxic.
He said that e-cigs might be a pathway to quitting smoking
traditional cigarettes. However, these e-cigarettes are not
outright safe and do not end addiction; they merely replace the
delivery system.
An 18-year-old can join the military, but cannot use tobacco or
e-cigarette products on the base; recruits need to be healthy
enough to perform physical activity without losing their breath.
MR. LAMKIN relayed a personal story about his father passing
away from lung cancer, intimating that he wanted to protect his
son from the same fate.
1:52:12 PM
SENATOR DUNBAR commented that when the Anchorage Assembly passed
a similar ordinance, there were 19- and 20-year-olds who were
going to be put out of work. He asked Mr. Lamkin whether a 19-
year-old who worked at a gas station that happened to sell e-
cigarettes would lose their job if SB 89 passed.
1:53:24 PM
MR. LAMKIN referred to the text on page 22, lines 19-22 and
said, grandfathering is specifically included in this bill as a
result of a compromise.
SENATOR DUNBAR offered his understanding of the answer.
MR. LAMKIN clarified that employees of establishments that sell
e-cigarettes and tobacco products who are 19 and 20 years old on
the date the bill becomes effective may continue working at
those jobs.
SENATOR DUNBAR asked if that was only for the tobacco shops or
all places that may sell these products.
MR. LAMKIN answered yes, however, when a vendor sells these
products, especially with alcohol sales, a manager will step in
to execute the transaction.
1:55:10 PM
CHAIR BJORKMAN segued to invited testimony.
1:55:41 PM
KAREN BLOXSOM, Assistant Principal, Wasilla High School,
Wasilla, Alaska, offered invited testimony on SB 89, declaring
that the number of students caught vaping or in possession of a
vape is on the rise each year. Students start to vape in middle
school and are addicted by the time they are first-year students
in high school. The Wasilla Police Department has given out 31
citations for students caught vaping. Students in the Mat-Su
school district who are caught vaping a second time are given a
$500 citation.
More students are choosing to get nicotine from vapes because of
the flavoring. They do not realize they are inhaling more
nicotine in a day from a vape than if they smoked a pack of
cigarettes. Most students tell her that they would never smoke
cigarettes, but they would use a vape or an e-cigarette if there
weren't the threat of citation.
1:57:35 PM
KATIE STEFFENS, Deputy Program Manager, Tobacco Prevention
Control Program, Division of Public Health, Department of
Health, Anchorage, Alaska, offered invited testimony on SB 89,
speaking to how tobacco and nicotine products affect Alaskan
youth and proven strategies for preventing youth from starting
use of such products and reducing their current use.
Tobacco is the leading cause of preventable death in Alaska.
Smoking is linked to about 600 deaths each year. Alaska loses an
estimated $400 million because of smoking-related illness
effects on workers unable to perform their duties.
There is an ongoing epidemic of e-cigarette use. According to
the 2019 Alaska Youth Risk Behavior Survey, one out of four high
school students in Alaska were using e-cigarettes and almost
half had tried them. Only one in twenty adult Alaskans use these
products. The National Youth Tobacco Survey indicated that in
2022, 2.5 million youths nationwide were using e-cigarettes.
During the 2021-22 school year, there were 964 tobacco-related
suspensions among students in grades 1-12. The number of
suspensions has increased 232 percent since the 2015-16 school
year.
She stated that increasing the price of tobacco products is the
single most effective way to prevent initiation and reduce
consumption. Young adults are more likely to respond to price
increases on tobacco products, which prove even more effective
when implemented in combination with other strategies such as
increasing the minimum legal age to purchase tobacco and e-
cigarette products.
She stated that SB 89 includes both approaches and creates
additional protection for youth by restricting online sales,
implementing age verification when transporting products, and
limiting nicotine content in e-cigarette devices.
2:01:12 PM
JOE DARNELL, Chief Investigator, Tobacco Enforcement Program,
Division of Behavioral Health, Department of Health (DOH),
Anchorage, Alaska, offered invited testimony on SB 89. Pulling
from his field experience, he posited that the state should
increase the minimum legal age for using tobacco products from
19 to 21 to make the law fair to retailers. Some retailers are
opting not to enforce the federal age requirement that e-
cigarette purchasers be 21 years of age; they are only enforcing
the state law at 19 years of age. Increasing the minimum legal
age would also make it easier for retailers to verify
identification. State driver's licenses are set up so that if
the holder is over 21 the license has a horizontal layout; a
vertical layout gives them heads up to thoroughly check the
identification.
The division collaborates with schools around the state. He
received a call from Dillingham saying that there is an increase
in vape products. A state trooper told him that schools on
Prince of Wales Island are being inundated with vape products
and they dont know what to do with them.
He emphasized the importance of getting together the key
stakeholders, such as the legislature, national partners,
schools, and retailers. He said it comes down to working
together to protect Alaska's youths.
2:04:10 PM
BRANDON SPANOS, Deputy Director, Tax Division, Department of
Revenue (DOR), Anchorage, Alaska, provided an explanation for
DOR's fiscal note for SB 89. The tax would generate $3.2 million
in FY24, and $3.3 million in FY25. The division anticipates
growth in the market. He explained that the cost to implement
the tax is high because SB 89 is a new kind of bill and
additional personnel will be required.
2:06:20 PM
CHAIR BJORKMAN asked him to speak about the ease of using the
point-of-sale system to implement the tax on the retail level.
MR. SPANOS replied that most retailers would have point-of-sale
software that includes a tax line. The retailer would insert the
tax rate for the product, the software would calculate the tax,
and the retailer would collect the tax. The department's online
system is robust and by January 2024 taxpayers will be able to
file tax returns online, including new taxes like this one.
2:07:59 PM
CHAIR BJORKMAN announced the committee will not take public
testimony or hear the sectional analysis today. He held SB 89 in
committee.