HB 110-AGE FOR NICOTINE/E-CIG; TAX E-CIG.  9:03:08 AM CO-CHAIR FIELDS announced that the next order of business would be 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." 9:03:27 AM CO-CHAIR SPOHNHOLZ moved to adopt the committee substitute (CS) for HB 110, Version 32-LS0446\I, Nauman, 4/8/21, as the working document. There being no objection, Version I was before the committee. 9:03:47 AM CO-CHAIR FIELDS opened public testimony on CSHB 110(L&C). 9:04:09 AM SABRINA COMBS testified in support of HB 110. She expressed alarm at how common vaping has become and how the products are marketed toward a younger demographic. She said e-cigarettes should be treated and taxed as regular tobacco products and more difficult to purchase. She said e-cigarettes are often labeled as cessation devices, but are having the opposite effect among teens. 9:05:29 AM ALYSSA KEILL testified in support of HB 110 and informed the committee that she is a swim coach of middle school-aged kids. She said the kids have told her they know students who have tried vaping and said there is confusion stemming from misleading messages surrounding the safety of vaping compared to smoking cigarettes. She said her swimmers most commonly express knowledge of disposable vaping products that come in different flavors. 9:07:35 AM DR. MELINDA RATHKOPF testified in support of HB 110. She said she has been a practicing physician for over 20 years, and she provided statistics showing the increase of e-cigarette use among teens. She expressed that addiction happens more quickly in children than adults and is much harder to overcome, and leads to mood disorders, attention difficulty, and increased risk of addiction to other substances. She stated that raising the tobacco purchasing age to 21 would be an important part of reducing tobacco use; in 2015, she said, the Institute of Medicine concluded that raising the minimum age for tobacco sales nationwide would reduce tobacco initiation, particularly among adolescents. She said that three-fourths of adults over the age of 21 support raising the minimum age for purchase along with increasing the price through higher taxes. 9:11:40 AM SHAUN D'SYLVA, Member, Alaska Smoke Free Trade Association, testified in opposition to HB 110. He said that the latest tobacco survey done by the Centers for Disease Control and Prevention (CDC) showed that 13.3 percent of middle and high school students had tried e-cigarettes within the past 30 days. He expressed that those in favor of increased regulations on vaping are using "old" data, with the most current data showing use having dropped significantly. He expressed that the proposed wholesale tax of 75 percent could lead to an increase in the smoking rate, saying that studies have shown that, as e- cigarette taxes went up, people moved to smoking regular cigarettes. 9:15:08 AM MIKE COONS testified in opposition to HB 110 and said the country has a problem deciding at what age a person becomes an adult. He said that at age 18 a person can vote, be subject to criminal prosecution as an adult, and be drafted into the military or join without parental consent, but cannot own a revolver, drink alcohol, or buy cigarettes. He listed several hypotheticals concerning the age a person should be when making decisions. 9:17:46 AM PATTY OWEN, Alaska Public Health Association, testified in support of HB 110. She asked committee members to consider surveys done on Alaska's youth, as opposed to national data, regarding e-cigarette use, pointing out that in 2019, 46 percent of high school students had tried e-cigarettes. Current use of the product among high school students, she said, is 26 percent. She expressed concern about the health effects of vaping and of the practice of marketing directly to children. 9:20:21 AM JOHNA BEECH testified in support of HB 110 and presented her written testimony [included in the committee packet], which read as follows [original punctuation provided]: The FDA acknowledges e-cigarettes as tobacco products. They should be taxed at the same rate as traditional tobacco projects. At this time, in the state of Alaska, E-cigarettes are not taxed at all. Also, the entire product should be taxed, not just a portion of it. We have done so well in our advancement in our fight against cancer; with early detection and prevention being two major players in reducing death rates. Our youth know that traditional tobacco is a bad deal. Yet we see an increase in youth use of e-cigarettes. If we can prevent our youth from using ecigarettes by taxing the tobacco product, why wouldn't we do so? Please support a strong e-cigarette tax to keep our young people safe and healthy. 9:21:28 AM ROBIN MINARD, Chief Communications Officer, Mat-Su Health Foundation, testified in support of HB 110. She pointed out that most tobacco use begins before age 18. Local and state- level policies that increase the per-unit price of tobacco products, create smoke-free environments, and restrict minors' access to tobacco products, she said, have been shown to contribute to the non-use of tobacco among youth. The vapor of e-cigarettes, she said, while containing fewer carcinogenic substances than cigarette smoke, cannot be regarded as simply "harmless." She stated that peer-reviewed studies have found that tobacco taxes increase the overall number of smokers who quit, reduce the overall consumption of tobacco, and introduces the possibility of cessation for those who continue to smoke; in addition, those who don't smoke benefit from increased taxes by experiencing reduced exposure to secondhand smoke and vapor. 9:23:45 AM SARAH EATON testified in opposition to HB 110. She told the committee that she has smoked since the age of 12 and has had breast cancer, chronic obstructive pulmonary disorder (COPD), and emphysema. She said she has tried many methods of cessation before moving to vaping, using products from China that weren't yet available in the United States. A year later, she said, vaping products she characterized as "clean nicotine" began being regulated in the United States. She said she has been told that she no longer has COPD or emphysema, and that she believes vaping saved her life. 9:27:16 AM JESSI WALTON testified in opposition to HB 110. She said vaping has saved her life and that military members should be able to make their own decisions. 9:28:16 AM KRISTIN GEORGE stated her support for HB 110. 9:28:40 AM CARRIE NYSEEN, Senior Director of Advocacy, American Lung Association, testified in support of HB 110, stating that increasing prices is one of the best ways to decrease consumption, encourage users to quit, and delay use in children. She said that with the COVID-19 pandemic and record use of vaping among children, now is the time to do anything possible to discourage the use of products that compromise lung function. She stated that the association between compromised lungs and adverse COVID-19 outcomes is well known. She characterized HB 110 as a "good bill" and said it could be made better by removing the youth possession and use penalties, expressing that they're unlikely to reduce youth initiation and that research suggests such laws are counterproductive. "Heating up toxic chemicals and inhaling these toxins into the lungs is not healthy," she said, adding that the chemicals can cause lung disease while added flavorings cause inflammation. While some of the flavorings are food additives, she said, they're designed and approved to be ingested rather than inhaled. She pointed out that manufacturers of vaping products have taken no steps to have their products approved as smoking cessation devices. 9:30:57 AM JAMIE MORGAN, American Heart Association, testified in support of HB 110. She said tobacco use remains the leading cause of preventable death in Alaska, costing the state $571 million in direct health care costs and $261 million in lost productivity. She said e-cigarettes are now the most commonly-used tobacco products by youth and adolescents. She noted that e-cigarettes increase the odds of stroke, heart attack, and coronary heart disease, and research shows that vaping damages the function of blood vessels, increasing arterial stiffness and blood vessel damage similar to that found in the bodies of traditional smokers. She explained that one vape pod can contain as much nicotine as two to four packs of cigarettes, and that children are vaping as much as four pods per day. 9:33:30 AM ALEX MCDONALD testified in opposition to HB 110. He shared that he watched his grandmother die of lung cancer from smoking and has tried everything to quit his own addiction. He said he switched to vaping in 2013 and has been tobacco-free ever since, noting that he submitted an article that said vaping is more effective than traditional nicotine replacement therapy in cessation. He said getting people to stop smoking traditional cigarettes would help the state's budget, and HB 110 would be counterproductive to public health. 9:36:37 AM CO-CHAIR FIELDS, after ascertaining that no one else wished to testify, closed public testimony on HB 110. 9:36:58 AM REPRESENTATIVE NELSON asked for an explanation for the increase in age for tobacco sales. 9:37:15 AM REPRESENTATIVE SARA HANNAN, Alaska State Legislature, as prime sponsor, replied that the change in age is to comply with federal law. She mentioned a 2019 executive order from President Donald Trump mandating a minimum age of 21 as the age of legal use. REPRESENTATIVE NELSON asked Representative Hannan to clarify whether the executive order required an individual to be 21 in order to purchase the products, or to sell them. REPRESENTATIVE HANNAN replied that the age for selling tobacco products is up to each state. REPRESENTATIVE NELSON surmised that it would be up to the legislature to increase the age required for selling tobacco. REPRESENTATIVE HANNAN responded that HB 110 would bring Alaska's statutes into compliance with federal age of use requirements. REPRESENTATIVE NELSON asked, "But not the age to sell?" REPRESENTATIVE HANNAN replied, "Correct." REPRESENTATIVE NELSON asked whether anyone knows what the price of an e-cigarette would be if HB 110 were to pass. REPRESENTATIVE HANNAN said that she doesn't know, and explained that HB 110 would add the current tobacco tax onto the entire category of products. 9:39:37 AM CO-CHAIR SPOHNHOLZ pointed out that in Anchorage one must be 21 to either purchase or sell tobacco products. She referred to an earlier mention of the military and said that it had been her understanding that the military doesn't allow the sale of tobacco on military bases to anyone under 21. REPRESENTATIVE HANNAN replied that as of August 1, 2020, the U.S. Department of Defense no longer sells any tobacco products in its facilities. 9:41:06 AM REPRESENTATIVE SNYDER stated her support of the proposed legislation but said she wants to make sure she understands the current costs of vaping products and cigarettes. REPRESENTATIVE NELSON expressed the possibility of a return to regular cigarettes if the price of e-cigarettes was much higher in comparison. REPRESENTATIVE HANNAN said she purchased an e-cigarette several years prior in order to figure out what exactly it was. She said the particular product is not sold in brick-and-mortar stores, noting that HB 110 would ban Internet sales of tobacco products, thereby pushing people to purchase in person. She said she did not delve into prices beyond taxes. REPRESENTATIVE NELSON asked whether HB 110 would include products such as the transportation mechanism for the vape. REPRESENTATIVE HANNAN replied, "Correct." REPRESENTATIVE NELSON asked whether HB 110 would include pipes for regular tobacco. REPRESENTATIVE HANNAN replied, "No." 9:44:06 AM REPRESENTATIVE KAUFMAN, noting that HB 110 would eliminate Internet sales of vaping products, said he pictured a situation in which someone doesn't have close, physical access to an outlet. REPRESENTATIVE HANNAN responded that a person living in a community without a tobacco store could order directly from a store, which is different from simply ordering from a website. A case of tobacco shipped to Dillingham could involve age verification, she said. 9:46:00 AM CO-CHAIR SPOHNHOLZ recalled testimony suggesting that taxing e- cigarette products could incentivize people to use traditional tobacco use due to the cost. She pointed out that HB 110 would bring the vaping mechanisms and liquid into the same tax structure already applicable to tobacco. She noted that tobacco was first taxed because it's dangerous; having an increased tax on e-cigarettes would not force someone to use traditional tobacco, she opined, because it's expensive, not necessarily easier to use, and not safer. She noted that public health experts have stated that one-third of youths are vaping, with a 70 percent increase of e-cigarette use between 2017 and 2018. This is a grooming tool with no public health benefit, she said, to get people into another addictive product. 9:47:49 AM REPRESENTATIVE MCCARTY asked whether there are other products for which purchase via the Internet has been banned. REPRESENTATIVE HANNAN replied that she hasn't looked into it, but that she believes alcohol is banned from being sold online in Alaska. CO-CHAIR FIELDS agreed. 9:48:36 AM REPRESENTATIVE NELSON discussed the apparent disparity in cost between regular tobacco products and e-cigarettes when some municipalities already have a tax in place. He also asked whether there is a reason why a tobacco pipe would not be taxed. REPRESENTATIVE HANNAN replied that Section 22 addresses self- contained and disposable units. "Juul is one," she said, "where you can only use in a Juul device, Juul pods." She said the goal of the section was to discourage the use of such devices. 9:50:48 AM CO-CHAIR FIELDS pointed out that companies such as Juul market to children. 9:51:12 AM REPRESENTATIVE SCHRAGE said, "I believe in personal liberties and the freedom to make bad choices." He opined that vape options are less risky and less harmful than traditional cigarettes and expressed that he recognizes there are some health and societal consequences to e-cigarettes. He said that he manages a tutoring program and has observed students leave school to seek addiction treatment because they couldn't maintain focus for an hour in class without vaping. He stated his support for HB 110 and asked whether there could be a staggered implementation to prevent workers who are under 21 from losing their jobs. REPRESENTATIVE HANNAN replied that most of the punishment for age violations fall on the business. She then deferred to Mr. Darnell. 9:53:36 AM JOE DARNELL, Chief Investigator, Tobacco Enforcement and Youth Education Program, Division of Behavioral Health, Department of Health and Social Services, told the committee that businesses know the age requirement is forthcoming and are slowly starting to integrate the expected requirements into their operations. He alluded to a rollout similar to what was put into place when Alaska moved to smoke-free workplaces. REPRESENTATIVE SCHRAGE said he could see it causing hardship in small communities. 9:55:15 AM REPRESENTATIVE KAUFMAN expressed understanding that the tax rate would apply to the device as well as to the liquid. REPRESENTATIVE HANNAN responded, "Yes, currently it taxes disposable electronic smoking products that contain vape." REPRESENTATIVE KAUFMAN asked whether a standalone device would be included in the tax. 9:56:20 AM STEPHANIE ANDREW, Staff, Representative Sara Hannan, Alaska State Legislature, replied, "My understanding is that in the new definition, the cartridge would be taxed, but the device, if it is not contained in a kit or all-in-one, that it would not be taxed separately. So, it refers to the part of the device that includes the nicotine." 9:56:40 AM CO-CHAIR FIELDS expressed that if the devices were legitimately used for smoking cessation, the proposed legislation would not be considered. He stated that the body of evidence shows that the devices are used to foster addiction in children. He then read an excerpt from a letter from the Mat-Su Health Foundation [included in the committee packet], which read as follows [original punctuation provided]: they are a grooming tool, grooming kids to accept, like, and become dependent on smoking and nicotine. Recent research indicates that adolescents and teens who try e-cigs are much more likely than other youth to progress to traditional cigarettes. 9:57:17 AM CO-CHAIR SPOHNHOLZ moved to report CSHB 110, Version 32- LS0466\I, Nauman, 4/8/21, from committee with individual recommendations and the accompanying fiscal notes. 9:57:31 AM REPRESENTATIVE NELSON objected, saying that he agrees that smoking carries negative effects but that small business owners might want to hire their own children who may be under 21. 9:58:15 AM REPRESENTATIVE KAUFMAN asked whether Representative Nelson would consider a conceptual amendment. REPRESENTATIVE NELSON replied that a conceptual amendment is no longer possible since the motion was already put forward. 9:58:37 AM CO-CHAIR FIELDS asked Representative Hannan about the next committee of referral. REPRESENTATIVE HANNAN replied that the House Finance Committee would next hear the proposed legislation. CO-CHAIR FIELDS suggested that the House Finance Committee may wish to amend HB 110. 9:59:13 AM CO-CHAIR SPOHNHOLZ, pointing out that she may have misspoken during her earlier motion, moved again to report CSHB 110, Version 32-LS0466\I, Nauman, 4/8/21, from committee with individual recommendations and the accompanying fiscal notes. 9:59:34 AM CO-CHAIR FIELDS recognized Representative Nelson's earlier objection. 9:59:39 AM REPRESENTATIVE KAUFMAN said that there needs to be changes to HB 110 and that he has not decided how he will vote. He said he will seek amendments. 10:00:05 AM CO-CHAIR SPOHNHOLZ thanked Representative Hannan for introducing HB 110 and noted that one of the reasons for the higher age requirement for selling is to avoid youths selling the products to their peers. She said that the same reasoning applies to the statute that mandates an individual who sells alcohol products be of legal drinking age. 10:00:47 AM REPRESENTATIVE SNYDER pointed out that it would be helpful during future hearings to state the cost of cigarettes more precisely in comparison to vaping products. 10:01:37 AM A roll call vote was taken. Representatives Schrage, Snyder, Spohnholz, McCarty, and Fields voted in favor of reporting CSHB 110, Version 32-LS0466\I, Nauman, 4/8/21, from committee with individual recommendations and the accompanying fiscal notes. Representatives Kaufman and Nelson voted against it. Therefore, by a vote of 5-2, CSHB 110(L&C) was reported out of the House Labor and Commerce Standing Committee.