SB 89-AGE FOR TOBACCO/NICOTINE/E-CIG; TAX E-CIG  1:57:15 PM CHAIR BJORKMAN reconvened the meeting and announced the consideration of SENATE BILL NO. 89 "An Act relating to tobacco, tobacco products, electronic smoking products, nicotine, and products containing nicotine; raising the minimum age to purchase, sell, exchange, or possess tobacco, a product containing nicotine, or an electronic smoking product; relating to the taxation of electronic smoking products and vapor products; and providing for an effective date." He asked Mr. Lamkin to give a brief recap of the bill. 1:57:44 PM TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State Legislature, Juneau, Alaska, offered a recap of SB 89. He reminded the community that the bill's mission is primarily about getting nicotine and e-cigarette products out of the hands of Alaska's youth. He refuted previous public testimony, stating: • The statement that taxing e-cigarette products and increasing the legal age to 21 years will increase the burden on law enforcement is not true. These statutes have been around for decades and are tools that are available to law officers. It is not often that students are actually cited, though these cases are increasing. In Alaska there are different investigator classes, so each department can hire their own enforcement arm, focusing on areas such as licensing, tattoo parlors, and food stamp fraud. • The statement that the tax rate is too high is not true. Vape products are inexpensive he can provide receipts that show he purchased e-cigarette items for $1. He can provide local photos of e-cigarette products. He said the pricing information on the internet shows that these products are cheap. He commented on out-of-state individuals that maintain that Alaska doesn't have a problem with e-cigarette products in schools. He related that he has been working on a database that is comprised of a series of questions and answers between himself and the schools: • Are you seeing e-cigarettes in schools? Overwhelmingly yes. • Are e-cigarettes on the rise in schools? Overwhelmingly yes. • Do you believe that vape products and e-cigarettes are safe? Overwhelmingly no. • As with alcohol, do you support raising the legal age to buy/sell/possess e-cigarettes to age 21? Overwhelmingly yes. • Do you support establishing a 25 percent retail sales tax on e-cigarettes as a way to deter youth initiation? Overwhelmingly yes. MR. LAMKIN reiterated that youth vaping is a problem that needs to be addressed. 2:00:41 PM SENATOR DUNBAR expressed concern that 19-year-olds and 20-year- olds may lose employment opportunities. He asked whether the sponsor had looked into the potential impacts of the 25 percent tax, noting that some testifiers believed it might create a black market. He asked whether vape products would still be substantially cheaper than cigarettes after the 25 percent tax was imposed. MR. LAMKIN answered that it depends on who answers those questions. Dr. Frank J. Chaloupka IV, a research professor and arguably the nation's leading tobacco economist, has no problem with the 25 percent retail tax and finds that it is at parity with tobacco products. 2:03:20 PM SENATOR DUNBAR asked whether he researched the impact the tax might have had in Anchorage. MR. LAMKIN replied that he is not sure that information was available yet, but information from the Center for Disease Control (CDC) historically has indicated that taxing tobacco and cigarettes is the single most effective way to reduce consumption of those products. SENATOR DUNBAR focused his question. He said Anchorage has a substantial vape tax that raises a lot of annual revenue. He asked whether the changes Anchorage made actually increase tobacco use or if it drove people to the black market. He surmised that it would be prudent to consider potential negative effects. MR. LAMKIN said that kind of information would be highly anecdotal; he wasnt aware of any empirical information. He noted that it is difficult to obtain data on the black market, but he was willing to pursue that question for the committee. 2:05:21 PM SENATOR GRAY-JACKSON recalled that the tax used to be 50 percent, so the 25 percent rate was a compromise. 2:05:53 PM CHAIR BJORKMAN asked whether it would be challenging to enforce the bill. 2:06:30 PM JOE DARNELL, Chief Investigator, Tobacco Enforcement & Youth Education, Department of Health (DOH), Anchorage, Alaska, answered questions about SB 89. He expressed that he did not see any added workload for the department if this bill were to pass. 2:07:02 PM SYLVAN ROBB, Director, Division of Corporations, Business and Professional Licensing, Department of Commerce, Community and Economic Development, Juneau, Alaska, answered questions about SB 89. She replied that the division is currently enforcing the age 21 tobacco law and would not see any change if the bill were to pass. 2:07:33 PM CHAIR DUNBAR reminded the public that they could submit written testimony to slac@akleg.gov. 2:08:07 PM CHAIR BJORKMAN opened public testimony on SB 89. 2:08:40 PM MEGAN BOELTER, JD, Western Regional Director, Preventing Tobacco Addiction Foundation, Las Cruces, New Mexico, testified in support of SB 89. She stated that she is a public health law attorney practicing in the area of tobacco control and related disease for the past 18 years. For more than two decades the foundation has worked with multiple state and health advocates to raise the age for all tobacco and nicotine products to 21, including supporting the similar bill that passed last year in hopes of keeping cigarettes and dangerous nicotine products away from vulnerable youth. MS. BOELTER stated that this bill is a step to hold retailers accountable for illegal sales of these products and not the youth who have been captured by deceptive and predatory sales tactics. MS. BOELTER refuted the claims from some opponents. She stated that a study published last year indicated that "Tobacco 21" laws sizably reduced twelfth grade cigarette use, with a similar impact across the lower grades. She stated that e-cigarettes have not been FDA approved as cessation devices. The FDA had to include a disclaimer on its website to refute misinformation based on fraudulent industry claims, and advise that the use of e-cigarettes tends to prolong the process of quitting smoking. She said that SB 89 is consistent with federal law, Alaska's Tobacco Enforcement and Youth Education Program, and military policy. 2:11:48 PM JUNE ROGERS, representing self, Fairbanks, Alaska, testified in support of SB 89. She said she supports the age change to conform to federal law. She has contacted legislators over the years regarding health issues her family has undergone as a result of tobacco use. She expressed her gratitude to people who support the bill and suggested that it would be a step towards a healthier community. 2:12:55 PM JASON JONES, Owner, Legion Vapor, Eagle River, Alaska, gave public testimony on the effects of a heavy tax burden on vape shops. He commented that the age 21 rule has already been enforced for the last three years. He contended that a heavy tax burden was not a deterrent to underage vapers; minors continued buying from black market sources. He claimed that vape products can be purchased for as little as $1 on a Chinese website. MR. JONES differentiated vape shops from cannabis dispensaries and other smoke shops, clarifying that he refers to vape-only shops in that no other paraphernalia is in the inventory. He noted that numerous vape shops have gone out of business while stores that had varied inventory, such as gas stations and headshops, had started to carry vape products. He lamented the weight of having a high tax on everything in his shop. He noted the loss of jobs and family businesses. He mentioned that he is a father and shares the concerns of parents and others who do not want to see youth smoking or using vape products. 2:15:34 PM SENATOR MERRICK asked whether his shop is exclusively a retail shop or if it includes on-site vaping. MR. JONES responded that Legion Vapor is a retail shop, but vaping is permitted in the shop. He has been in business eight years, so his shop was grandfathered. 2:16:15 PM TABITHA BLADES, representing self, Soldotna, Alaska, testified in support of SB 89. She said that in her role as assistant principal she has daily contact with over 700 Alaskan teenagers. It is her job as disciplinarian to administer consequences for violations to school district policy, including every school vaping incident. She spends at least an hour each school day investigating vaping incidents and contacting parents regarding their use. The school invested thousands of dollars to install HALO vape detectors that provide real time detection alerts. Most students who are caught vaping are between 14 and 16 years of age. Over 80 percent of students that she speaks to have been using e-cigarettes for over a year unbeknownst to their parents. Sales occur "by the puff" so that addicted students can get through their day. Students who own vape devices use about a cartridge a week and aspire to different models. Many devices connect to apps and provide a puff score inciting competition among friends leading to gamified addiction amongst children. MS. BLADES said that students who do not vape feel unsafe in school restrooms, because they are frequently pressured to participate with, purchase from, or cover for students who vape. Many students report that they are addicted and can't stop. There is a school program that offers strategies on how to remain nicotine free MS. BLADES posited that raising the legal age to 21 would drastically affect the availability of vape products to minors. Most high school kids do know a 19-year-old, but rarely is a 21- year-old still hanging out with first-year high school students. Imposing a tax will help reduce availability to children with limited income. Students tell her that she is only aware of the tip of the iceberg. 2:19:33 PM SENATOR BISHOP asked whether she knows the cost for the added enforcement technology tools and smoking cessation classes for students. MS. BLADES answered that the HALO vape detectors cost $1200 each and her school has installed ten. She said the school is interested in installing more, as the detectors are helpful in monitoring vaping incidents. She said a staff member is running the vape cessation support group. 2:20:24 PM SENATOR BISHOP commented that these mitigation efforts are taking money from the Base Student Allegation (BSA) to enforce. 2:21:08 PM CHAIR BJORKMAN closed public testimony on SB 89 and held the bill in committee.