Legislature(2021 - 2022)ADAMS 519

05/07/2021 01:30 PM House FINANCE

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= bill was previously heard/scheduled
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+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
-- Public Testimony --
Heard & Held
-- Public Testimony --
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                                                                    
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                                                                    
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                                                                    
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                                                                    
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                                                                    

Document Name Date/Time Subjects
HB 110 Public Testimony by 051021.pdf HFIN 5/7/2021 1:30:00 PM
HB 110
HB 132 Amendments 1-3 051121.pdf HFIN 5/7/2021 1:30:00 PM
HB 132