Legislature(2021 - 2022)ADAMS 519
05/07/2021 01:30 PM House FINANCE
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HOUSE BILL NO. 110 "An Act raising the minimum age to purchase, sell, exchange, or possess tobacco, a product containing nicotine, or an electronic smoking product; relating to transporting tobacco, a product containing nicotine, or an electronic smoking product; relating to the taxation of electronic smoking products; and providing for an effective date." 2:09:15 PM Co-Chair Merrick OPENED public testimony. 2:09:48 PM JASON JONES, SELF AND OWNER, LEGION VAPOR, ANCHORAGE (via teleconference), opposed HB 110 as it would negatively affect his business. He believed that vaping changed his life because it helped him quit smoking. He stated that he vigilantly enforced the 21 year old age limit in his shop. The Anchorage municipal tax had impacted his business. He felt that the tax would harm adults 21 and over that vape instead of smoke. He believed that tax would ruin his business. 2:12:56 PM ALYSSA KEILL, SELF, FAIRBANKS (via teleconference), spoke in favor of HB 110. She was a part-time swimming coach for teens. She relayed that when she asked the team about vaping many admit to having tried vaping and raised doubts about the health risks. She deduced that the doubt sprang from the assertion that vaping was safer than smoking. She asserted that safer did not mean safe. Nicotine addiction was an addiction regardless of how it was ingested. She thought the legislation showed that vapor products were nicotine products and should be treated as any other product containing nicotine. She felt that the bill was a step in the right direction. 2:14:55 PM ROYCE WALSTON, SELF, KETCHIKAN (via teleconference), spoke in support of HB 110. He was a sophomore at Ketchikan High School. He related that he saw fellow students using Jule pods and vaping in school and out of school. It caused the schools bathrooms to be shut down. He shared that he worked for the Ketchikan Youth Alliance that was combined with the Ketchikan Wellness Coalition and was working to build a safer community. He thought the issue was important because nicotine was a very addictive drug. He shared from personal experience the way nicotine addiction had affected people close to him who lost scholarships or their lives. He spoke of his cousin being plagued with asthma that had tried vaping and it caused his lung to collapse. His cousin currently, better understood that vaping was dangerous. He emphasized his support for taxing vaping products and thought that it created equity amongst all nicotine products. He asserted that individuals that vape influence others to vape. 2:18:03 PM Vice-Chair Ortiz asked if it was Mr. Walston's first time testifying before a legislative committee. Mr. Walston responded in the affirmative. Representative Ortiz praised and appreciated his involvement. Representative Rasmussen appreciated Mr. Walstons testimony. She asked how his friends under 19 years of age had been influenced and how they obtained the vaping products. Mr. Walston stated that his peers were influenced by older peers. He thought that those engaged in vaping who were underage obtained the products through older peers, or randomly found the products. He was uncertain about the details. Co-Chair Merrick commended Mr. Walston for his participation and testimony. 2:19:43 PM CARRIE NYSSEN, AMERICAN LUNG ASSOCIATION, VANCOUVER, WASHINGTON (via teleconference), strongly supported HB 110. She voiced that increasing prices decreased consumption, discouraged, and delayed use of the dangerous products. She offered that 95 percent of adult tobacco users began before the age of 21. A delay in age for the first use of vaping and tobacco products reduced the risk of addition. Youth exposure to nicotine during critical years of brain development could cause lasting adverse consequences. She indicated that nicotine addition could occur after minimal exposure to tobacco products. Lung development continued into the teen years and exposure to toxins impaired healthy lung development. She advocated for a comprehensive approach to decrease the youth use of electronic cigarettes. Raising the age and the cost were evidence based policies that would protect youth. The American Lung Association supported removing the penalty provisions in the bill. 2:21:54 PM Representative Josephson asked Ms. Nyssen to repeat her last sentence. Ms. Nyssen replied that she referred to the penalty for possession of tobacco use. She elaborated that the penalty had no evidence that it worked and harmed youth. 2:22:26 PM JAY OKU, SELF, CALIFORNIA (via teleconference), spoke in strong opposition to HB 110 primarily due to the dangers posed by black-market activity. He believed that vaping helped offset the leading cause of preventable death. He alleged that the negative effects of vaping were hyperbole. He claimed that no one was dying from vaping. He listed some statistics on the topic of children and vaping and stated that less than one percent of current young vapors had not first experienced nicotine by smoking. He argued that by attributing harmful affects to vaping it discouraged some smokers from using vaping products to quit smoking. He indicated that the current federal age for vaping was 21 and should be strictly enforced, and that enforcement efforts should be increased. He felt that specialty vape shops were compliant and not the problem. He believed that the black-market was the problem. 2:25:23 PM TERRANCE ROBBINS, SELF, KETCHIKAN (via teleconference), spoke in support HB 110. He believed that raising taxes on nicotine products resulted in a reduction in the use of smoking products, especially among the most vulnerable populations that included youth. He relayed that 90 percent of all adult tobacco users became addicted to nicotine before the age of 18. On January 1, 2017, the City of Ketchikan enacted an excise tax on tobacco products that included vape devices. He shared that results were positive, and a survey showed a reduction in adults smoking rates declined by 24 percent in 2017. He cited limited data that concluded the Ketchikan Gateway Borough School District experienced a 63 percent decrease in cigarette use from 2015 to 2019 and youth vaping increased by 51 percent. He found data that did not favor fines or punitive measures for youth as a deterrent to tobacco use. 2:28:43 PM CHARLES EDGE, SELF, FAIRBANKS (via teleconference), spoke to HB 110. He shared that he was 20 when he enlisted in the armed forces and felt the bill needed a military exemption clause and did not favor the age increase to 21. He noted that he was always carded when purchasing vape products in Fairbanks stores. He believed that underage children would obtain vaping products regardless of the law. It would take away the choice of legal law-abiding adults. He noted that the bill allowed adults to purchase e-cigarettes for their children and felt that the bill sent mixed signals. 2:31:43 PM Representative Rasmussen thanked Mr. Edge. She encouraged him to continue to call-in and testify. 2:32:10 PM ALEX MCDONALD, SELF, FAIRBANKS (via teleconference), opposed HB 110. He pointed out that the subject of taxing vaping products had been brought up during the Walker Administration and did not pass at the time. He suggested that a tax under the present pandemic situation was not favored. He also noted that the Fairbanks North Star Borough and Fairbanks City Council had recently voted down a similar tax. He cited a study that concluded that the combustible delivery system of nicotine posed the danger and that non-combustible methods posed less risk and cost that state less in healthcare costs. He urged members to oppose the bill. 2:35:01 PM PATRICIA PATTERSON, SELF, SOLDOTNA (via teleconference), opposed the bill because she wanted it amended. She shared that she owned a tobacco store and a marijuana store. She voiced that many of electronic devices sold in tobacco and marijuana stores were empty. She believed that the bill would cause confusion and possibly apply the 75 percent tax in the marijuana store. She advised only taxing nicotine and to omit the provisions taxing the electronic components. 2:37:55 PM ROBIN MINARD, MATSU HEALTH FOUNDATION, WASILLA (via teleconference), spoke in favor of the legislation. The bill aligned state law to federal statute by raising the minimum age from 19 to 21 for all tobacco products and taxed e-cigarettes at the same rate as other tobacco products. She was already aware of the effectiveness of tobacco taxes, which fostered non-use of tobacco among youth, encouraged smokers to quit, and reduced the overall consumption of tobacco. Increased taxes also had a positive effect on non-smokers with less exposure to secondhand smoke. She furthered that e-cigarette vapor had been found to contain flavors, propylene glycol, glycerin, heavy metals, carcinogens, and metal nano particles and could not be regarded as harmless. She indicated that inconsistent research had been attributed to much of the vape research proponents touting its safe use. She encouraged the committee to move HB 110 forward. 2:40:24 PM SHAUN D'SYLVA, ALASKA SMOKE FREE TRADE ASSOCIATION, SEATTLE (via teleconference), owned stores in Fairbanks, Wasilla, and Anchorage. He opposed the bill. He stated that research suggested that vaping was clearly better than smoking. He asserted that in Minnesota and Massachusetts increased e- cigarette taxes encouraged people to smoke tobacco over vaping. He noted that in some places in Alaska there was a 55 percent tax on e-cigarettes. He stated that the industry did not advertise any longer. He noted another study that claimed the air inside of a vape store was cleaner than outside air. He urged members to look at studies encouraging vaping as a method to stop smoking. 2:44:17 PM JESSI WALTON, SELF, FAIRBANKS (via teleconference), opposed HB 110. She considered vaping a consumer created alternative. She believed that a 75 percent tax would force her to turn to the black market. She thought that people would return to smoking combustible cigarettes and that the bill was bad policy. She urged members to oppose HB 110 2:45:34 PM EMILY NENON, ALASKA GOVERNMENT RELATIONS DIRECTOR, AMERICAN CANCER SOCIETY, ANCHORAGE (via teleconference), had worked on cancer prevention policy for 20 years. She shared that she worked on the tobacco tax legislative effort in 2004. She noted that tax statutes had not changed since that time, but the markets had with the introduction of e- cigarettes in 2007. She thanked the bill sponsor and staff for bringing the bill forward. She indicated that it was noteworthy that e-cigarettes were not considered a cessation product nor had any company applied to the FDA for them to be classified as such. Combustible cigarettes had over 3000 chemical compounds of which 70 were known human carcinogens. She reasoned that it was not difficult for a vape product to be less harmful than combustible cigarettes. Tobacco use cost the state $438 million in healthcare costs. She was available for questions. 2:47:49 PM DON ENSLOW, SELF, ANCHORAGE (via teleconference), spoke in strong support of HB 110. He was a safety professional for 43 years and had to measure air contaminants for exposure limits on job sites. He indicated that chemical products in e-cigarettes included propylene glycol, which when heated turned into formaldehyde and acetaldehyde that were both carcinogens. In the workplace, the OSHA exposure limits for propylene glycol was .05 parts per million and for formaldehyde it was .5 parts per million. Very small amounts of the chemicals could be detrimental to human health. He furthered that even though the FDA had not begun its review of e-cigarettes, researchers know that vaping devices contained propylene glycol and related carcinogens, diacetone, diethylene glycol, metals, and benzene. He believed that increasing taxes would be a monetary deterrent to the use of vaping products. 2:50:55 PM JAMIE MORGAN, GOVERNMENT RELATIONS REGIONAL LEAD, AMERICAN HEART ASSOCIATION, SACRAMENTO, CALIFORNIA (via teleconference), indicated that the American Heart Association fully supported HB 110. She believed that there was an epidemic in the use of vaping products among youth. She relayed that current or prior cigarette smokers were more prone to becoming ill with Covid-19. She declared that e-cigarettes were not safe and increased the risk of stroke, heart attack, and coronary heart disease. Young adults using e-cigarettes experienced arterial stiffness and blood vessel damage similar to smokers. The AHA supported public policy that regulated and taxed e- cigarettes similarly to all other tobacco products and favored raising the legal age to 21. Studies showed that youth were price sensitive to increased tobacco taxes and costs. She advised removing the language regarding possession and punishment from the bill. 2:53:45 PM Representative LeBon deduced that marijuana vaping products were not taxed. He asked if AHA had a position on the implications of marijuana use. Ms. Morgan relayed that the AHA did not have a position on marijuana use. However, AHA held the position that wherever smoking tobacco is prohibited, smoking marijuana should also be prohibited to be consistent with smoke free air. 2:54:53 PM REPRESENTATIVE SARA HANNAN, SPONSOR, spoke to Representative LeBon's question. She informed Representative LeBon that cannabis vaping was taxed. Cannabis taxation happened at the grow level and was taxed at the same rate regardless of the method of ingestion. 2:55:29 PM Co-Chair Merrick CLOSED public testimony. 2:55:55 PM NICOLE REYNOLDS, DEPUTY DIRECTOR, TAX DIVISION OF THE DEPARTMENT OF REVENUE (via teleconference), reviewed the published zero fiscal note [FN 3 (REV)] for the Department of Revenue. She indicated that the department did not anticipate a revenue impact from the age change, as most sellers have already adjusted selling practices to reflect federal law. She explained that DOR did not have statewide data regarding the sales of vaping products therefore the division used data from the Matanuska-Susitna Borough's tax on e-cigarette sales and updated population data to develop an estimated tax base for Alaska. In the absence of statewide data on electronic cigarette sales, there was a wide range of uncertainty around the revenue estimates. The division estimated that the tax would generate an additional $1 million in revenue in FY 2022 and $2.4 million in FY 2023, rising with inflation to $2.7 million in FY 2027. The reason for the lower revenue estimate in FY 2022 was twofold; revenue would only be collected for half of the fiscal year because the bill would take effect halfway through FY 2022, and it's assumed that distributors would stockpile inventory before the tax takes effect. The entirety of the revenue would be deposited into the General Fund (GF). 2:58:47 PM CLINT FARR, OPERATIONS MANAGER, DIVISION OF PUBLIC HEALTH, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via teleconference), discussed the publish zero fiscal note [FN 2 (DHS)] for the Department of Health and Social Services. He indicated that there would be no fiscal impacts to the Division of Public Health or expected to experience an increased workload. He was available for questions. 2:59:44 PM SHARON WALSH, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference), spoke to the published zero fiscal note [FN 1 (CED)] He commented that there would be no fiscal impacts on the division. 3:00:22 PM Representative Thompson shared a concern. He indicated there were about 2 dozen convenience-type stores inside of gas stations in Fairbanks where individuals that were 19 years of age worked. He worried that they would lose their income if the bill was adopted. Co-Chair Merrick voiced that amendments were due for HB 110 by 6:00 pm on Tuesday, May 11, 2021. She also set a deadline for HB 85 on May 11, 2021, at 6 pm. HB 110 was HEARD and HELD in committee for further consideration.
|HB 110 Public Testimony by 051021.pdf||
HFIN 5/7/2021 1:30:00 PM
|HB 132 Amendments 1-3 051121.pdf||
HFIN 5/7/2021 1:30:00 PM