BILL ANALYSIS SENATE HEALTH COMMITTEE ANALYSIS Senator Elaine K. Alquist, Chair BILL NO: SB 882 S AUTHOR: Corbett B AMENDED: April 28, 2010 HEARING DATE: May 5, 2010 8 CONSULTANT: 8 Dunstan/ 2 SUBJECT Electronic cigarettes SUMMARY This urgency measure requires cities and counties to revoke the license of a business that, on two or more occasions, provides or offers electronic cigarettes, as defined, to a person less than 18 years of age, and makes it unlawful to sell or furnish electronic cigarettes to a person less than 18 years of age. CHANGES TO EXISTING LAW Existing state law: Authorizes cities and counties to issue business licenses, set licensing fees and collect licensing fees. Establishes the Stop Tobacco Access to Kids Enforcement (STAKE) Act which contains several provisions, including civil penalties for the sale of tobacco to minors. Requires a retailer to maintain a license issued by the Board of Equalization to engage in the sale of cigarettes or tobacco products. Prohibits any person, firm, or corporation from selling, giving or in any way furnishing cigarettes or tobacco products to any person who is under the age of 18 years and provides that the punishment for violations shall be a fine Continued--- STAFF ANALYSIS OF SENATE BILL 882 (Corbett) Page 2 of two hundred dollars ($200) for the first offense, five hundred dollars ($500) for the second offense, and one thousand dollars ($1,000) for the third offense. This bill: Requires cities and counties to revoke the license of a business that, on two or more occasions, provides or offers electronic cigarettes to a person less than 18 years of age. Defines "electronic cigarette" as any device that can provide inhaled doses of nicotine by delivering a vaporized solution. Makes it unlawful to sell or otherwise furnish electronic cigarettes to a person less than 18 years of age. Provides that the bill's provision shall become effective immediately as an urgency measure. Establishes how any state mandated local costs shall be reimbursed. Provides that the Legislature makes various findings and declarations regarding electronic cigarettes. FISCAL IMPACT This bill moved out of the Senate Appropriations Committee pursuant to Section 28.8. BACKGROUND AND DISCUSSION According to the author, electronic cigarettes, which are rechargeable, battery operated devices that allow the user to inhale a smokeless vapor often containing nicotine, are completely unregulated and available for purchase by minors. The author argues that producers of electronic cigarettes have used a loophole in state and federal law to sell their product without age restrictions. The author notes that this is occurring despite initial studies by the U.S. Food and Drug Administration that have found that electronic cigarettes contain known carcinogens and misrepresentations in labeling. The author also states that the FDA has sent out a health warning about this product. The author notes that local county tobacco control agencies have reported that minors have been able STAFF ANALYSIS OF SENATE BILL 882 (Corbett) Page 3 to successfully purchase electronic cigarettes in mall kiosks, and by locating these kiosks close to food courts and popular teen stores, are successfully enticing young consumers to hear their targeted pitches on flavored cartridges and the appeal of a product that can be used in all public places since it emits no smoke. The author also points to a 2008 report prepared for the State Department of Public Health that found, with regard to the California Tobacco Control Program, law enforcement agencies continue to rank policies and procedures, such as suspension or revocation of business licenses, and civil and criminal penalties for owners and clerks who sell tobacco to minors, as effective strategies to reduce youth access to tobacco. Electronic cigarettes Electronic cigarettes are neither cigarettes nor a tobacco product. They are electronic devices that are manufactured to look like cigarettes that cost between $40 and $70. They are battery powered and provide the person who uses them a vaporized liquid to inhale. The liquid solution may contain nicotine, which is then delivered to the user. The solution also comes in a variety of flavors, such as chocolate, mint and apple, which are thought to make them appealing to children and adolescents. Since electronic cigarettes are not cigarettes, they fall outside of the tobacco regulatory scheme at the state and federal levels. As an unregulated product, there is no age limit for purchasing them. Electronic cigarettes do not contain warnings, which are required on nicotine replacement therapies and tobacco products. These products have also not been subject to an analysis to determine the possible impact on consumer health. The amount of nicotine they deliver is unknown. The existence and possible levels of other compounds they may contain is uncertain, although the FDA has researched some samples and announced that they contain toxic and carcinogenic chemicals. Studies are underway to examine the health effects, but the results won't be known for many years. Nicotine Nicotine is highly addictive. It is both a stimulant and a sedative to the central nervous system. The ingestion of nicotine has an almost immediate effect because it causes a discharge of epinephrine from the adrenal cortex. This stimulates the central nervous system and other endocrine STAFF ANALYSIS OF SENATE BILL 882 (Corbett) Page 4 glands, which causes a sudden release of glucose. Stimulation is then followed by depression and fatigue, leading the abuser to seek more nicotine. Nicotine is absorbed readily from tobacco smoke in the lungs, and it does not matter whether the tobacco smoke is from cigarettes, cigars, or pipes. Nicotine also is absorbed readily when tobacco is chewed. With regular use of tobacco, levels of nicotine accumulate in the body during the day and persist overnight. Thus, daily smokers or chewers are exposed to the effects of nicotine for 24 hours each day. Nicotine taken by cigarette or cigar smoking takes only seconds to reach the brain and has a direct effect on the body for up to 30 minutes. Nicotine is one of the most heavily used addictive drugs in the United States. Cigarette smoking has been the most popular method of taking nicotine since the beginning of the 20th century. In 1989, the U.S. Surgeon General issued a report that concluded that cigarettes and other forms of tobacco, such as cigars, pipe tobacco, and chewing tobacco, are addictive and that nicotine is the drug in tobacco that causes addiction. In addition, the report determined that smoking was a major cause of stroke and the third leading cause of death in the United States. Because electronic cigarettes are a means of delivering nicotine, public health officials are concerned that the use of them may lead to nicotine addiction, especially among youth. Concerns have also been raised that this nicotine addiction could lead to increased underage smoking. Health agency response Because they deliver nicotine, these devices are sometimes marketed for nicotine replacement therapy. The World Health Organization (WHO) does not consider the electronic cigarette to be a legitimate smoking cessation aid, and has demanded that marketers immediately remove from their materials any suggestions that the WHO considers electronic cigarettes safe and effective. WHO states that, to its knowledge, "No rigorous, peer-reviewed studies have been conducted showing that the electronic cigarette is a safe and effective nicotine replacement therapy. WHO does not discount the possibility that the electronic cigarette could be useful as a smoking cessation aid." STAFF ANALYSIS OF SENATE BILL 882 (Corbett) Page 5 Many countries have taken some action to regulate electronic cigarettes. The actions range from an outright ban of nicotine in electronic cigarettes (Australia, Singapore) to treating them as a medicinal product with the attendant regulation as a device that delivers a drug. (Austria, Denmark). Their use is not restricted currently in the United Kingdom, but regulation as a medical device is being considered by the nation's health agency. In Canada, Health Canada issued an advisory against electronic cigarettes. The advisory stated that, "Although these electronic smoking products may be marketed as a safer alternative to conventional tobacco products and, in some cases, as an aid to quitting smoking, electronic smoking products may pose risks such as nicotine poisoning and addiction." The FDA has opined that nicotine is a drug and therefore subject to agency regulation and that electronic cigarettes are devices used to deliver drugs. For that reason, the FDA asserts that they must be approved by the FDA before being marketed within the United States. Before approval could be gained, the manufacturers would have to show that electronic cigarettes are safe and effective. Pursuant to its authority, the FDA has been examining and detaining shipments of e-cigarettes at the U.S. border. The FDA states that the products it has examined meet the definition of a combination drug-device product under the Federal Food, Drug and Cosmetic Act. However, the FDA has not taken any steps to remove them from the U.S. market. The FDA has been challenged regarding its jurisdiction over electronic cigarettes in a case currently pending in federal courts (Smoking Everywhere, Inc. v. FDA). The basis of the challenge is that electronic cigarettes are nontherapeutic alternatives to cigarettes; hence, they do not fall under FDA regulation. The lower court agreed with this logic and stated that they should be regulated as tobacco products and enjoined FDA from acting to block imports. The FDA is appealing the ruling and the U.S. Court of Appeals has reinstated the FDA's right to regulate the importation of electronic cigarettes pending final disposition of the case. Prior legislation SB 400 (Corbett) of 2009 provided that electronic STAFF ANALYSIS OF SENATE BILL 882 (Corbett) Page 6 cigarettes are drugs under state law, making them subject to the Sherman Food, Drug, and Cosmetic Law and allowed the Department of Public Health (DPH) to halt the sale, distribution, or offering of electronic cigarettes as part of its enforcement of the Stop Tobacco Access to Kids Enforcement (STAKE) Act. This bill was vetoed and the Governor stated in his veto message, "I cannot sign a measure that also declares them [electronic cigarettes] a federally regulated drug when the matter is currently being decided through pending litigation." SJR 8 (Corbett), requests that the federal Food and Drug Administration prohibit all sales of electronic cigarettes until they have been found by the Food and Drug Administration to be safe. This resolution is in Assembly Governmental Organization Committee. Arguments in support Supporters argue that SB 882 would take significant steps to prevent minors from purchasing electronic cigarettes. The Health Officers Association of California points out that tobacco use is a major public health problem, and cigarette use among minors is of great concern to public health professionals. They argue that electronic cigarettes are an unregulated alternative to cigarettes which, because they have not yet been reviewed by the FDA, are not yet illegal to sell to minors and manufacturers and distributors of electronic cigarettes are taking advantage of this technicality to sell electronic cigarettes in mall kiosks and other places frequented by teenagers. They argue that SB 882 would close this loophole. STAFF ANALYSIS OF SENATE BILL 882 (Corbett) Page 7 COMMENTS 1. Author's proposed amendments to remove the penalty of business license revocation. The penalty of license revocation for two violations of the ban on selling or furnishing electronic cigarettes to underage purchasers is much more punitive than the penalty for violations of underage sales laws for cigarettes and tobacco products. To remedy this, the author proposes to delete the penalty of business license revocation and substitute a fine that is the same as the Penal Code provisions for underage sales of cigarettes and tobacco products. Proposed Amendments Page 3, line 15 to page 4, line 9, delete. Page 4, after line 17, insert (c) Any violation of this section is an infraction punishable by a fine not exceeding two hundred dollars ($200) for a first violation, by a fine not exceeding five hundred dollars ($500) for a second violation, or by a fine not exceeding one thousand dollars ($1000) for a third and for each subsequent violation. PRIOR ACTIONS Senate Business, Professions and Economic Development: 5-2 Senate Appropriations: This bill moved out of the Senate Appropriations Committee pursuant to Section 28.8. POSITIONS Support: First 5 Association of California Health Officers Association of California (HOAC) Oppose: None received -- END --