BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SBX2 5|
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THIRD READING
Bill No: SBX2 5
Author: Leno (D), et al.
Amended: 8/26/15
Vote: 21
SENATE PUBLIC HEALTH & DEVELOP. SVCS. COMM.: 9-3, 8/19/15
AYES: Hernandez, Beall, Hall, Leno, McGuire, Mitchell,
Monning, Pan, Wolk
NOES: Morrell, Moorlach, Nielsen
NO VOTE RECORDED: Anderson
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/24/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
SUBJECT: Electronic cigarettes
SOURCE: American Cancer Society Cancer Action Network
American Heart Association/American Stroke
Association
American Lung Association
DIGEST: This bill recasts and broadens the definition of
"tobacco product" in current law to include electronic
cigarettes as specified; extends current restrictions and
prohibitions against the use of tobacco products to electronic
cigarettes; extends current licensing requirements for
manufacturers, importers, distributors, wholesalers, and
retailers of tobacco products to electronic cigarettes; and
requires electronic cigarette cartridges to be child-resistant.
ANALYSIS:
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Existing law:
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. Prohibits selling tobacco products without a valid
license, and makes violations punishable as a misdemeanor.
6)Requires a retailer, for purposes of collecting a tobacco tax,
to obtain a separate license for each retail location that
sells cigarettes and tobacco products and pay a one-time fee
of $100. Requires BOE to suspend or revoke a retailer's
license upon notification by DPH of certain STAKE Act
violations.
This bill:
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1)Recasts and broadens the definition of "tobacco product" to
include a product made or derived from tobacco or nicotine
that is intended for human consumption, whether smoked,
heated, chewed, absorbed, dissolved, inhaled, snorted,
sniffed, or ingested by any other means, and includes
electronic devices that deliver nicotine or other substances
to the person inhaling from the device, including, but not
limited to, an electronic cigarette, cigar, pipe, or hookah;
and any component, part, or accessory of a tobacco product,
whether or not sold separately. By broadening the definition
of "tobacco products," this bill extends all existing laws
that relate to tobacco products to electronic cigarettes.
2)Exempts from the definition of "tobacco product" a product
that has been approved by the Food and Drug Administration
(FDA) for sale as a tobacco cessation product or for other
therapeutic purposes where the product is marketed and sold
solely for such an approved purpose.
3)Requires retailers of electronic cigarettes, which are not
subject to a tobacco tax, to apply for a license and pay a
license fee, in an amount to be determined by the BOE,
beginning October 1, 2016.
4)Requires all cartridges for electronic cigarettes and
solutions for filling or refilling an electronic cigarette to
be in child-resistant packaging, as defined by the Code of
Federal Regulations.
Comments
1)Author's statement. According to the author, California has
invested 25 years and $2.5 billion in public health measures
aimed at reducing tobacco use. However, that investment is now
threatened by a new tobacco product: electronic cigarettes.
According to a DPH report, e-cigarette aerosol contains at
least 10 chemicals that are on California's Proposition 65
list of chemicals known to cause cancer, birth defects or
other reproductive harm. Despite industry claims that
e-cigarettes do not present secondhand smoke concerns, studies
have found formaldehyde, benzene, and tobaccospecific
nitrosamines (a carcinogen) coming from the secondhand
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emissions of ecigarettes.
Despite these potentially serious risks to public health,
e-cigarette use is growing nationwide. The Centers for Disease
Control and Prevention found that more than a quarter of a
million youth who had never smoked a cigarette used electronic
cigarettes in 2013. electronic cigarettes come in enticing
flavors such as gummy bear and mango. While California
currently bans the sale of e-cigarettes to minors under the
age of 18, many youth are still able to access the product.
DPH recommends that "[e]xisting laws that currently protect
minors and the general public from traditional tobacco
products should be extended to cover e-cigarettes." SBX2 5
will do exactly this by including e-cigarettes within
California's smoke-free laws and the STAKE Act.
2)What is an electronic cigarette? According to a 2014 report
by the World Health Organization (WHO), electronic cigarettes
are battery heated devices that deliver nicotine by heating a
solution that users inhale. Electronic cigarette cartridges
(e-liquids) contain liquid nicotine, and chemicals introduced
into a liquid vehicle produce various flavors such as tobacco,
cotton candy, and gummy bear. Although some electronic
cigarettes look like conventional cigarettes, others take the
form of items such as pens and USB flash drives.
3)Electronic cigarette safety. The FDA states that the safety
and efficacy of electronic cigarettes 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 electronic
cigarette device, the e-liquid, the inhaled aerosol, and the
exhaled aerosol that may be inhaled secondhand. Electronic
cigarette 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 states "[t]here is poor
correlation between labeled and actual nicotine content."
A 2014 article in the journal Addiction states that because of
device inconsistencies, there is also no correlation between
the nicotine content in the e-liquid and the resulting inhaled
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aerosol. A July 2014 report, "Electronic nicotine delivery
systems (ENDS)," by the WHO stated that existing evidence
shows electronic cigarettes do not produce merely a water
vapor, but an aerosol that poses serious threats to
adolescents and fetuses. According to a 2013 study entitled
"Does electronic cigarette consumption cause passive vaping?,"
aerosol exhaled by electronic cigarette users contains
nicotine, formaldehyde, and other chemicals.
4)DPH report. The California State Health Officer released a
report in January 2015, "A Community Health Threat," about
electronic cigarettes that cites, among other things, the
concern about the health risks of electronic cigarettes, the
growing number of electronic cigarette users, and the
unrestricted marketing tactics for electronic cigarettes.
Electronic cigarette poisonings increased from seven in 2012
to 154 in 2014.
To date, the effectiveness of electronic cigarettes as
cessation aids has not been proven or approved by the FDA as
such. The report states that a number of studies show that
electronic cigarette users are no more likely to quit than
regular smokers. Electronic cigarette companies are using
tactics previously used by tobacco companies that have since
been banned, such as advertising on TV, radio, and social
media, and sponsoring sport and music events. The State Health
Officer concludes that existing laws currently in place to
protect minors and the general public from traditional tobacco
products should be extended to cover electronic cigarettes.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
1)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 DPH (General Fund or tobacco
tax funds).
2)Ongoing costs in the tens of thousands to low hundreds of
thousands per year for additional survey activities at retail
stores selling electronic cigarettes (General Fund or tobacco
tax funds).
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Current federal law requires the state to determine the rate
at which minors can illegally purchase tobacco products. 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.
There are many retail locations that sell both traditional
tobacco products as well as electronic cigarettes. There are
also a significant number of retail locations that only sell
electronic cigarettes and related products. Because this bill
expands the universe of retail locations subject to the
inspection requirement, DPH will need to conduct additional
visits to newly regulated retail locations which only sell
electronic cigarettes. There are about 1,000 retailers in the
state that sell electronic cigarettes but not tobacco
products. 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.
Because retailers that sell both tobacco products and
electronic cigarettes are not likely (in the long-term) to
sell those products to minors at different rates, DPH will
likely be able to combine survey efforts at retailers that
sell both types of products.
3)Ongoing costs in the hundreds of thousands per year for
enforcement actions relating to illegal sales of electronic
cigarettes to minors (General Fund or tobacco tax funds).
Under current law, 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 DPH's
enforcement program is $1.6 million per year. By adding
additional retailers to the current prohibition on sales to
minors, the bill will increase 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
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rates than traditional tobacco products). The total
enforcement cost is unknown at this time, but is likely to be
in the hundreds of thousands per year, based on existing
enforcement costs. 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.
4)Ongoing licensing costs of about $300,000 for 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, BOE licenses wholesalers and
retailers of tobacco products, to facilitate the collection of
tobacco taxes. This bill will require BOE to also license
electronic cigarette retailers. Currently, 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. BOE would incur additional
licensing costs to license those retailers, which would be
offset by the existing initial licensing fee and a new
one-time licensing fee on electronic cigarette retailers not
currently licensed by BOE.
5)No anticipated change in tobacco tax revenue (General Fund and
special fund). This bill does not change the definition of
"tobacco product" in the Revenue and Taxation Code to include
electronic cigarettes. Thus, this bill does not extend the
state's existing tax on those products to electronic
cigarettes.
SUPPORT: (Verified8/25/15)
American Cancer Society Cancer Action Network (co-source)
American Heart Association/American Stroke Association
(co-source)
American Lung Association (co-source)
Attorney General Kamala Harris
Alameda County Board of Supervisors
American Academy of Pediatrics
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Americans for Nonsmokers' Rights
Association of California Healthcare Districts
Association of Northern California Oncologists
Breathe California
California Academy of Family Physicians
California Academy of Preventive Medicine
California Black Health Network
California Chapter of the American College of Emergency
Physicians
California Chronic Care Coalition
California College and University Police Chiefs
California Dental Association
California Medical Association
California Narcotic Officers' Association
California Optometric Association
California Pan-Ethnic Health Network
California Pharmacists Association
California Police Chiefs Association
California Primary Care Association
California Society for Addiction Medicine
California State Association of Counties
Common Sense Kids Action
Community Action Fund of Planned Parenthood Orange & San
Bernardino Counties
County Health Executives Association
County Health Executives Association of California
First 5 Association of California
Health Officers Association of California
Kaiser Permanente
Los Angeles City Attorney Mike Feuer
March of Dimes, California Chapter
Medical Oncology Association of Southern California
Planned Parenthood Advocacy Project Los Angeles
Planned Parenthood Mar Monte
Planned Parenthood Northern California Action Fund
Planned Parenthood of the Pacific Southwest
San Dieguito Alliance for Drug Free Youth
San Mateo County Tobacco Education Coalition
Santa Clara County Board of Supervisors
SEIU California
Sonoma County Board of Supervisors
OPPOSITION: (Verified8/25/15)
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Smoke-Free Alternative Trade Association
ARGUMENTS IN SUPPORT: The American Cancer Society Cancer Action
Network, the co-sponsor of this bill, the California Primary
Care Association, and the California Black Health Network state
that defining electronic cigarettes as a tobacco product in the
STAKE act tackles the issue of retailers selling electronic
cigarettes to minors, which is critical in preventing youth
tobacco use. The cosponsor also states that this bill will
address the issue of second-hand exposure to electronic
cigarette aerosol by prohibiting the use of electronic
cigarettes in all places where smoking is currently prohibited.
The American Lung Association, another cosponsor of the bill,
and Kaiser Permanente, state that SBX2 5 aligns state laws with
proposed federal regulations that define electronic cigarettes
as tobacco products per FDA oversight. Breathe California states
that SBX2 5is the best way to face the threat that electronic
cigarettes pose to young people. The California Dental
Association states that SBX2 5 will ensure electronic cigarettes
receive the same oversight and regulation as other harmful
tobacco products sold at the retail level. SEIU California,
Common Sense Kids Action, Association of Northern California
Oncologists , and the Medical Oncology Association of Southern
California state that, although California bans the sale of
electronic cigarettes to minors, many youth are still able to
access these products due to lack of oversight and enforcement.
The California Medical Association states that electronic
cigarettes should be classified as tobacco products because they
contain derived nicotine.
ARGUMENTS IN OPPOSITION: The Smoke-Free Alternative Trade
Association states that enactment of SBX2 5 would shut down
hundreds of small business-owned vape shops throughout the
state, and that the existing statutory definition of electronic
cigarettes can achieve the public policy goals of protection of
children and minors.
Prepared by:Shannon Muir / HEALTH /
8/26/15 17:31:51
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