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  




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          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  




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          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."  




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          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  




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          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.



















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                                     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

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