Legislature(2019 - 2020)BELTZ 105 (TSBldg)
02/27/2020 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearings | |
| SB182 | |
| Presentation: Alaska Hire | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 182 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SB 182-AGE FOR NICOTINE/E-CIG; TAX E-CIG.
1:43:45 PM
CHAIR BISHOP announced the consideration of SENATE BILL NO. 182,
"An Act 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 providing for an effective date."
1:44:09 PM
SENATOR GARY STEVENS, speaking as sponsor of SB 182, stated that
this legislation is about protecting children from becoming
addicted to nicotine by restricting sales and possession of
various tobacco products to young people, including electronic
cigarettes. He said scientific evidence and public health
advocates have helped to put the use of traditional tobacco
products on the decline and tobacco manufacturers are responding
by offering new and more fashionable smoking options related to
e-cigarettes. These are designed to be particularly appealing to
young people. He said the claim that these products are safe is
simply not true and it is therefore important to act quickly to
protect young Alaskans who are being targeted.
1:45:46 PM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, Juneau, Alaska, began the presentation on SB 182
with a short video to demonstrate the importance of preventing
youth from accessing e-cigarettes because it is becoming an
epidemic.
MR. LAMKIN advised that the committee will hear that e-
cigarettes are not targeting youth, that e-cigarettes help
people quit smoking, that these products are safe and healthy,
and that taxation will kill the industry. He said he would
refute each claim.
He related that vaping started in the 1940s but it was not seen
as a fashionable form of smoking. The practice was revitalized
in the early 2000s and it entered the U.S. market in early 2007.
The federal government has scrambled to catch up with this
elusive industry since then. These largely unregulated products
contain five known chemicals. He displayed a slide to
demonstrate that these ultra-fine particles that form an aerosol
are inhaled into the lungs. He said it would be difficult to
suggest that they are safe. He noted that the benefits of
ingesting vitamin E have been demonstrated but inhaling it as an
aerosol is very harmful.
MR. LAMKIN said some people argue that the expense of these
products is a barrier to youth access. He refuted that claim by
displaying a depiction of a $50 JUUL starter kit and $4-$5
refillable cartridges. He said these products are advertised
with a multitude of flavorings but it's primarily nicotine that
keeps customers coming back. He displayed a slide showing
vintage advertising of tobacco products alongside current
advertising of vaping products. He pointed out that vapor
product marketing is largely unregulated. The next slides show
different celebrities and young people using e-cigarettes,
including Donny Smokes, a social media celebrity who is alleged
to receive $1,000 per post. He called it a "youth frenzy" as
demonstrated by the social media postings and videos such as "My
First Time Vaping With Friends!" and "BAD IDEA Vaping in front
of my mom for the 1st time." He noted that the latter had more
than 1.5 million views.
1:53:53 PM
MR. LAMKIN displayed a slide showing the wide array of flavors
that are available for vaping and notied that the bill addresses
this aspect of e-cigarettes. The images depicted on this slide
refute the claim that these products are not marketed to youth.
This is one avenue for getting people addicted to nicotine. He
pointed out that these nicotine disguised flavors are completely
unregulated.
MR. LAMKIN said the argument that these products do not have
nicotine and are not addictive is refuted by a 2015 report by
the Food and Drug Administration (FDA). Testing found that over
99 percent of the tested products contained nicotine, even when
labeled nicotine free. The risks of e-cigarettes are not known,
but the FDA has not found that any are safe. They may help
someone stop smoking, but they do not treat the addiction.
Recent research indicates that more than half of adult e-
cigarette users also continue to use traditional cigarettes. He
pointed out that quitting means ending the addiction, not
switching to another method of nicotine delivery.
The 2017 Alaska Youth Risk Behavioral Survey indicates that 13
percent of high school youth currently use tobacco and 16
percent use e-cigarettes while 34 percent have tried tobacco and
40 percent have tried e-cigarettes. He offered his understanding
that the most recent data suggests that the current use of e-
cigarettes has almost doubled, from 16 percent to between 30-35
percent. Those numbers will be published in April.
1:57:00 PM
MR. LAMKIN pointed to the next slide that shows a wide variety
of the e-devices that have been confiscated in Anchorage
schools. He said these devices are in children's hands and they
are aware of the disparity between state and federal law.
Federal law prohibits, without exception, the sale or possession
of e-cigarette products to anyone under the age of 21. SB 182
will bring state law in line with federal law with the exception
of those in the military and in prison. He said the sponsor will
introduce amendments to SB 182 to remove those exceptions to
conform to federal law. State law currently allows those who are
age 19 to buy, sell, or possess cigarette products. He said the
federal government relies on the state for enforcement but the
state's enforcement hands are tied because of the conflict
between the laws. He reiterated that SB 182 will align state law
with the federal law. Furthermore, the bill will tax these
products.
MR. LAMKIN concluded the presentation by showing a picture from
1994 when the CEOs of the major U.S. cigarette manufacturers
swore under oath to Congress that their products were neither
addictive nor harmful to human health. He pointed out that
industry advocates today insist that e-cigarettes are neither
addictive nor harmful. They maintain these products are a safe,
healthy alternative to tobacco and that more time, research, and
data is needed to study their effect on human health. He said
this is a multibillion dollar business and lobbyists are in the
committee room and online right now monitoring the progress of
the bill.
CHAIR BISHOP asked him to go through the sectional analysis.
2:00:16 PM
MR. LAMKIN summarized that SB 182 will bring all statutes
related to buying, selling, or possessing tobacco from a minimum
age of 19 to the age of 21. Further, it will bring all e-
cigarettes under the existing tax code for tobacco.
He paraphrased the sectional analysis for SB 182:
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 the requirement
for vendors to supervise the operation 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(c), provides an exemption for
selling or giving tobacco products to incarcerated
minors, raising the minimum age from 19 to 21 years of
age.
Sec. 4: AS 11.76.105, 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.
Sec. 5: AS 11.76.106(b), relating to the 'behind the
counter' control provisions of selling tobacco
products, allowing exemptions for tobacco shops or
online 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, including chew, gum, patches, or
E-cigarette products, raises the minimum age to sell
or give such products from 19 to 21.
Sec. 7: 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,
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
(from 19).
Sec. 9: AS 11.76.109(g), relating to the penalty for
selling or giving ESP or nicotine products to a minor
as being a violation, raises the minimum age from 19
to 21 years of age.
Sec. 10: AS 43.50.105(b), relating to wholesale
tobacco sales and licensees, to restrict licensees
from selling or transporting tobacco products to
persons that are at least 21 (from 19) years of age.
Sec. 11: AS 43.50.150(c), relating to state being in
partnership with municipalities in taxing tobacco
products, is amended to include taxing ESPs.
Sec. 12: AS 43.50.300, relating to existing state
excise tax on tobacco products, is amended to include
taxing ESPs.
2:04:54 PM
Sec. 13: AS 43.50.310(b) exempts the excise tax for
electronic smoking products that do not contain
nicotine, or those ESPs that are FDA-approved.
MR. LAMKIN noted that there are no FDA-approved electronic
smoking products at this time.
Sec. 14: AS 43.50.320(a), includes a requirement to be
licensed as a distributor of ESPs for those products
subject to an excise tax.
Sec. 15: AS 43.50.330(a), relating to annual reporting
requirements for tax purposes, amends existing tobacco
sales reporting to include ESP reporting.
Sec. 16: AS 43.50.335, relating to existing tobacco
tax credits and refunds for faulty or destroyed
products, to include credits for similarly faulty or
destroyed ESPs.
Sec. 17: AS 43.50.340, relating to existing record
keeping requirements for licensed businesses selling
tobacco products, to also be required to track sales
and product information on ESPs being sold.
Sec. 18: AS 43.50.390(1), relating to the definition
of a distributor of tobacco products, to also include
ESPs, for purposes of identifying business who bring
ESPs in and out of state, manufactures ESPs in the
state, or ships ESPs to retailers in the state.
Sec. 19: AS 43.50.390(5), relating to the term
"wholesale price" for purposes of taxing tobacco
products, includes ESPs as part of wholesale pricing
and taxing.
2:07:00 PM
Sec. 20: AS 43.50.390 provides a definition of
"electronic smoking product" consistent with use of
the phrase elsewhere in statute, specifying an ESP
means a:
(A)component, solution, vapor product, or other
related product that is manufactured and sold for
use in an electronic cigarette, electronic cigar,
electronic cigarillo, electronic pipe, or other
similar device for the purpose of delivering
nicotine or other substances to the person
inhaling;
(B) product under (A) of this paragraph that is
sold as part of a disposable integrated unit
containing a power source and delivery system or
as a kit containing a refillable electronic
smoking system and power source.
Sec. 21: 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. 22: 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. 23: 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. 24: 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. 25: AS 47.12.030(b), relating to the juvenile
justice system, and minors accused of possessing
tobacco, confirms existing law to apply to possession
by minors under the age of 21 (from 19).
Sec. 26: Applies an effective date of January 1, 2021.
2:08:35 PM
CHAIR BISHOP said he would hold his questions until the next
hearing so there was time to hear from the invited testimony.
2:09:16 PM
MARGE STONEKING, Executive Director, American Lung Association
of Alaska, Anchorage, Alaska, reported that Alaska achieved a 70
percent reduction in cigarette smoking among youth between 1995
and 2013 by following the Centers for Disease Control and
Prevention's (CDC) comprehensive tobacco control program that
includes a strong public media component, cessation systems, a
smoke-free workplace law, and increasing tobacco taxes. E-
cigarettes threaten that progress but raising the minimum sales
age to 21 is a tool to help stem this epidemic. She pointed out
that youth are particularly vulnerable to the impacts of tobacco
use and that the tobacco industry has long targeted this age
group. In fact, big tobacco spends about $17 million a year
marketing their products in Alaska while smoking costs the state
about $438 million annually in healthcare costs, 93 million of
which are Medicaid dollars.
MS. STONEKING said the data shows that 95 percent of current
tobacco or e-cigarette users started using tobacco before age 21
so it's particularly important to prevent teens from starting to
smoke. She described the spending bill that President Trump
signed in December 2019 that raised the legal age for tobacco
products from 18 to 21 as a major accomplishment. It became
effective on the date it was signed and there are no exemptions
anywhere in the U.S. She described the federal Synar Amendment
that requires states to enforce the minimum age laws or risk
losing substance abuse grant funds, and reported that Alaska has
been 95 percent compliant. She said SB 182 updates the statute
to reflect the age requirements in the new federal law and adds
electronic smoking devices to the definition of other tobacco
products so that they are taxed fairly along with all other
tobacco products. She said this will also reduce use by young
people because a ten percent increase at the cash register
reduces consumption among youth by about seven percent.
MS. STONEKING reported that a 2019 statewide poll for the
American Lung Association found that 73 percent of Alaskans who
were polled supported taxing e-cigarettes and vaping devices at
the same, 75 percent of wholesale, rate as cigarettes. She said
this is consistent with the $2 per pack tax on cigarettes so
$3.75 would be added to a $10 pack of Juul cartridges, for
example.
MS. STONEKING said the Alaska 2019 Youth Risk Behavior Survey
results have not been released but the expectation is that it
will show a drastic increase in the prevalence of e-cigarette
and vape usage, which is reflective of the 78 percent national
increase of youth vaping between 2017 and 2018. She said the
American Lung Association and its partners are working with
school districts to update policies and programs to respond to
this increase in youth vaping but the legislature needs to do
its part by passing SB 182.
2:19:10 PM
SENATOR STEVENS expressed appreciation that her testimony
touched on both the age and taxation issues and the idea that
education is necessary for children and adults. He noted his
surprise to learn from students and teachers that parents often
supply their kids with vaping products. He asked her to comment.
MS. STONEKING replied the American Lung Association is also
fighting the battle of misinformation about the safety of these
products and is encouraging parents to educate themselves by
looking at the video at thevapetalk.org.
CHAIR BISHOP suggested she leave her written testimony with the
committee aide.
2:21:03 PM
JOE DARNELL, Chief Investigative Officer, Tobacco Youth
Education & Enforcement Program, Division of Behavioral Health,
Department of Health and Social Services (DHSS), Juneau, Alaska,
said he would touch on what is happening in enforcement. He
explained that the youth enforcement program started in 2003
when underage sale of tobacco to minors was 36 percent. That has
dropped to the 4-6 percent range with education and changes in
the licensing laws.
When vaping became popular, baseline studies showed that
underage use of vaping products over a three year period was 37
percent statewide. When data from Anchorage was viewed
independently, it showed the sell rate of vaping products to
youth was 50 percent. Every other vape shop was blatantly
selling to kids, he said. The numbers started to drop once SB 15
went into effect on January 1, 2019. In Anchorage, sales dropped
from 50 percent to 30 percent.
He said SB 182 would align state law with the new federal law,
which would help both the state and businesses because the laws
conflict and this puts merchants in limbo. He said 95 percent of
the tobacco and e-cigarette vendors want to do the right thing
and follow the law but it's difficult when the laws don't jibe.
MR. DARNESS noted that the ads in convenience store windows now
feature e-cigarettes more frequently than tobacco. He said the
effort to reduce tobacco smoking in youth has been successful
and an equally robust effort is needed for electronic products.
2:24:48 PM
CHAIR BISHOP asked if the youth enforcement program receives any
federal money.
MR. DARNELL replied the program receives money indirectly
through the Tobacco Master Settlement Agreement.
CHAIR BISHOP said he wanted to know if the state would
jeopardize receipt of federal funds if it did not comply with
the new federal law.
2:25:40 PM
SENATOR STEVENS asked Mr. Darnell what happens to youths that
violate this law.
MR. DARNELL explained that the young people who work for the
enforcement program are interns with the state. They receive
several days of training and then visit tobacco/vape shops and
try to purchase product. If the intern is successful in
purchasing tobacco or e-cigarettes, the vender receives a
citation that requires a court appearance and a fine that ranges
from $300 to $500. Any convictions are sent to licensing and
that is used to suspend the tobacco endorsement. On the first
offense the retailer can show seven things they were doing ahead
of time to mitigate their suspension time. There is no
opportunity to mitigate a suspension after the first offense.
2:27:28 PM
CHAIR BISHOP held SB 182 in committee for future consideration.