BILL ANALYSIS Ó SB 5 X2 Page 1 (Without Reference to File) SENATE THIRD READING SB 5 X2 (Leno) As Amended March 2, 2016 Majority vote SENATE VOTE: 25-13 SUMMARY: Defines the term smoking for purposes of the Stop Tobacco Access to Kids Enforcement (STAKE) Act; expands the definition of a tobacco product to include electronic cigarettes (e-cigarettes); and, extends current restrictions and prohibitions against the use of tobacco products to e-cigarettes. Establishes an annual e-cigarette retailer licensing fee of $265 per location. Specifically, this bill: 1)Defines smoking as inhaling, exhaling, burning, or carrying any lighted or heated cigar, cigarette, or pipe, or any other lighted or heated tobacco or plant product intended for inhalation, whether natural or synthetic, in any manner or in any form. Includes the use of an electronic smoking device that creates an aerosol or vapor, in any manner or in any form, or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking. SB 5 X2 Page 2 2)Expands the definition of tobacco product to include an electronic device that delivers nicotine or other vaporized liquids to the person inhaling from the device, including, but not limited to an e-cigarette, cigar, pipe, or hookah. Includes in the definition any component, part, or accessory of a tobacco product, whether or not sold separately. 3)Clarifies that a tobacco product does not include a product that has been approved by the United States 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. 4)Requires all cartridges for e-cigarettes and solution for filling or refilling an e-cigarette to be in childproof packaging. Defines child-resistant packaging as packaging that meets current federal law. 5)Establishes an annual e-cigarette retailer licensing fee of $265 per location; specifies the format for the application; and, requires the Board of Equalization (BOE) to provide electronic means for applicants to download and submit applications. 1)Contains double-jointing language to resolve potential code conflict with AB 6 X2 (Cooper), SB 6 X2 (Monning), AB 7 X2 (Stone), SB 7 X2 (Hernandez), and AB 8 X2 (Wood) of the current legislative session. EXISTING LAW: 1)Authorizes the California Department of Public Health (DPH), under the STAKE Act, to assess civil penalties ranging from SB 5 X2 Page 3 $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 a 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 an e-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 e-cigarette to a person under the age of 18. 5)Requires the 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 SB 5 X2 Page 4 license upon notification by DPH of certain STAKE Act violations. 7)Prohibits, under the STAKE Act, any person from distributing or selling tobacco products via the United States Postal Service (USPS), or any other public or private postal or package delivery service, to any purchaser who is a minor. 8)Bans, under the federal Prevent All Cigarette Trafficking Act (PACT Act), the shipment of tobacco products through the USPS. 9)Federal law, the Poison Prevention Packaging Act of 1970 requires the use of child-resistant packaging for prescription drugs, over-the-counter drugs, household chemicals, and other hazardous materials that could be considered dangerous for children. FISCAL EFFECT: This bill, as amended, has not been analyzed by a fiscal committee. COMMENTS: 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: e-cigarettes. According to a DPH report, e-cigarette aerosol contains at least 10 chemicals that are on California's Proposition 65 (1986) 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 emissions of ecigarettes. SB 5 X2 Page 5 The author notes, 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 e-cigarettes in 2013. E-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. The author concludes that 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," and this bill will do exactly this by including e-cigarettes within California's smoke-free laws and the STAKE Act. BACKGROUND. E-cigarettes are defined in California law as a device that can provide an inhalable dose of nicotine by delivering a vaporized solution. Typically, they are composed of a rechargeable, battery-operated heating element, a replaceable cartridge that may contain nicotine or other chemicals, and an atomizer that, when heated, converts the contents of the cartridge into a vapor. This vapor is then inhaled by the user. These products are often made to look like such products as cigarettes, cigars, and pipes. They are also sometimes made to look like everyday items such as pens and Universal Serial Bus memory sticks, for people who wish to use the product without others noticing. The health effects of e-cigarettes have not been fully studied, so consumers currently don't know the potential risks of e-cigarettes, how much nicotine or other potentially harmful chemicals are being inhaled during use, or whether there are any benefits associated with using these products. According to the January 2015 State Health Officer's report on e-Cigarettes, "A Community Health Threat," e-cigarette use is rising rapidly. SB 5 X2 Page 6 The report notes that while the long-term health impact resulting from use of this product is presently unknown, it is known that e-cigarettes emit at least 10 chemicals that are found on California's Proposition 65 list of chemicals known to cause cancer, birth defects, or other reproductive harm. The FDA has issued a proposed rule that would extend the agency's tobacco authority to cover additional products that meet the legal definition of a tobacco product, such as e-cigarettes. The agency intends to regulate e-cigarettes and related products in a manner consistent with its mission of protecting the public health. The FDA has not completed its evaluation of e-cigarettes for safety or effectiveness. When the FDA conducted limited laboratory studies of certain samples, they found significant quality issues that indicate that quality control processes used to manufacture these products are substandard or non-existent. They also found that cartridges labeled as containing no nicotine did contain nicotine and that three different e-cigarette cartridges with the same label emitted a markedly different amount of nicotine with each puff. Experts have also raised concerns that the marketing of products such as e-cigarettes can increase nicotine addiction among young people and may lead kids to try other tobacco products. In California, use of e-cigarettes among young adults ages 18 to 29 tripled in one year. A 2015 study funded by the National Institute of Health and published in the Journal of the American Medical Association, compared tobacco use initiation among 222 students who had used e-cigarettes, but not combustible tobacco products, and 2,308 who had neither used e-cigarettes or combustible tobacco products when initially surveyed at the start of ninth grade. During the first six months after being surveyed, 30.7% of those who had used e-cigarettes started using combustible tobacco products, such as cigarettes, cigars, and hookahs, compared to only 8.1% of those who had never used e-cigarettes. SB 5 X2 Page 7 A study published July 27, 2015, in the Journal of Pediatrics surveyed almost 2,100 California high school students, and found that one-quarter had tried e-cigarettes. Ten percent were currently using e-cigarettes, and those current users where much more likely than their peers to also smoke cigarettes. Analysis Prepared by: Lara Flynn / P.H. & D.S. / FN: 0002645