BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 24|
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THIRD READING
Bill No: SB 24
Author: Hill (D)
Amended: 6/1/15
Vote: 21
SENATE HEALTH COMMITTEE: 6-0, 4/15/15
AYES: Hernandez, Nguyen, Monning, Nielsen, Roth, Wolk
NO VOTE RECORDED: Hall, Mitchell, Pan
SENATE APPROPRIATIONS COMMITTEE: 6-1, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza, Nielsen
NOES: Bates
SUBJECT: Electronic cigarettes: licensing and restrictions
SOURCE: Author
DIGEST: This bill extends Stop Tobacco Access to Kids
Enforcement Act requirements to the sale of electronic
cigarettes (e-cigs), distinct from the definition of tobacco
products, and requires enforcement, as specified, to begin July
1, 2016; extends current smoke-free laws and penalties to
e-cigs; requires e-cig cartridges to be in childproof packaging,
as defined; broadens the current definition of e-cigs, as
specified; requires all retailers of e-cigs to apply for
licensure to sell e-cigs, as specified; and raises the minimum
age requirement to purchase and use e-cigs to 21, as specified.
ANALYSIS:
Existing law:
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1)Authorizes the California Department of Public Health (DPH),
under the Stop Tobacco Access to Kids Enforcement (STAKE) Act,
to assess civil penalties ranging from $400 to $6,000,
depending on the number of infractions, against any person,
firm, or corporation that sells, gives, or in any way
furnishes tobacco products to a person who is under the age of
18.
2)Establishes "smoke-free laws," which prohibit the smoking of
tobacco products in various places, including, but not limited
to, school campuses, public buildings, places of employment,
apartment buildings, day care facilities, retail food
facilities, health facilities, and vehicles when minors are
present, and makes a violation of some of the prohibitions
punishable as an infraction.
3)Defines "tobacco product" as any product containing tobacco
leaf, including, but not limited to, cigarettes, cigars, pipe
tobacco, snuff, chewing tobacco, dipping tobacco, bidis, or
any other preparation of tobacco.
4)Defines "electronic cigarette" as a device that can provide an
inhalable dose of nicotine by delivering a vaporized solution.
Prohibits a person from selling or otherwise furnishing an
electronic cigarette to a person under the age of 18.
5)Requires the Board of Equalization (BOE), under the Cigarette
and Tobacco Products Licensing Act, to administer a statewide
program to license cigarette and tobacco products
manufacturers, importers, distributors, wholesalers, and
retailers. Requires a retailer to obtain a separate license
for each retail location that sells cigarettes and tobacco
products and to pay a one-time fee of $100 for each license.
Requires BOE to suspend or revoke a retailer's license upon
notification by DPH of certain STAKE Act violations. Permits
BOE to assess various civil penalties for violations of the
Licensing Act.
This bill:
1)Extends the requirements of the STAKE Act to the sale of
e-cigs, distinct from the definition of tobacco products, and
requires DPH to enforce the provisions related to e-cigs
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beginning July 1, 2016. Makes it a crime if retailers fail to
post a notice on or after July 1, 2016, at each point of
purchase that states the sale of e-cigs to minors is illegal.
2)Adds e-cigs to current smoke-free laws and makes the use of
them in restricted areas a crime, which is subject to the same
penalties as tobacco products.
3)Requires all cartridges for e-cigs and solutions for filling
or refilling an e-cig to be in childproof packaging, defined
as packaging that contains elements, including, but not
limited to, safety caps or blister packs, designed to protect
children from being able to open and ingest the contents.
4)Broadens the current definition of e-cigs to include any
aerosol or vapor cartridge or other container of a solution,
that may or may not contain nicotine, that is intended to be
used with or in an e-cig.
5)Requires retailers of e-cigs to apply for a license from BOE
to sell e-cigs beginning July 1, 2016, and to pay a one-time
fee not to exceed $280 for each e-cig retail location.
Requires retailers to display the license at each retail
location by September 30, 2016. Requires BOE to administer a
statewide program to license e-cig retailers.
6)Raises the minimum age requirement to purchase and use e-cigs
to 21, contingent upon the passage and enactment of Senate
Bill 151 (Hernandez).
Comments
1)Author's statement. According to the author, youth use of
e-cigs is on the rise. According to the National Institute on
Drug Abuse, youth use is now higher than that of traditional
cigarettes: 17.1 percent of 12th graders reported using an
e-cig in the past month, while only 13.6 percent reported
smoking a traditional cigarette in the past month.
Nevertheless, California's premier law to prevent youth access
to cigarettes and other tobacco products-STAKE Act-does not
extend to e-cigs. E-cig retailers also do not have to be
licensed by the state. Additionally, an increasing number of
children in California are being poisoned by e-cig liquids. In
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2012, there were 28 calls to the California Poison Control
System for liquid nicotine poisoning; in 2013, there were 106
calls; and in 2014, there were 243 calls. At least 60 percent
of calls were for children 5 years old or younger. Nothing in
current law requires that e-cig liquids be equipped with child
proof packaging. Children can easily open and ingest the often
fruit flavored e-cig liquids. Nicotine liquids can be toxic
even if ingested in small amounts-just one teaspoon of liquid
nicotine can be deadly.
2)E-cigs. According to a 2014 report by the World Health
Organization (WHO), e-cigs are battery heated devices that
deliver nicotine by heating solution that users inhale. E-cig
cartridges (e-liquids) contain liquid nicotine, and chemicals
introduced into a liquid vehicle produce aromas and various
flavors such as tobacco, chocolate mint, cotton candy, gummy
bear, and grape. The concentration of nicotine varies both
across different manufacturers and sometimes within the same
brand. The report states that although some e-cigs are shaped
to look like conventional cigarettes, they also take the form
of everyday items like pens and USB flash drives.
3)Are e-cigs safe? The Food and Drug Administration (FDA) states
that the safety and efficacy of e-cigs has not been fully
studied. Some of the uncertainty stems from the wide variety
of devices and liquids available, and therefore separate
components need to be studied, including the e-cig device, the
e-liquid, the inhaled aerosol, and the exhaled aerosol that
may be inhaled secondhand. E-cig devices vary in their
engineering, battery voltage, and ability to heat the
e-liquid, meaning e-liquids can deliver a different aerosol
and nicotine dose depending on the device. E-liquids currently
have no requirements for labeling, and The National Institute
of Health (NIH) states that there is poor correlation between
labeled and actual nicotine content.
A July 2014 report, "Electronic nicotine delivery systems
(ENDS)," by the WHO stated that existing evidence shows e-cigs
do not produce merely a water vapor but an aerosol that poses
serious threats to adolescents and fetuses. The aerosol
inhaled by smokers contains ultra-fine particulate matter that
gets trapped in the small airways of the lungs. According to a
2013 study entitled "Does electronic cigarette consumption
cause passive vaping?," aerosol exhaled by e-cig smokers
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contains nicotine, formaldehyde, and other chemicals, although
at much lower levels than emissions from conventional
cigarettes, and nicotine metabolites were found in nonsmokers
exposed to the exhaled aerosol. A 2012 publication from
Reproductive Toxicology showed a wide variety of toxicity on
human cells, and that toxicity did not correlate with nicotine
concentration but did correlate with the amount of flavor
additives that were used. Since California passed legislation
prohibiting the sale of e-cigs to minors, the Attorney
General's office has been investigating a number of e-cig
companies that sell products on the Internet to ensure
compliance with the statute, as well as other consumer
protection provisions. Many companies are coming into
compliance voluntarily.
4)Health risks and increase in use of e-cigs. DPH's State Health
Officer released a report in January 2015, "A Community Health
Threat," about e-cigs that cites, among other things, the
concern about the health risks of e-cigs and the growing
number of e-cig users. E-cig poisonings increased from seven
in 2012 to 154 in 2014. By the end of 2014, e-cig poisonings
to young children tripled in one year, making up more than 60
percent of all e-cig poisoning calls, according to the report.
The State Health Officer also noted that in California, use of
e-cigs among those between the ages of 18 and 29 tripled in
one year, from 2.3 percent to 7.6 percent. Nearly 20 percent
of these young adult e-cig users had never smoked traditional
cigarettes. The State Health Officer concludes that there is a
high need to educate the public about e-cig safety concerns
and that existing laws currently in place to protect minors
and the general public from traditional tobacco products
should be extended to cover e-cigs.
5)Marketing of e-cigs as cessation devices. The DPH report also
cites the unrestricted marketing tactics for e-cigs. E-cig
marketing continues to claim they are a safer alternative to
traditional cigarettes. To date, the effectiveness of e-cigs
as cessation aids has not been proven by e-cig companies or
approved by the FDA as such. The report states that a number
of studies actually show that e-cig users are no more likely
to quit than smokers of traditional cigarettes, and in one
study, 89 percent of e-cig users were still using them one
year later. Dual use of e-cigs and traditional cigarettes
continues to rise, which, according to the report, may be
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attributed to the unrestricted marketing of e-cigs. E-cig
companies are using tactics previously used by tobacco
companies that have since been banned. These include running
unrestricted ads and promotions on TV, radio, and social
media, and in magazines, newspapers, and retail stores, as
well as sponsoring sport and music events and giving out free
samples, according to the report.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
One-time costs of about $180,000 to revise regulations and
educational materials relating to the prohibition on the sale
of tobacco products to minors by the DPH (General Fund or
tobacco tax funds).
Ongoing costs in the hundreds of thousands per year for
additional survey activities at retail stores selling
electronic cigarettes (General Fund or tobacco tax funds).
Current federal law requires the state to determine the rate
at which individuals under 18 years of age can illegally
purchase tobacco products. The DPH conducts random inspections
at about 750 retail locations annually to determine a
statewide average rate at which retailers are not in
compliance with state and federal law. The total annual cost
to conduct the current survey is $400,000.
Federal law would continue to require the DPH to conduct the
existing survey. There are about 1,100 retail locations that
only sell electronic cigarettes and related products. Because
this bill would expand the universe of retail locations
subject to the inspection requirement, the DPH is likely to
incur additional costs to survey a sample of those retail
locations to accurately determine the rate at which minors can
purchase electronic cigarettes.
Ongoing costs in the hundreds of thousands per year for
enforcement actions relating to illegal sales of tobacco
products and electronic cigarettes to minors (General Fund or
tobacco tax funds).
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Under current law, the DPH enforces the law prohibiting the
sale of tobacco products to minors by conducting compliance
inspections using youth decoy purchasers and following up on
complaints from the public. The total annual cost for the
DPH's enforcement program is $1.6 million per year.
By adding electronic cigarette retailers to the current
enforcement program, the bill will increase the DPH's
enforcement efforts, particularly for retailers who do not
already sell traditional tobacco products. The amount of that
increased enforcement activity will depend both on the number
of additional retailers covered by the law and the compliance
rate of those retailers (or if retailers of traditional
tobacco products are found to be selling electronic cigarettes
to minors at higher rates than traditional tobacco products).
Because the state has fully allocated the existing federal
funding for this program, any additional costs will be borne
by the General Fund, tobacco tax funds, or other fund sources.
Ongoing licensing costs of about $300,000 for the BOE to
license retailers who sell electronic cigarettes but are not
currently licensed because they do not sell tobacco products
(Compliance Fund). Under current law, the BOE licenses
wholesalers and retailers of tobacco products, to facilitate
the collection of tobacco taxes. This bill will require the
BOE to also license electronic cigarette retailers. Currently,
the BOE expends about $280 per licensee to operate the
licensing program. Licensees pay a one-time licensing fee of
$100. The remaining program costs are offset with tobacco tax
revenues. According to the Stanford Prevention Center, there
are about 1,000 retailers in the state that specialize in
electronic cigarettes and do not sell other tobacco products.
The BOE would incur additional licensing costs to license
those retailers, which would be offset by the initial
licensing fee. The author's amendments authorize the BOE to
assess an additional licensing fee up to $280 to cover the
BOE's licensing costs.
SUPPORT: (Verified 5/28/15)
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California Poison Control System
Junior Leagues of California
California College and University Police Chiefs
Consumer Federation of California
City of San Marcos
California Police Chiefs Association
OPPOSITION: (Verified5/28/15)
American Cancer Society
American Heart Association
American Lung Association
Smoke-Free Alternatives Trade Association
Smoke-Free Marin Coalition
Solano County
ARGUMENTS IN SUPPORT: Supporters argue that the increase in
e-cig use, sales, and marketing is alarming. They state that use
has increased particularly by youth who use the devices to smoke
illegal substances. Calls to poison control centers have also
risen because of children accessing e-cig cartridges. Supporters
believe that this bill will curb youth e-cig use by extending
STAKE Act laws to e-cigs, as well as requiring that e-cig
packaging be childproof.
ARGUMENTS IN OPPOSITION: Organizations writing in
opposition, unless the bill is amended, argue that this bill
threatens decades of tobacco control and public health campaigns
in California by distinguishing e-cigs from tobacco products.
They state that the tobacco industry has been working diligently
to ensure that e-cigs are defined separately from tobacco
products in order to weaken regulation of e-cigs. Also, by not
including all components that make up e-cigs, certain parts sold
separately could still be sold to minors. They argue that the
FDA and DPH recommend that e-cigs be regulated in the same
manner as tobacco products. These organizations would like to
see this bill amended to include only the requirement that e-cig
cartridges be packaged in a childproof manner.
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Prepared by:Reyes Diaz / HEALTH /
6/1/15 19:25:16
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