November 27, 2014

House advances bill to restrict e-cigarettes to adults

The state House has given initial approval to restricting the sales of electronic cigarettes to anyone under the age of 18. The bill (HB 1690) would add alternative nicotine products to the list of those restricted for those under 18. It also defines those products and prevents them from being taxed or regulated as tobacco products.

Representative Caleb Rowden (courtesy; Tim Bommel, Missouri House Communications)

Representative Caleb Rowden (courtesy; Tim Bommel, Missouri House Communications)

The sponsor, Representative Caleb Rowden (R-Columbia) says the language was written with the goal of being acceptable to both Republicans and Democrats.

“As the industry evolves and as we begin to know more if we get to the point where we say, ‘Okay, we need to tax these at the same rate, at the same level that we’re taxing tobacco products, then that’s something that we could very well do in future years,” says Rowden, “but for simplicity and for making sure that we could get this across the finish line and make sure that at the end of the day that folks 18 and under do not have access to these products, to make sure that was something we could get done, that’s part of the reason we decided to go this route.”

Representative Jill Schupp (D-Creve Coeur) says the legislation shuts the door to regulation.

“Why we would want to start now by saying we will have no regulations around this as it relates to tobacco products makes no sense to me,” says Schupp. If our goal here today is truly to stop young people from accessing these E-cigarettes as we learn more about what their effects will be, we can do that without this [language] in the bill.”

With another favorable vote the legislation would go to the Senate.

‘Little tobacco’ squares off vs. Attorney General’s office, ‘big’ counterparts in hearing

Those pushing for and against passage of a law that would make small tobacco companies pay more into an escrow account have made their cases to the House Budget Committee.

The escrow account was created for tobacco companies not participating in the Tobacco Master Settlement to pay into, and they would get their money back after 25 years. How much they paid into it was based on their sales compared to the national tobacco market.

Due to what Representative Chris Kelly (D-Columbia) calls a “very complex formula,” those companies were able to take back out most of the money paid into escrow.

The bill, HB 1242 would change that formula. It is sponsored by House Budget Committee Chairman Rick Stream (R-Kirkwood).

Andy Arnold, a lobbyist for U-Gas, Inc., tells the committee the legislation would cause small tobacco companies’ per-carton fees to the State of Missouri to increase from 14-cents to $6, while the fees paid by big tobacco companies would remain 14-cents per carton.

Kelly is a co-sponsor. He notes that the lack of money in that escrow fund is part of what a 3-judge panel cited as Missouri’s poor past enforcement of tobacco laws that has caused it to lose $70-million of its $120-million tobacco settlement payment that comes next month.

“Much of which or all of which we would not have lost had we passed this legislation,” says Kelly. “Tobacco companies settled with other states whose position was similar to ours for 43-cents on the dollar.”

Lobbyist Chuck Hatfield representing Cheyenne Cigarettes says the arbitration panel that made the decision to pull part of Missouri’s 2014 payment for poor enforcement in 2003 said that Missouri is not required to pass such legislation as part of tobacco law enforcement. He says there were eight factors that played into the decision, that would be important in future arbitrations.

Hatfield says one of those reasons is that Missouri came in last in its collection rate in 2003.

“24 percent collection rate on cigarettes,” says Hatfield. “Dead last because the Attorney General’s Office did not file lawsuits and because they did not properly communicate with the Department of Revenue.”

Another of the opponents of the bill is the Missouri Petroleum Marketers & Convenience Stores Association.

“One of the things that you need to understand,” its lobbyist Ron Leone tells the committee, “Six states lost arbitration. Five of them passed the law that’s in front of you today.”

Leone and representatives of small tobacco companies argue that the formula was intentionally designed to have companies not participating in the Master Tobacco Settlement pay less than big tobacco companies, and the bill is an effort by big tobacco companies to undo that.

Steve Carroll, representing tobacco company Excalibur, tells lawmakers, “You’ve got some corporations coming before you … that committed perjury before Congress, lied to Congress, ended up in a settlement, and are paying damages for that tort that they committed. As I view it they’re trying to shift those damages and that tort to my client, which has done nothing wrong, has always abided by the law, we’ve always been in compliance with state law. We weren’t even in existence at the time (of the settlement).”

The General Counsel for the Attorney General’s Office, Joan Gummels, dismisses the argument that the 1999 law was intended to be drafted the way it was passed. She asked lawmakers to consider two points on that matter.

“One is just the irrationality of having someone deposit a large amount of money only to refund them 97 percent of it,” says Gummels. “The second, and I think really compelling point on this is why have 45 of the 46 states that signed the agreement closed this loophole?”

No vote has been taken on the legislation.  Next week is the legislative spring break and the House will take up the budget when it returns the week after.  Stream says he wants lawmakers to have time to process what they heard in the hearing and says another hearing might be held before a vote is held on the bill.

House proposal would take tobacco out of prisons (AUDIO)

Legislation that would ban smoking in the state’s corrections system has led to some interesting discussion in the House Corrections Committee.

Representative Chris Molendorp

Current state law restricts smoking at correctional facilities to designated areas outside. Representative Chris Molendorp’s (R-Belton) proposal would ban use of tobacco products at correctional facilities beginning July 1, 2013. He says that allows time to engage public health foundations who offer smoking cessation programs.

Molendorp says the budget for medical services for Missouri’s inmate population has jumped by $15 million in the last two fiscal years to a proposed $149 million in the Governor’s fiscal year 2013 budget. How many of those medical needs can be connected to smoking is unclear. Another proposed $376 million would go to health care for correctional officers. Molendorp says all of that approximately $525 million dollars in inmate and employee healthcare comes from general revenue.

Molendorp says 26 other states have come up with plans that have worked. “(They) have an intake process that informs the inmate under our care, custody and control that it will be a tobacco-free environment. Florida went to it. Their penal system is much larger than ours. Cass County does it.”

He says he knows the issue is emotional and controversial. “But at some point, we need to acknowledge that this is a public policy that shouldn’t just be changed for the sake of change but it is a true financial management issue. We have failed to control costs in an area where we can’t identify a factor that will begin to blunt that cost explosion.”

Lobbyist for the Department of Corrections Andy Briscoe told the Committee cigarette sales in prisons generates $5.7 million annually. “Those funds are kept within the Department of Corrections and used to fund various educational programs, spiritual programs and recreational programs at our facilities.”

The Corrections Officers Association testified against the bill. Lobbyist Harry Hill says the idea would make tobacco products a “black market” item. “There will be cigarettes in (the prisons), and then it become a much more precious commodity. There will be more fights, more disruption, more instances where corrections officers are put in peril because they have to break up fights or spend a lot of time searching for the cigarettes.”

University of Missouri School of Medicine researcher Stan Cowen supports the bill and says there is little evidence supporting the argument that stopping smoking will make cigarettes a valuable “black market” item. “When surveyed in 2007, 51 of the U.S. Departments of Corrections reported no violence or riots associated with the transition to stricter tobacco policy.”

Representative Kathie Conway (R-St. Charles) told Molendorp his proposal raises another idea. “Should we maybe extend the non smoking rule to everyone who takes any form of state aid? Because people on Medicaid … we don’t tell them they can’t smoke but yet we are paying for their health care just the same.”

AUDIO: Listen to the Corrections Committee discussion of HB 1136.

Utility officials discuss cap-and-trade study, express concerns over possible rate hikes

Missouri’s utility officials are watching the federal climate-change legislation. The Waxman-Markey bill is could be taken up by Congress this week … key legislators are still working with agriculture officials on controversial measures in the bill the ag industry says would unfairly penalize rural areas.

The study, by the Missouri Public Utility Alliance, says cap-and-trade for carbon emissions could increase the electric rate in Missouri by 10 percent in 2015 … and raise it by as much as 80 percent in 20 years.

Robert Clayton, chairman of the Public Service Commission, says Missouri would be one of the states harder hit by the legislation, since a lot of our state’s energy comes from coal. However, Clayton says legislators continue to rework the language of the bill, and a lot depends on the final version of the bill.

And, he says, the PSC wants to be proactive rather than reactive in lowering carbon emissions. Clayton says the federal stimulus funding has provided numerous grants and programs, such as for weatherization in low-income homes, and he says Missourians need to take advantage of what’s are available. The PSC is working with the Department of Natural Resources on some of those programs, he says.

“That’s the message we’re trying to get out to consumers,” he says. “You need to take advantage of programs out there to take control of your energy and cut down on how much energy you use because ultimately that will help you save money.”

Energy program information is on the commission’s Web site at psc.mo.gov.

And he says the PSC wants to be a resource for legislators looking at the bill, and provide useful analysis and research.

Missouri should continue to look at nuclear power.

Legislators are still working with the Agriculture industry, which says rural areas would be hardest hit by the increases. Clayton says a lot depends on the final language of the bill, which could be taken up by the end of this week.

Missouri should continue to look at nuclear energy, he says, despite the failure of a bill this session that would let Ameren UE charge rate payers while the plant is under construction.

“Nuclear is expensive to build but then is efficient and may be an appropriate source to look at in future cap-and-trade rules,” he tells the Missourinet.

Echoing the main concern of this week’s forum looking at the study, Clayton says, “Any legislation that restricts carbon emissions is going to affect a state that relies on coal energy. We’ve benefitted from the low cost over the years and I hope our congressional legislation is mindful of actions they can include,” such as rebates for residential or commercial interests that would be majorly impacted. “I think they have that in mind.”

KC Council Bans Smoking in Restaurants

Kansas City is banning smoking in most restaurants in sixty days. The ban, approved by the Kansas City Council, also bans smoking at the Truman Sports Complex, where the Royals and the Chiefs play.

The Council has decided not to put the issue before voters in April.

This ban does not include smoking in bars. Voters will have a no-smoking proposal before them, though. A citizen petition campaign would ban smoking from all restaurants and bars.