BILL ANALYSIS Ó
SB 438
Page 1
Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
SB
438 (Hill) - As Amended June 29, 2015
SENATE VOTE: Not Relevant
SUBJECT: Electronic cigarettes.
SUMMARY: Requires all cartridges for electronic cigarettes and
solutions for filling and refilling an electronic cigarette to
be in child-resistant packaging. Specifically, this bill:
1. Requires all cartridges for electronic cigarettes and
solutions for filling and refilling an electronic cigarette
to be in child-resistant packaging, as defined.
2. Defines "child-resistant packaging" as packaging that is
consistent with federal standards adopted by the federal
Consumer Product Safety Commission (Part 1700 of Title 16
of the Code of Federal Regulations).
EXISTING LAW:
1) Authorizes the California Department of Public Health
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(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
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STAKE Act violations.
7) Prohibits, under the Stop Tobacco Access to Kids
Enforcement Act (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 Prevent All Cigarette Trafficking Act
(PACT Act), the shipment of tobacco products through the
USPS.
FISCAL EFFECT: Unknown
COMMENTS:
Purpose of the Bill : According to the author, SB 438 will
protect California's youth from e-cigarette liquid poisoning by
requiring that all e-cigarette liquids be equipped with
child-resistant packaging.
What are E-Cigarettes? : Electronic cigarettes are
battery-operated inhalers that consist 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, which the user can then inhale. Electronic cigarettes
are often made to look like cigarettes, cigars, pipes and
sometimes like everyday items such as pens and USB memory
sticks.
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According to the World Health Organization (WHO), electronic
nicotine delivery systems (ENDS), of which electronic cigarettes
are the most common prototype, are devices that do not burn or
use tobacco leaves but instead vaporize. The main components of
the solution, in addition to nicotine-when nicotine is
present-are propylene glycol, with or without glycerol and
flavoring agents. ENDS solutions and emissions contain other
chemicals, some of them considered to be toxicants. There are
more than 450 brands and more than 7,500 flavors on the market,
according to the policy report. There has been an average of 10
new brands entering the market every month for the last two
years, a recent Internet survey found.
Electronic cigarettes have been sold in the USA since 2007. The
biggest markets are Europe and North America. Sales are banned
in 13 of the 59 countries that regulate the devices, the WHO
reported, but most of those 13 countries say they are still
available because of illicit trade and cross-border Internet
sales.
According to the Food and Drug Administration (FDA),
e-cigarettes have not been fully studied, so consumers currently
do not know: 1) the potential risks of e-cigarettes when used as
intended, 2) how much nicotine or other potentially harmful
chemicals are being inhaled during use, or 3) whether there are
any benefits associated with using these products. However,
they do suggest they are safer than some traditional tobacco
products. Mitch Zeller, Director of the Center for Tobacco
Products, FDA, in an NPR interview on January 20, 2014, stated:
"If a current smoker completely substituted all of the
combusting cigarettes that they smoked with an electronic
cigarette, that person would probably be significantly reducing
their risk."
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Electronic cigarette safety : The California State Health Officer
released a report in January 2015, "A Community Health Threat,"
about e-cigarettes that cites, among other things, the concern
about the health risks of the product, the growing number of
e-cigarettes poisonings. E-cigarette poisonings increased from
seven in 2012 to 154 in 2014. By the end of 2014, e-cigarette
poisonings to young children tripled in one year, making up more
than 60 percent of all e-cigarette-poisoning calls, according to
the report. Furthermore, according to an investigative report by
FOX-KTVU, the number of calls to Poison Control for nicotine
poisoning from e-cigarette liquid is on the rise, more than
doubling in just the last year. California Poison Control
reports that most of those cases involve young children
ingesting the potentially deadly liquid.
The state health officer also noted that in California, use of
electronic cigarettes 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 electronic cigarette users had
never smoked traditional cigarettes. However, it must be note,
as reported by the Department of Public Health (DPH); California
has one of the lowest teenage smoking rates in the nation.
Through implementation of the STAKE Act, California also has
seen a steady decline in illegal sales to minors.
A July 2014 report by the WHO, "Electronic nicotine delivery
systems (ENDS)," 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. The
aerosol inhaled by smokers contains ultra-fine particulate
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matter that gets trapped in the small airways of the lungs.
According to a 2013 study by The National Center for
Biotechnology Information (NCBI) entitled "Does electronic
cigarette consumption cause passive vaping?," aerosol exhaled by
electronic cigarettes smokers 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.
According to research paper published in "Tobacco Control" (an
international peer review journal covering the nature and
consequences of tobacco use worldwide) on March 2013, titled:
"Levels of selected carcinogens and toxicants in vapour from
electronic cigarettes," e-cigarette toxicant levels were 9-450
times lower than in cigarette smoke and were, in many cases,
comparable with trace amounts found in the reference product.
The paper goes on to conclude: "that substituting tobacco
cigarettes with e-cigarettes may substantially reduce exposure
to selected tobacco-specific toxicants. E-cigarettes as a harm
reduction strategy among smokers unwilling to quit, warrants
further study".
Federal Action : Federal law, the Family Smoking Prevention and
Tobacco Control Act of 2009 (Tobacco Control Act), provides the
FDA authority to regulate cigarettes, cigarette tobacco,
roll-your-own tobacco, smokeless tobacco, and any other tobacco
products that the FDA by regulation deems to be subject to the
law. To date, the FDA has not officially acted on the subject
of e-cigarette regulation. However, according to the Federal
Register in print Friday, April 25, 2014, the FDA is considering
proposed rules regarding, in part, deeming e-cigarettes as a
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"tobacco product." Once a product is deemed a "tobacco
product", the FDA may put in place restrictions on the sale and
distribution of said product, including age-related access
restrictions and advertising and promotion restrictions, if FDA
determines the restrictions are appropriate for the protection
of the public health.
The proposed rules have two purposes: (1) To deem products that
meet the definition of ''tobacco product'' under the law except
accessories of a proposed deemed tobacco product and subject
them to the tobacco control authorities in the Tobacco Control
Act; and (2) to apply specific provisions that are appropriate
for the protection of the public health to deemed tobacco
products. These provisions include: (1) Enforcement action
against products determined to be adulterated and misbranded;
(2) required submission of ingredient listing and reporting of
harmful and potentially harmful constituents (HPHCs) for all
tobacco products; (3) required registration and product listing
for all tobacco products; (4) prohibition against use of
modified risk descriptors (e.g., ''light,'' ''low,'' and
''mild'' descriptors) and claims unless FDA issues an order
permitting their use; (5) prohibition on the distribution of
free samples (same as for cigarettes); and (6) premarket review
requirements. The FDA has closed public comment and is
reviewing evidence prior to finalizing the proposed rules,
specifically on the health risks and the viability of
e-cigarettes as a cessation product.
Should the legislature decide to wait for the FDA to finalize
its regulations, specifically regarding deeming e-cigarettes as
"tobacco products", the current definition of e-cigarettes
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(Health and Safety Code Section 119405) may be used to
effectively regulate the product at the state level.
STAKE Act : The Stop Tobacco Access to Kids Enforcement (STAKE)
Program of the Food and Drug Branch strives to be a leader in
youth tobacco enforcement in California. The mission of the
program is to reduce the illegal sales of tobacco to minors
through effective enforcement of the STAKE Act. Through
implementation of the STAKE Act, California has seen a steady
decline in illegal sales to minors. According to DPH,
California has one of the lowest teenage smoking rates in the
nation. The effective enforcement and protection provisions in
the STAKE Act that apply to traditional tobacco products
include:
1. Establishes an enforcement program for illegal sales to
minors (B&P Section 22952).
2. Requires all persons engaging in the retail sale of
tobacco products shall check the identification of tobacco
purchasers (B&P Section 22956)
3. Civil and licensure penalties for any person or retailer
that sells, gives, or in any way furnishes to another
person who is under the age of 18 years a tobacco product
(B&P Section 22958)
4. Prohibits tobacco products on any outdoor billboard
located within 1,000 feet of any public or private
elementary school, junior high school, or high school, or
public playground (B&P Section 22961).
5. Prohibits tobacco products from being sold through a
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"self-service display" (B&P Section 22962)
The committee and author may wish to apply all relevant
provisions in the STAKE Act to e-cigarettes using the current
definition in Section 119405 of the Health and Safety Code.
BOE Licensing Act : In 2003, AB 71 (J. Horton, Chapter 890)
enacted the Cigarette and Tobacco Products Licensing Act
(Licensing Act), which established a statewide licensure program
administered by BOE to help stem the tide of untaxed
distributions and illegal sales of cigarettes and tobacco
products. Prior to the bill, BOE's Investigations Division had
been encountering a large number of cigarettes and tobacco
product distributors who were unlicensed. The purpose for being
unlicensed is to conceal the nature of their business and to
evade the tax. These unlicensed distributors normally maintain
minimal assets and are typically transient, which hinders BOE's
ability to collect the taxes due and payable.
The Act requires every retailer, distributor, wholesaler,
manufacturer and importer to obtain and maintain a license to
engage in the sale of cigarettes or tobacco products.
Currently, BOE has approximately 38,000 retailers and 1,000
distributors and wholesalers licensed to engage in the sale of
cigarettes and tobacco products in California. A distributor
and wholesaler license is valid for a calendar year upon payment
of a fee of $1,000 per location, unless surrendered, suspended,
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or revoked prior to the end of the calendar year, and may be
renewed each year upon payment of such fee.
Violations of the Licensing Act include, in part, the following:
1) Possession, storing, owning, or has made sales of an
unstamped package of cigarettes bearing a counterfeit California
tax stamp or tobacco products on which tax is due but has not
been paid; 2) Sales of cigarettes or tobacco products to any
distributor, wholesaler, importer, retailer, or any other person
who is not licensed or whose license has been suspended or
revoked; 3) Retailer and wholesaler purchases of cigarette or
tobacco products from any person who is not licensed or whose
license has been suspended or revoked; 4) Distributor purchases
of cigarettes or tobacco products from any person who is
required to be licensed pursuant to the Licensing Act but who is
not licensed or whose license has been suspended or revoked; 5)
Failure to maintain records or make such records available to
BOE and law enforcement agency, as specified; 6) A person or
entity that engages in the business of selling cigarettes or
tobacco products in this state without a license or after a
license has been suspended or revoked; and 7) Failure to allow
an inspection.
According to the American Lung Association, 94 cities and
counties now require a retailer to obtain a license to sell
e-cigarettes. Majority of the cities and counties have done this
through special language in the definition of tobacco product in
their local tobacco retailer licensing ordinance.
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The committee and author may wish to apply all the provisions of
the Licensing Act to e-cigarettes using the current definition
in Section 119405 of the Health and Safety Code.
Smoke Free Laws : Current law 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.
According to the American Lung Association, 131 cities and
counties in California prohibit the use of e-cigarettes in some
outdoor areas (dining areas, entryways, public events,
recreation areas, service areas, sidewalks, and worksites),
some indoor areas (hallways, city owned/ operated facility,
hotels/motels, multi-unit housing, public transit, places of
employment, restaurants, and theaters/ convention centers), or
both. These 131 municipalities represent a diverse population
of local governments-ranging from San Francisco to San
Bernardino-that have taken action on where e-cigarettes may be
used. The ordinances differ in each city/county. For example,
the City of San Francisco prohibits the use of e-cigarettes in
public events, recreation areas, service areas, multi-unit
housing, public transit, places of employment, restaurants, and
theaters/convention centers, while San Bernardino County
prohibits service areas, city owned/ operated facility,
hotels/motels, public transit, and places of employment.
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The committee and author may wish to apply all the "Smoke Free"
locations that apply to traditional cigarettes to e-cigarettes
using the current definition in Section 119405 of the Health and
Safety Code.
Mail Delivery : Prevent All Cigarette Trafficking Act (PACT Act)
is a federal law, amongst other things, that prohibits the
delivery of cigarettes and smokeless tobacco through the United
States Postal Service (USPS). This prohibition does not apply
to other forms of shipment, such as FedEx and UPS.
Some concerns have been raised by the opposition that SB 140, by
defining e-cigarettes as a "tobacco product," will place
e-cigarettes under the provisions of the PACT Act, specifically
the USPS prohibition. Opposition cites this as potentially
damaging to the industry, since a large portion of their sells
are done online and delivered to the consumer.
According to an informal opinion by Legislative Counsel, SB 140
would not be subject to the provision in question under the PACT
Act. The provision states: "All cigarettes and smokeless
tobacco are non-mailable and shall not be deposited in or
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carried through the mails. The United States Postal Service
shall not accept for delivery or transmit through the mails any
package that it knows or has reasonable cause to believe
contains any cigarettes or smokeless tobacco made non-mailable
by this paragraph." The language clearly states that only
"cigarettes and smokeless tobacco" are prohibited from being
delivered by USPS. The PACT Act would have to be amended at the
federal level to include e-cigarettes for this provision to
apply.
California law, under the STAKE Act, requires a specified
distributor or seller to verify that a purchaser of tobacco
products is 18 years of age or older, and to telephone the
purchaser after 5 p.m. to confirm the order prior to shipping
the tobacco products. This provision in state law currently does
not apply to e-cigarettes.
A study by the Journal of the American Medical Association found
that more than 96% of minors aged 15 to 16 were able to find an
Internet cigarette vendor and place an order in less than 25
minutes, with most completing the order in seven minutes. As of
2012, more than 23% of all high school students had used some
kind of tobacco product in the past month and the use of
e-cigarettes has more than doubled among high school students.
The committee and author may wish to amend the bill to require
age verification upon mail delivery of e-cigarettes using the
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current definition in Section 119405 of the Health and Safety
Code..
Vending Machines : The STAKE Act prohibits a cigarette or tobacco
product from being sold, offered for sale, or distributed from a
vending machine or appliance, or any other coin or token
operated mechanical device designed or used for vending
purposes, unless the machine or appliance is located at least 15
feet away from the entrance of a premise that has been issued an
on-sale public premises license to sell alcoholic beverages, as
specified.
According to the National Youth Tobacco Survey, in 2012, 1.78
million middle and high school students nationwide had tried
e-cigarettes. Although it is unknown how many students get
e-cigarettes from vending machines, it is reasonable to assume
that restricting e-cigarette access through this type point of
sale could significantly lower the amount of minors who use
e-cigarettes.
The committee and author may wish to amend the bill to prohibit
e-cigarettes from being sold, offered for sale, or distributed
from a vending machine using the current definition in Section
119405 of the Health and Safety Code.
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Policy Considerations : In its current form, SB 438 would
provide a much needed advancement in public health and child
safety by requiring child safe packaging for e-cigarette
cartridges. While this a very important provision, the
committee may wish to add in more protections for consumers,
public health and preventing youth access to e-cigarettes. As
stated above, these protections can be added into law by using
the current definition of e-cigarettes (Section 119405 of the
Health and Safety Code). This will allow the legislature to
advance important laws on a widely unregulated e-cigarette
industry while waiting for the FDA to finalize its federal
regulations.
The committee and author may wish to amend the bill by adding in
the provisions below using the current definition of
e-cigarettes in Section 119405 of the Health and Safety Code:
1. Apply all the provisions in the STAKE Act to
e-cigarettes (See comments, "STAKE Act" #'s 1-5).
2. Apply all the provisions of the Cigarette and Tobacco
Products Licensing Act to e-cigarettes.
3. Apply all the "Smoke Free" locations that apply to
traditional cigarettes to e-cigarettes
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4. Require age verification upon mail delivery of
e-cigarettes (AB 1500 Dickinson of 2014)
5. Prohibit e-cigarettes from being sold, offered for sale,
or distributed from a vending machine (SB 648 Corbett of
2013)
Related legislation : SB 151 (Hernández) of 2015. Increases the
minimum legal age to purchase or consume tobacco from 18 to 21
and makes additional conforming changes to restrictions and
enforcement mechanisms in current law. (Pending in Assembly
G.O. Committee)
AB 216 (Garcia) of 2015. Prohibits the sale of any device
intended to deliver a non-nicotine product in a vapor state, to
be directly inhaled by the user, to a person under 18 years of
age. (Pending in Senate Appropriations)
SB 24 (Hill) of 2015. Extends STAKE 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; and requires all retailers
of e-cigs to apply for licensure to sell e-cigs, as specified.
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(Failed passage on the Senate Floor and is pending
reconsideration)
SB 140 (Leno) of 2015. 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; and, extends current licensing requirements for
manufacturers, importers, distributors, wholesalers, and
retailers of tobacco products to electronic cigarettes.
(Assembly G.O. Committee - Held in committee without
recommendation)
SB 438 (Hill) of 2015. Requires all cartridges for electronic
cigarettes and solutions for filling and refilling an electronic
cigarette to be in child-resistant packaging. (Pending in
Assembly G.O. Committee)
SB 591 (Pan) of 2015. Imposes an additional excise tax of $2.00
per package of 20 cigarettes. This bill also (1) imposes an
equivalent one-time "floor stock tax" on the cigarettes held or
stored by dealers and wholesalers, and (2) indirectly increases
the tobacco products tax. (Ordered to inactive file on Senate
Floor)
Prior legislation : AB 1500 (Dickinson) of 2014. Would have
prohibited a delivery seller, as defined, from selling or
delivering an electronic cigarette to a person under 18 years of
age. (Failed passage in the Assembly Appropriations Committee)
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SB 648 (Corbett) of 2013. Would have restricted electronic
cigarettes from being sold in vending machines. (Failed passage
in the Assembly Appropriations Committee)
SB 568 (Steinberg) Chapter 336, Statues of 2013. Prohibits an
operator of an Internet Web site, online service, online
application, or mobile application, as specified, from marketing
or advertising electronic cigarettes to a minor.
SB 882 (Corbett), Chapter 312, Statutes of 2010. Made it
unlawful, to the extent not preempted by federal law, for a
person to sell or otherwise furnish an electronic cigarette to a
person less than 18 years of age.
SJR8 (Corbett) of 2009. Would have requested that the US Food
and Drug Administration prohibit sale of electronic cigarettes
until they are deemed safe. (Failed passage in the Assembly)
REGISTERED SUPPORT / OPPOSITION:
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Support
None on file
Opposition
None on file
Analysis Prepared by:Kenton Stanhope / G.O. / (916)
319-2531