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U.S. House Narrowly Passes Flavored Tobacco Ban Bill

The following is an update from the National Association of Tobacco Outlets (NATO) sourced through their February 28th online bulletin. Reposted with permission.

House Votes 213-195 to Pass H.R. 2339

This afternoon, the full U.S. House of Representatives voted on House Bill H.R. 2339 and passed the bill with 213 “ayes” and 195 “nays.”  As previously reported, H.R. 2339 would prohibit the sale of menthol cigarettes, flavored smokeless tobacco, flavored cigars, flavored pipe tobacco, flavored electronic nicotine products, and flavored nicotine disposable products.  A list of how each U.S. Representative voted can be accessed by clicking on the link below:

Link:  http://clerk.house.gov/evs/2020/roll078.xml

The legislation now moves to the U.S. Senate for consideration.  NATO will be calling on all NATO members to contact their U.S. Senator to oppose HR 2339.  Please watch for future alerts in the NATO News Bulletin.

The White House Office of Management and Budget (OMB) has issued a statement explaining why the Trump Administration opposes H.R. 2339.  A copy of the OMB statement of opposition is reproduced below:

EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

February 27, 2020

Statement of Administration Policy, H.R. 2339

The Administration opposes H.R. 2339. The Administration is encouraged by legislative efforts to protect American youth from the harms of addiction and unsafe tobacco products, and it also acknowledges that H.R. 2339 exempts premium cigars, which have comparatively lower youth usage rates, from certain regulatory burdens. Unfortunately, however, this bill contains provisions that are unsupported by the available evidence regarding harm reduction and American tobacco use habits and another provision that raises constitutional concerns. Accordingly, the Administration cannot support H.R. 2339 in its current form.

The Administration cannot support H.R. 2339’s counterproductive efforts to restrict access to products that may provide a less harmful alternative to millions of adults who smoke combustible cigarettes. This includes the bill’s prohibition of menthol e-liquids, which available evidence indicates are used relatively rarely by youth. It also includes the bill’s approach to remote retail sales. At this time, problems surrounding such sales should be addressed through the application of age verification technologies rather than, as this bill would do, prohibiting such sales entirely.

The Administration is also concerned about the constitutionality of a provision in the bill that prohibits certain advertising practices with respect to electronic nicotine delivery system (ENDS) products. The bill would prohibit marketing and advertising that “appeals to an individual under 21 years of age.” This standard may not satisfy the stringent vagueness test applied to regulations of speech under the Constitution’s Due Process Clause.

The Administration is committed to protecting the Nation’s youth from the harms of tobacco and has already taken several steps to do so. This includes signing legislation to raise the minimum age of sale for tobacco products to 21. In January 2020, moreover, the Administration issued guidance to prioritize enforcement against the unauthorized marketing of certain ENDS products to youth. And the Food and Drug Administration (FDA) is conducting regular surveillance of—and, when appropriate, taking enforcement measures against—websites, social media, and other publications that advertise regulated tobacco products.

The bill takes the wrong approach to tobacco regulation. Rather than continuing to focus on the FDA’s Center for Tobacco Products, Congress should implement President Trump’s Budget proposal to create a new, more directly accountable agency within the Department of Health and Human Services to focus on tobacco regulation. This new agency would be led by a Senate-confirmed Director and would have greater capacity to respond to the growing complexity of tobacco products and respond effectively to tobacco-related public health concerns.

If presented to the President in its current form, the President’s senior advisors would recommend that he veto the bill.

FDA Revises Retail Fines for Violation of Tobacco Regulations

The U.S. Food and Drug Administration has updated its regulations to reflect the required annual inflation-related increases to civil money penalties (CMPs), or fines, that can be assessed against retailers that violate federal tobacco regulations.  The adjusted CMP fine amounts apply to retail penalties assessed on or after January 17, 2020 for violations that occurred on or after November. 2, 201 (the 2015 date is not a typo).  Below is a list of the new fine amounts:

Number of Retail Tobacco Regulation Violations   Penalty
1 Warning Letter
2 within a 12-month period $ 297
3 within a 24-month period $ 594
4 within a 24-month period $ 2,381
5 within a 36-month period $ 5,952
6 within a 36-month period $ 11,904

State Legislative Bill Introductions 

State tobacco-related legislative bills that have been introduced in the past week are listed below alphabetically by state:

California:  Assembly Bill 2913 requires the Attorney General to maintain a list of tobacco products that are unflavored (except the flavor of tobacco).  Assembly Bill 3227 clarifies acceptable forms of identification for purchase of tobacco products.

Connecticut:  Senate Bill 244 prohibits any health care facility or pharmacy from selling cigarettes, tobacco products, ENDS and vapor products.

Iowa:  House Bill 2588, increases the minimum sales age for tobacco and vapor products to 21 years of age.

Minnesota: House File 3713 modifies the tobacco products excise tax; amends the definition of “tobacco products” to include electronic delivery devices, defines “electronic delivery device”, and imposes the tobacco products excise tax on electronic delivery devices.  House File 3717 provides for out-of-state retailer registration application and reporting requirements, and modifies tobacco product delivery sales requirements, and modifies the definition of electronic delivery device. Senate File 3540 would appropriate cigarette excise tax monies for tobacco prevention and cessation.

Mississippi: House Bill 1407 imposes an excise tax on vapor products of 15% of the manufacturer’s list price, the same as the OTP tax rate, and increases the purchase age for tobacco and vapor products from 18 to 21 years of age.

Missouri: House Bill 2614 imposes an excise tax on vapor products at a rate of 10% of the manufacturer’s invoice price, increases the purchase age for tobacco and vapor products from 18 to 21 years of age and would prohibit the sale of flavored tobacco and vapor products.

New Jersey:  Assembly Bill 3289 prohibits the sale of tobacco products and electronic smoking devices at pharmacies.

Rhode Island:  House Bill 7789 creates a 7% minimum mark up on cigarettes at retail; increases retailer cost of cartage to 2% and the cost of doing business to 8%; increases wholesaler cost of cartage to 2% and the cost of doing business to 4%.  House Bill 7841 regulates the manufacture, distribution and retail sale of vapor products; sets forth labeling, marketing and record keeping requirements for manufacturers, distributors and retailers of vapor products.

Utah:  House Bill 375 prohibits the manufacture, distribution, sale, possession or use of any electronic cigarette, (exempting 21 and older military members and their spouses). House Joint Resolution 20 encourages local boards of health to limit the number of tobacco retail permits they issue.  Senate Bill 199 enacts a tax of $0.61 per milliliter on electronic cigarette substances and restricts delivery sales of electronic cigarette substances.

State Legislative Bill Actions

State tobacco-related legislative bills that have been acted on by a state legislative committee or state legislature are listed below alphabetically by state:

Arizona:  House Bill 2826, which raises the minimum legal sales age to 21 and provides penalties for businesses selling to underage patrons, passed House on February 26, 2020.  House Bill 2853, which raises the minimum legal sales age to 21 and provides penalties for businesses selling to underage patrons, passed House Commerce Committee on February 18, 2020.  Senate Bill 1400, which raises the minimum legal sales age for tobacco products to 21, requires retailers to verify age of purchasers who are under 30, creates a state tobacco retail licensing program and authorizes local jurisdictions to license and further regulate tobacco products, failed in Senate Commerce on February 20, 2020.

The following bills died by rule on February 21, 2020:  House Bills 2083 and 2173 and Senate Bill 1391, which would have added the use of e-cigarettes to the state law prohibiting smoking in public places;  House Bill 2636, which would have raised the minimum legal sales age for tobacco products to 21, required retailers to verify age of purchasers who are under 30, created a state tobacco retail licensing program and authorized local jurisdictions to license and further regulate tobacco products;  House Bill 2637 and Senate Bill 1401, which would have expanded the restriction on delivery sales to all tobacco products (including electronic cigarettes, cigars and pipe tobacco; House Bill 2877, which would have raised the minimum legal sales age for tobacco to 21. created a regulatory process for tobacco retailers under the Department of Liquor Licenses and Control and preempts local jurisdictions from regulating the sale of tobacco products;  House Concurrent Resolution 2034, which would have referred to the voters the question of whether to impose a new tax on vapor products of 43% of the wholesale cost to fund higher education scholarships; Senate Bill 1063, which would have prohibited billboards advertising tobacco products within 1000 feet of schools or public parks and authorized local jurisdictions to adopt more stringent billboard restrictions;  Senate Bill 1501, which would have raised the minimum legal sales age for tobacco products to 21, required retailers to verify age of purchasers who are under 30, created a state tobacco retail licensing program, authorized local jurisdictions to license and further regulate tobacco products and prohibited billboards advertising tobacco within 1000 feet of schools; and Senate Bill 1527, which would have raised the minimum legal sales age for tobacco to 21, created a regulatory process for tobacco retailers under the Department of Liquor Licenses and Control and preempted local jurisdictions from regulating tobacco products.

Colorado:  House Bill 1319, which prohibits the sale of all flavored nicotine products, will be considered in the House Health and Insurance Committee on March 4, 2020.

Florida:  House Bill 7089, which requires vapor product retailers to obtain a license through the state, was reported favorably from Committee on February 27, 2020.

Hawaii:  House Bill 2457, which, effective July 1, 2050, bans the sale of flavored tobacco products, passed House Finance Committee on February 25, 2020. Senate Bill 2227, which, effective September 1, 2020, includes vapor products in the definition of tobacco products in order to impose the existing 70% of wholesale price tobacco excise tax on them and increases the cost of the annual retail tobacco permit from $20 to $50, passed Senate Committees on Judiciary and Ways and Means with an amendment on February 26, 2020. Senate Bill 2228, which, as amended, prohibits the sale of flavored electronic cigarette products and includes vapor products in the definition of tobacco products in order to impose the existing 70% of wholesale price tobacco excise tax on them, passed Senate Committee on Judiciary with an amendment on February 25, 2020. Senate Bill 2301, which, as amended, effective July 1, 2021, imposes a “cigarette litter excise tax” of an unspecified amount per cigarette, passed Senate Committee on Ways and Means with an amendment on February 25, 2020. Senate Bill 2538, which bans the sale of flavored tobacco products and increases fines for the purchase or possession of tobacco products and electronic smoking devices, passed Senate Committee on Judiciary on February 25, 2020.  A number of bills died by failing to meet a procedural deadline on February 14, 2020: House Bill 1666, which would have extended the area from 1000 feet to 1500 feet of any school where it is prohibited to distribute sample tobacco products, promotional materials, and coupons redeemable for tobacco products; House Bill 1718 and Senate Bill 2173, which would have authorized counties to regulate tobacco products; House Bill 2346 and Senate Bill 23-2, which would have included vapor products in the definition of tobacco products in order to impose the existing 70% of wholesale price tobacco excise tax on them and increased the cost of the annual retail tobacco permit from $20 to $50; House Bill 2456, which would have included vapor products in the definition of tobacco products in order to impose the existing 70% of wholesale price tobacco excise tax on them and prohibited delivery of vapor products to unlicensed persons; House Bill 2507, which would have increased the minimum legal sales age and minimum age for purchase or possession of tobacco products to 25; and House Bill 2540, which would have increased taxes on cigarettes by an unspecified amount.

Idaho: House Bill 498, which requires all retailers selling electronic smoking devices to be licensed by the state and prohibits the possession and use of vapor products by minors, was re-referred to the House Health and Welfare Committee on February 25, 2020. Senate Bill 1308, which increases the legal purchase age for tobacco products and vapor products from 18 to 21 years of age, failed to pass the Senate on February 27, 2020.

Illinois:  Senate Bill 2751, which prohibits the sale of any cigarette utilizing a single use filter containing cellulose acetate, any other plastic material, or any non-biodegradable material, was postponed in the Senate Public Health Committee on February 25, 2020.

Indiana:  Senate Bill 1, which prohibits a person under age 21 from buying or possessing tobacco products or electronic cigarettes; and increases civil penalties for underage sales, was amended and passed the House Public Health Committee on February 26, 2020.  House Bill 1006, which prohibits the sale of vapor products to minors; increases penalties for tobacco product sales to minors; prohibits a tobacco retailer from being located within 1,000 ft. of a school (current retailers grandfathered), was amended and passed the Senate Health and Provider Services Committee on February 26, 2020.

Iowa:  House Bill 2588, which increases the minimum sales age for tobacco and vapor products to 21, passed House Committee on State Government February 27, 2020.

Kentucky:  House Bill 32, which doubles taxes on snuff and chewing tobacco and increases other tobacco products (includes vapor products) tax to 25% of the distributor sales price—includes a floor tax, passed the House on February 26, 2020.

Michigan: Senate Bill 781, which imposes a new tax on liquid nicotine solution at the rate of 24% of the wholesale price, was considered in the Senate Regulatory Reform Committee on February 25, 2020.

Minnesota: House File 3032, which prohibits the sale or furnishing of flavored products; modifies​ administrative penalties for selling or furnishing certain devices or products; and ​ provides for alternative civil penalties for certain persons under age 21 who sell​ or distribute flavored products, was considered in the House Health and Human Services Policy Committee on February 26, 2020 and will be carried over to an additional hearing on February 28, 2020. Senate File 463, which increases the legal age to purchase tobacco products and vapor products from 18 to 21 years of age, passed the Senate Judiciary Committee on February 26, 2020.

Mississippi: Senate Bill 2799, which levies a tax on alternative nicotine products of $.05 per milliliter, was referred to Finance Committee on February 27, 2020.

Nebraska: Legislative Bill 840, which includes the use of electronic cigarettes in the Nebraska Clean Indoor Air Act, was amended on the Legislative Floor on February 26, 2020.

South Dakota:  House Bill 1063, which raises the age to purchase tobacco products to twenty-one years of age, passed the Senate and sent to Governor on February 20, 2020.

Tennessee:  House Bill 2651, which taxes liquid nicotine at three cents per milligram, failed in the House Public Health Subcommittee on February 25, 2020.

Utah:  House Bill 23, which. as amended, requires retail tobacco specialty businesses to electronically verify proof of age for anyone entering the premises and prohibit those under 21 and unaccompanied by a parent or guardian from entering those businesses unless they are there for a purpose other than to purchase a tobacco product, passed House Business and Labor Committee with an amendment on February 25, 2020.   House Bill 118, which, as amended, amends the regulation of retail tobacco specialty businesses by including in that regulation businesses that sell flavored electronic cigarette products; requires tobacco retailers, for each sale of tobacco products, to provide to the customer, and keep a record of, the name of the product sold, the amount charged, and the time and date of the sale; removes the state preemption of local ordinances regarding tobacco sales and the sales of flavored electronic cigarettes; and prohibits certain discounts and giveaways of tobacco products, passed House on February 25, 2020.  Senate Bill 37, which, as amended, increases the minimum legal sales age to 21, taxes electronic cigarettes and related products at 56% of the manufacturers sales price effective July 1, 2020 and alternative nicotine devices at the rate of $1.83 per ounce (effective July 1, 2021), reduces taxes by 25% or 50% for those tobacco products determined by the FDA to be modified risk products (the amount of the reduction depending on the method by which the product qualifies as modified risk), passed Senate Health and Human Services Committee with an amendment on February 26, 2020.

Virginia: House Bill 785, which authorizes any County to impose additional excise taxes on cigarettes, passed both Houses, and House refused to concur on Senate amendments on February 27, 2020.

Wisconsin: Assembly Bill 422 and Senate Bill 364, which increase the age to purchase tobacco products to 21 years of age, passed the Assembly and moved to the Senate on February 20, 2020.

Wyoming: House Bill 73, which imposes a tax on vapor products at the rate of 15% of the wholesale purchase price, passed the House on February 24, 2020 and was considered in the Senate Revenue Committee on February 27, 2020. Senate Bill 50, which increases the legal age to purchase, possess, and use nicotine products to 21 years of age, passed the Senate on February 24, 2020.

Federal Legislative Bill Actions

Tobacco-related legislative bills that have been acted on by Congress are listed below:

House Bill 2339:   Today, the U.S. House voted 213-195 to pass H.R. 2339, a full flavor ban bill.  The legislation now moves to the U.S. Senate for consideration.