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Hass Works On Tobacco License Deal as Senate Bans E-Cigs for Minors

The e-cigarette legislation puts the devices in the Clean Indoor Air Act, without anything but a temporary exception for testing the products in vape stores. That conflicts with a bargain being worked out between Sen. Hass and Sen. Boquist to license and regulate retail tobacco and e-cigarettes through the Department of Revenue.
May 13, 2015

The Senate voted overwhelmingly if belatedly Monday to ban e-cigarettes for minors and include them alongside most tobacco smoking in the Oregon Clean Indoor Air Act, but the passage of House Bill 2546 is unlikely to be the last word on tobacco control this session or the indoor air act.

Sen. Mark Hass, D-Beaverton, told The Lund Report after the vote that two bills that were sidelined out of the Senate Health Committee remain alive in the Senate Finance Committee, which he chairs -- Senate Bill 663, requiring a retail license to sell tobacco or e-cigarettes, and Senate Bill 415, which bans flavored tobacco, including candy flavorings that appear designed for teenagers.

Hass said the licensure law in particular has legs, and he was working behind the scenes to get SB 663 out of his committee and onto the Senate floor with bipartisan support. “We’ve been trying to get some consensus on the licensure, and I think we’re gonna do it,” Hass said. “We’re one of only eight states that don’t have any kind of licensing [for retail tobacco.]”

Tobacco and nicotine regulation is fraught with complications, and HB 2546 has cleared the Senate only after efforts by previous sessions fell apart, leaving Oregon one of the last states that allows middle-schoolers to buy e-cigarettes. There has also been no state law against using the devices in public buildings and workplaces, although some local governments, such as Multnomah and Benton counties, have included them in their indoor clean air ordinances.

HB 2546 passed the House in March, although in a slightly different version. Rep. Mitch Greenlick, D-Portland, has indicated to the House Clerk’s Office that he plans to support the Senate version on Thursday rather than call for a conference committee.

SB 415 faces a higher hurdle than SB 663, and Hass said a ban on flavored pipe tobacco or premium cigars couldn’t get out of his committee.

The proponents of SB 663, including Sen. Elizabeth Steiner Hayward, D-Portland, believe that the poor tobacco regulation in Oregon when compared to alcohol has created an environment where it’s much easier for kids to get cigarettes than beer. Clerks can be prosecuted, but business owners face no penalty for selling to minors. In undercover inspections, minors working for the Oregon Health Authority were able to illegally purchase tobacco 16 percent of the time in 2013 and 21 percent of the time in 2014.

Indoor Air Act Conflict

As SB 663 left the Senate Health Committee, it included an olive branch that Steiner Hayward extended to the vape shops, giving them a sampling exemption from the Clean Indoor Air Act so long as they barred minors and did not sell any tobacco or alcohol. Seating may also be limited.

The vape shop owners have argued that sampling is an essential part of their business, since customers must be able to test flavors and nicotine levels if they’re going to use their products to help them quit regular cigarettes, which Steiner Hayward dubbed “a laudable goal.”

She seemed to go back on that agreement with HB 2546, which passed with an indoor-use exemption just through the end of the year. She also voiced the mainstream opinion on Monday that the products have no proven effectiveness as a tobacco cessation device. Studies on the devices have been mixed, but several studies have indeed found them to help reduce or quit smoking, including a recent independent study from Belgium.

The sampling prohibition could simply be a cudgel used to force the vape shops, which have fought her attempts to regulate their businesses, to continue to negotiate on SB 663 if they want to get their exemption.

Sen. Brian Boquist of McMinnville led seven of his fellow Republicans to vote against HB 2546 because of the conflict between the two bills. He said he was unsure how the legal conflict will be remedied and the rules in SB 663 allowing for limited sampling of e-cigarette products may be a key part of the bargain to license vape shops along with tobacco stores.

Boquist told The Lund Report that tobacco retailers may drop the fight to be licensed if they could head off county-by-county licensing, which would befall them at least in Multnomah County, if not other Democratic counties, such as Benton County. Boquist worried that Multnomah County might have the ability to ban tobacco sales outright.

The Republican senator said he wanted the state to streamline its tobacco inspections and sting operations so the state wasn’t duplicating its efforts.

There are at least three inspection programs going on in the state currently, and Senate Health’s final version of SB 663 added a fourth sting operation by the Oregon Liquor Control Commission. Boquist called giving OLCC authority over tobacco a non-starter, and he wanted the licensure, or registration, to take place at the Oregon Department of Revenue, which he said already has a well-run, efficient system for business registrations and carries out inspections to ensure that retailers are selling cigarettes with the proper tax stamps.

“That’s the system that needs to be utilized,” Boquist said.

The Addictions and Mental Health Division would continue to conduct inspections, but it would be encouraged to take over an inspection program currently run by the U.S. Food and Drug Administration -- as well as the federal funds that pay for it. Boquist and Richard Kosesan, the lobbyist for the convenience stores, have noted that the FDA’s minor sales rate is only 3 to 6 percent, but in an email to Boquist shared with The Lund Report, the health authority’s Sarah Lochner noted that the FDA’s inspections include bars, taverns and smoke shops -- while the state inspections do not.

Bars and taverns are strictly monitored by the OLCC for alcohol, and people under 21 are often not even allowed on the premises. Minors are also not allowed in smoke shops.

A separate sting operation conducted by the Oregon State Police found that minors were able to purchase cigarettes 26 percent of the time in 2012, 15 percent in 2013 and 22 percent in 2014. Unlike the health authority’s program, clerks who sold cigarettes to the teenagers working with the police did get fined, resulting in about 700 tickets in the past three years.

Tobacco Tax Dead

The House Revenue Committee has three bills in its quiver to raise the tobacco tax, including House Bill 2555 from Rep. Greenlick that would raise the tax a $1 a pack to play catch-up with Washington, but Hass said that Senate President Peter Courtney, D-Salem, would not allow a cigarette tax increase to be a part of any negotiation because of a tiny increase that was passed in 2013.

At the time, Courtney secured Republican support for a 13¢-a-pack increase, followed by penny-ante tax increases the following two years, most of which provided a small dedicated fund for community mental health services.

“He feels honor-bound to stay within that,” Hass said.

Courtney has another reason to fight back attempts by more progressive politicians to increase tobacco taxes or push too far to rein in the tobacco industry: he has received more campaign money from Big Tobacco than any other Oregon legislator in recent years, raking in roughly $10,000 each of the past two years, which helped him in his narrow re-election bid last year.

Any statewide tax increase would still need at least one Republican vote to pass, in addition to Courtney’s blessing. But a provision to allow counties and municipalities to enact their own taxes, as they are allowed in other states, would need only Democratic support. That policy cleared the House in 2013 only to die in the Senate.