Bill Text: HI SB975 | 2023 | Regular Session | Amended
Bill Title: Relating To Health.
Spectrum: Moderate Partisan Bill (Democrat 6-1)
Status: (Passed) 2023-06-06 - Act 062, 06/06/2023 (Gov. Msg. No. 1162). [SB975 Detail]
Download: Hawaii-2023-SB975-Amended.html
|
THE SENATE |
S.B. NO. |
975 |
|
THIRTY-SECOND LEGISLATURE, 2023 |
S.D. 1 |
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO HEALTH.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Tobacco use is the single most preventable cause of disease, disability, and death in the United States. Tobacco use continues to be a problem in Hawai‘i, causing approximately one thousand four hundred deaths per year among adults. An estimated twenty-one thousand children in Hawai‘i currently under the age of eighteen will ultimately die prematurely from smoking. Tobacco use poses a heavy burden on Hawai‘i's health care system and economy. Each year, smoking costs approximately $526,000,000 in direct health care expenditures and $387,300,000 in lost productivity in the State.
Tobacco products are addictive and inherently dangerous, causing various types of cancer, heart disease, and other serious illnesses. Hawai‘i has a substantial interest in reducing the number of individuals of all ages who use tobacco products, and a particular interest in protecting adolescents from tobacco dependence and illnesses and premature death associated with tobacco use.
Electronic smoking devices, also known as e-cigarettes, are battery-operated products designed to deliver nicotine, flavor, and other chemicals to the user. Electronic smoking devices have quickly evolved since entering the United States marketplace in 2007. Initial products were disposable, resembled the size and shape of conventional cigarettes, and used free-base nicotine; however, the products have evolved to better entice new and younger users. Current products are rechargeable and resemble common objects, such as candy or juice boxes with cartoon charters on them. Products also come in the form of flash drives and highlighters, and typically deliver nicotine salts, which allow higher levels of nicotine to be inhaled more easily by the user.
The electronic smoking device industry, including the production of e-liquid in a variety of forms, has grown rapidly. In its Morbidity and Mortality Weekly Report dated September 18, 2020, the Centers for Disease Control and Prevention (CDC) reported that electronic smoking devices have been the most commonly used tobacco product among United States youths since 2014. The United States Surgeon General first issued a warning in 2016 stating that use of electronic smoking devices among the nation's youth and young adults had become a major public health concern. In 2018, the Surgeon General classified the danger of youth use of electronic smoking devices as an epidemic.
According to a report titled "E-Cigarette Use Among Youth and Young Adults", the United States Surgeon General explained that ninety-five per cent of all smokers start smoking before the age of twenty-one. As there has been an overall decline in the use of combustible cigarettes over the last decade, there has been a dramatic increase in the use of electronic smoking devices by Hawai‘i's youth. The rise in use of electronic smoking devices among Hawai‘i youth is higher than the national average. Between 2011 to 2015, the proportion of youth experimenting with electronic smoking devices increased six-fold among middle school youth and four-fold among high school youth. In 2017, twenty-seven per cent of public middle school students and forty-two per cent of public high school students tried electronic smoking devices. By 2019, thirty-one percent of public middle school students and forty-eight percent of public high school students had used an electronic smoking device. In 2020, eight in ten youth who currently use e-cigarettes reported using a flavored product. These rates are higher than the national average, demonstrate an alarming increase in Hawai‘i youth nicotine use, and serve to illustrate a bleak future of nicotine addiction in the next generation.
Toxicologists have warned that e-liquids pose significant risks to public health, particularly to children. The 2016 Surgeon General's Report further states that if the contents of prefilled cartridges or bottles of e-liquids containing nicotine are ingested, they may cause acute toxicity and possibly death.
According to CDC's Morbidity and Mortality Weekly Report dated September 18, 2020, from November of 2016 to August of 2019, total electronic smoking device unit sales in the United States increased nearly three hundred per cent. Continued monitoring of electronic smoking device sales and use is critical to inform strategies to minimize risk among Hawai‘i's most vulnerable populations, including youth users.
The 2016 Surgeon General's Report found that there are numerous policies and practices that can be implemented at state and local levels to address electronic smoking device use among youth and young adults, including preventing access to electronic smoking devices by youth, increasing taxes imposed upon electronic smoking devices, increasing prices of retail licensure, and regulating electronic smoking device marketing.
Additionally, the rapid growth of the electronic smoking device industry, including retail businesses selling electronic smoking devices or e-liquid, necessitates further regulations to protect consumers, such as requiring retailers of e-liquid to obtain a retail tobacco permit. The 2016 Surgeon General's Report found that children and youth are especially vulnerable to the targeted online social and digital media marketing of inexpensive electronic smoking devices offered in enticing concealable forms and e-liquids in various flavors.
The United States Food and Drug Administration has expanded its regulatory authority to all tobacco products, including electronic smoking devices, cigars, and hookah and pipe tobacco. While there is federal consensus that electronic smoking devices are tobacco products, Hawai‘i has no state tobacco tax imposed on electronic smoking devices and e-liquids. While the use of electronic smoking devices and e-liquids also carry the risk of adverse health consequences, these products are currently taxed at a much lower rate than cigarettes. Decades of research have shown that increasing cigarette prices, such as through the imposition of cigarette taxes, can reduce the rate of smoking by adult and youth smokers. As outlined in the 2016 Surgeon General's Report, current findings show this public health policy can likewise be applied to electronic smoking devices and e-liquids to reduce youth consumption.
Taxing e-liquids and electronic smoking devices as tobacco products will provide pricing parity between products on the market, which will result in consumer clarity and positive health benefits, including encouraging young, price-conscious consumers to quit smoking or sustain cessation, preventing youth initiation, and reducing consumption among those who continue to use them.
The purpose of this Act is to:
(1) Establish the criminal offense of unlawful shipment of tobacco products;
(2) Amend the definition of "tobacco products" as used in the State's cigarette tax and tobacco tax law to include e-liquid and electronic smoking devices, thereby:
(A) Subjecting e-liquids and electronic smoking devices to the excise tax on tobacco products;
(B) Requiring retailers of e-liquids or electronic smoking devices to obtain a retail tobacco permit to sell, possess, keep, acquire, distribute, or transport e-liquids or electronic smoking devices;
(C) Prohibiting persons from engaging in the business of a wholesaler or dealer of e-liquids or electronic smoking devices without first obtaining a license from the department of taxation; and
(D) Applying other requirements of the cigarette tax and tobacco tax law to e-liquids and electronic smoking devices;
(3) Increase the license fee for persons engaged as wholesalers or dealers of cigarettes and tobacco products;
(4) Increase the retail tobacco permit fee for retailers engaged in the retail sale of cigarettes and tobacco products; and
(5) Repeal various statutory provisions relating to electronic smoking devices to avoid conflict with taxation and regulation under the cigarette tax and tobacco tax law.
SECTION 2. Chapter 245, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§245- Unlawful shipment of tobacco products;
penalty; liability for unpaid taxes.
(a) A person or entity commits
the offense of unlawful shipment of tobacco products if the person or entity:
(1) Is engaged in the business of
selling tobacco products; and
(2) Knowingly ships or causes to be
shipped any tobacco products to a person or entity in this State that is not a
licensee under this chapter.
(b) This section shall not apply to the shipment
of tobacco products if any of the following conditions are met:
(1) The tobacco products are exempt from
taxes as provided by section 245-3(b); or
(2) All applicable State taxes on the
tobacco products are paid in accordance with the requirements of this chapter.
(c) Unlawful shipment of tobacco products is a
class C felony if the person or entity knowingly ships or causes to be shipped
tobacco products with a value of $10,000 or more in violation of subsection
(a).
(d) Unlawful shipment of tobacco products is a
misdemeanor if the person or entity knowingly ships or causes to be shipped
tobacco products with a value of less than $10,000 in violation of subsection
(a).
(e) For purposes of this section, a person or
entity is a licensee if the person's or entity's name appears on a list of
authorized licensees published by the department.
(f) Notwithstanding the existence of other
remedies at law, any person or entity that purchases, uses, controls, or
possesses any tobacco products for which the applicable taxes imposed under
title 14 have not been paid, shall be liable for the applicable taxes, plus any
penalty and interest as provided for by law.
(g) For the purpose of this section, "value"
means the retail fair market value at the time of the offense."
SECTION 3. Section 245-1, Hawaii Revised Statutes, is amended as follows:
1. By adding two new definitions to be appropriately inserted and to read:
""Electronic
smoking device" means any device that may be used to deliver any
aerosolized or vaporized substance to the person inhaling from the device,
including but not limited to an electronic-cigarette, electronic-cigar,
electronic-pipe, vape pen, or electronic-hookah. "Electronic smoking device"
includes any component, part, or accessory of the device, and any substance
that may be aerosolized or vaporized by the device, whether or not the
substance contains nicotine. "Electronic
smoking device" does not include drugs, devices, or combination products
authorized for sale by the United States Food and Drug Administration, as those
terms are defined in the Federal Food, Drug, and Cosmetic Act.
"E-liquid"
means any liquid or like substance, which may or may not contain nicotine, that
is designed or intended to be used in an electronic smoking device, whether or
not packaged in a cartridge or other container.
"E-liquid" does not include prescription drugs; cannabis for
medical use governed by chapter 329; manufactured cannabis products governed by
chapter 329D; or medical devices used to aerosolize, inhale, or ingest
prescription drugs, including manufactured cannabis products manufactured or
distributed in accordance with section 329D‑10(a)."
2. By amending the definition of "tobacco products" to read:
""Tobacco
products" means [tobacco in any form,]:
(1) Any product containing, made of, or
derived from tobacco or nicotine, other than cigarettes or little cigars,
that is [prepared or] intended for human
consumption [or for personal use by humans,] or
is likely to be consumed by inhalation, absorption, or any other means of ingestion,
including large cigars and any substitutes thereof other than cigarettes
that bear the semblance thereof, snuff, snus,
chewing or smokeless tobacco, and smoking or pipe tobacco[.];
(2) Any electronic smoking device as
defined in this section and any substance, including e-liquids, that may be
aerosolized or vaporized by the device, whether or not the substance contains
nicotine; or
(3) Any component, part, or accessory of
any item described in paragraph (1) or (2), whether or not any of these
contains tobacco or nicotine, including but not limited to filters, rolling
papers, blunt or hemp wraps, hookahs, and pipes.
"Tobacco products" does not mean drugs, devices, or combination products authorized for sale by the United States Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act."
SECTION 4. Section 245-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The license shall be issued by the department
upon application therefor, in such form and manner as shall be required by rule
of the department, and the payment of a fee of [$2.50,] $250, and
shall be renewable annually on July 1 for the twelve months ending the
succeeding June 30."
SECTION 5. Section 245-2.5, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows:
"(c) The
retail tobacco permit shall be issued by the department upon application by the
retailer in the form and manner prescribed by the department, and the payment
of a fee of [$20.]
$50. Permits shall be valid for one year, from
December 1 to November 30, and renewable annually. Whenever a retail tobacco permit is defaced,
destroyed, or lost, or the permittee relocates the permittee's business, the
department may issue a duplicate retail tobacco permit to the permittee for a
fee of $5 per copy.
(d) A separate retail tobacco permit shall be
obtained for each place of business owned, controlled, or operated by a
retailer. In seeking a retail tobacco permit, the applicant
shall specify whether each place of business sells e-liquid, electronic smoking
devices, or both. A
retailer that owns or controls more than one place of business may submit a
single application for more than one retail tobacco permit. Each retail tobacco permit issued
shall clearly describe the place of business where the operation of the
business is conducted[.] and whether the place
of business sells e-liquid, electronic smoking devices, or both."
SECTION 6. Chapter 28, part XII, Hawaii Revised Statutes, is repealed.
SECTION 7. Section 245-17, Hawaii Revised Statutes, is repealed.
["[§245-17]
Delivery sales. (a) No
person shall conduct a delivery sale or otherwise ship or transport, or cause
to be shipped or transported, any electronic smoking device in connection with
a delivery sale to any person under the age of twenty-one.
(b) A person who makes
delivery sales shall not accept a purchase or order from any person without
first obtaining the full name, birth date, and address of that person and
verifying the purchaser's age by:
(1) An independently operated third-party
database or aggregate of databases that are regularly used by government and
businesses for the purpose of age and identity verification and authentication;
(2) Receiving a copy of a government
issued identification card from the purchaser; or
(3) Requiring age and signature
verification in the shipment process and upon and before actual delivery.
(c) The purchaser shall certify their age before
completing the purchaser's order.
(d) Any person who violates this section shall be
fined $500 for the first offense.
Any subsequent offenses shall subject the person to a fine of no
less than $500 but no more than $2,000. Any person under twenty-one years of
age who violates this section shall be fined $10 for the first offense;
provided that any subsequent offense shall subject the person to a fine of $50,
no part of which shall be suspended, or the person shall be required to perform
no less than forty-eight hours but no more than seventy-two hours of community
service during hours when the person is not employed or attending school.
(e) The department shall not adopt rules
prohibiting delivery sales.
(f) For the purposes of this section:
"Delivery
sale" means any sale of an electronic smoking device to a purchaser in the State where either:
(1) The purchaser submits the order for
sale by means of a telephonic or other method of voice transmission, the mail
or any other delivery service, or the internet or other online service; or
(2) The electronic smoking device is
delivered by use of the mail or any other delivery service.
The
foregoing sales of electronic smoking devices shall constitute a delivery sale
regardless of whether the seller is located within or without the State.
"Electronic
smoking device" means any electronic product that can be used to
aerosolize and deliver nicotine or other substances to the person inhaling from
the device, including but not limited to an electronic cigarette, electronic
cigar, electronic cigarillo, or electronic pipe, and any cartridge or other
component of the device or related product."]
SECTION 8. Section 328J-11.5, Hawaii Revised Statutes, is repealed.
["[§328J-11.5] Statewide
concern. (a) Sales of cigarettes,
tobacco products, and electronic smoking devices are a statewide concern. It is the intent of the legislature to
regulate the sale of cigarettes, tobacco products, and electronic smoking
devices in a uniform and exclusive manner.
(b) All local
ordinances or regulations that regulate the sale of cigarettes, tobacco
products, and electronic smoking devices are preempted, and existing local laws
and regulations conflicting with this chapter are null and void.
(c) Nothing in this
chapter shall be construed to limit a county's authority under section 328J-15."]
SECTION 9. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 10. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 12. This Act shall take effect on December 31, 2050.
Report Title:
Tobacco Products; E-Liquid; Electronic Smoking Devices; Unlawful Shipment; License Fee; Retail Permit Fee
Description:
Establishes the criminal offense of unlawful shipment of tobacco products. Amends the definition of "tobacco products" under the Cigarette Tax and Tobacco Tax Law to include electronic smoking devices and e-liquids. Increases the license fee for persons engaged as wholesalers or dealers of cigarettes and tobacco products and the retail tobacco permit fee for retailers engaged in the retail sale of cigarettes and tobacco products. Repeals state laws that establish and govern the Electronic Smoking Device Retailer Registration Unit within the Department of the Attorney General; provisions of the Cigarette Tax and Tobacco Tax Law that govern delivery sales; and state law governing smoking that preempts and voids local ordinances and regulations conflicting with state law. Effective 12/31/2050. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
