The Enid News and Eagle, Enid, OK

Local and State News

April 21, 2013

Fight over e-cigarettes heating up

With more people turning to smoke-free, electronic cigarettes to help quit smoking, a new industry is blossoming across Oklahoma: mom-and-pop stores that sell “vapor” products that use a heating element to convert nicotine into an inhalable water vapor.

But many of these small businesses fear big tobacco companies are trying to cut them out of this growing market and have found themselves engaged in a political fight at the state Capitol.

“I was a mechanic for 15 years, and then I got into this business,” said John Durst, who has opened two stores in the last year — OKC Vapes and Norman Vapes — with his wife. “Now I feel like a politician. I’ve learned more about the political system in the last six weeks than I knew all of my life.”

State Sen. Rob Johnson introduced a bill this session, supported by two of the nation’s largest tobacco companies, that would limit access to e-cigarettes and other vapor products to those over the age of 18 and would limit taxes on those products to 5 cents per unit. Taxes would be capped at one-tenth of the state tax imposed on a pack of cigarettes.

The bill drew dozens of members of the self-described “vapor community” to the halls of the state Capitol to oppose the measure, many of whom had vapor product inhalers dangling from their necks and T-shirts with the names of their shops emblazoned across them. The turnout helped lead to the bill being killed in a House committee on April 9.

But the bill has been resurrected by Johnson, R-Edmond. The latest version, which was adopted last week as an amendment in the Senate on a narrow, 23-22 vote, would define vapor products as “tobacco products” under state law, a move fiercely opposed by the vapor industry.

“We want to be the furthest thing away from being a tobacco product. Just because we’re a nicotine-derived product doesn’t mean we’re a tobacco product,” Durst said. “If I’m defined as a tobacco product, then now I have to go and buy a tobacco retail license, a tobacco wholesale license and a manufacturer’s license, because we manufacture our own liquid.”

The bill that was amended was HB 2097, and was co-authored by State Rep. Mike Jackson, R-Enid. Jackson is not pleased his bill was changed.

“(The amendment) did not originate with me, it was not in my bill,” Jackson said. The bill by Jackson and Sen. Rick Brinkley, R-Owasso, deals with those selling tobacco and makes sure fines for black market tobacco or cigarettes are equal to those for legitimate businesses. The amendment added E-cigarettes or vapor products, he said.

“They were looking for a vehicle to place it in to go to conference,” Jackson said. The title to Jackson’s bill was struck and the amendment placed in it, then sent back to the House. Jackson said he would reject the Senate amendment, and the issue will be determined in conference. Jackson said R.J. Reynolds and Lorillard are in favor and Altria, the other large tobacco company, is against it.

State Sen. Patrick Anderson, R-Enid, said he voted against it, and because it passed by only one vote, he predicted it will not make it out of conference.

“I’m sure the language won’t make it through the conference committee. Otherwise, Jackson’s bill is a pretty good bill,” Anderson said.

State Rep. John Enns, R-Enid, said the U.S. Food and Drug Administration is preparing a definition stating what cigarettes and tobacco products are. He believes two of the largest tobacco companies are trying to preempt the FDA. He voted against the tobacco bill in the House and hoped it was dead.

“It was defeated in committee overwhelmingly. Now, they’re apparently trying to put it in something else,” Enns said.

Defining e-cigarettes as tobacco products also would shift how they are taxed — from a sales tax to an excise tax.

The final version of the bill is expected to be hammered out in a conference committee, and Durst and other members of the Oklahoma Vapors Advocacy League, or OVAL, have retained their own high-powered lobbyist to help fight Johnson’s effort. The vapor industry doesn’t oppose the youth-access language, but is mostly concerned by the attempt to define the products and change how they’re taxed.

But Johnson, who is the top recipient of tobacco-lobbyist money in Oklahoma, according to tobaccomoney.com, said the classification of vapor products as tobacco products is expected by the U.S. Food and Drug Administration and he’s trying to get a favorable tax structure put in place before that happens.

“The federal government is going to call these tobacco products. I’m not real good on waiting to see what the federal government is going to do and dictating to our state what we have to do,” Johnson said. “What I don’t want is for them to rule these as tobacco products, and then the Tax Commission has the ability to unilaterally tax them at a higher rate. I think we should be proactive and define what they should be taxed at, and then tax them lower, because they aren’t as harmful as other tobacco products.”

Courts already have held that e-cigarettes can be regulated as tobacco products, and FDA spokeswoman Jenny Haliski confirmed the federal agency is in the process of publishing a proposed rule that could bring other types of tobacco products under its regulatory authority.

“FDA intends to propose a regulation that would extend the agency’s ‘tobacco product’ authorities — which currently only apply to cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco — to other categories of tobacco products that meet the statutory definition of ‘tobacco product,’” Haliski said in an email to The Associated Press. “Further research is needed to assess the potential public health benefits and risks of electronic cigarettes and other novel tobacco products.

AP Writer Sean Murphy and Staff Writer Robert Barron contributed to this story.

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