In 2019, your state government relations team tracked 900 state bills! This year, we are expecting even more tobacco bill introductions across the country. As of this week, 35 state legislatures are actively meeting. In our State of the States Update, we will share key issues our team has flagged and provide you with updates on our outreach. If you have questions about your state or want to help make a difference, please contact Rachel Hall, Senior Director of State Affairs, at email@example.com.
Last week, PCA regional lobbyists Tyler Henson and Brett Mecum hosted the second annual pre-legislative session fundraiser for targeted members of the Arizona Senate and House of Representatives. The event was held at PCA member location Ambassador Fine Cigars in Phoenix. PCA members in attendance included Vartan Seferian, owner of Ambassador Fine Cigars, and Mitchell Fox of Fox cigar bar. Following the the event, Tyler traveled around Arizona and met with additional PCA members.
Last week, a bi-partisan group of legislators, including Lieutenant Governor Eleni Kounalakis and 30 lawmakers, announced Senate Bill 793. This flavor ban legislation is the same as S.B. 38, which was pulled by the co-authors in 2019 because they were not pleased with amendments that carved out certain businesses. This broad flavor legislation could conceivably ban ALL tobacco products because of the “characterizing flavor” provision that states, “A tobacco product shall not be determined to have a characterizing flavor solely because of the use of additives or flavorings or the provision of ingredient information.” Additionally, the bill creates “a rebuttable presumption that a tobacco product is a flavored tobacco product if a manufacturer or any of the manufacturer’s agents or employees, in the course of his or her agency or employment, has made a statement or claim directed to consumers or to the public that the tobacco product has or produces a characterizing flavor…”
PCA is monitoring this legislation.
A ballot initiative was filed last week to raise tobacco tax. The total Other Tobacco Products (OTP) tax in Colorado is 40% of the Manufacturer’s List Price (MLP) —the first 20% is statutory; the second 20% was later approved by voters as Amendment 35 to the Colorado Constitution. The new proposal would raise the constitutional portion of the tax from 20% up to 42%, bringing the total OTP tax to 62% MLP earmarked for preschool. PCA is monitoring this ballot initiative.
House Bill 4048 has been introduced to cap Cigar Taxes at $0.50. Other Tobacco Products (OTP) are currently taxed at 36% of the Manufacturer’s List Price (MLP). PCA regional lobbyist Dave Jessup is working with Illinois state association leadership to disseminate an advocacy letter to alert membership and promote the measure in Springfield.
This week, the PCA lobbyist team and two members, Finnie Helmuth and Steve Castro, are meeting with key stakeholders to discuss the impact of proposed flavor ban emergency legislation, House Bill 3, on retailers. This bill could ban all cigars and pipe tobacco sold, due to a problematic provision that states, “a public statement that an other tobacco product has or produces a taste or smell other than tobacco is presumptive evidence that the other tobacco product is a flavored tobacco products.”
In 2019, Senate Bill 58 was introduced to eliminate the sunset on Michigan’s $0.50 cigar tax cap set to expire in late 2021. Grassroots efforts were on-going throughout the year to connect PCA members with legislators. Bi-partisan, bi-cameral cigar caucuses were formed with the encouragement and support of PCA regional lobbyist David Jessup. Recent conversations with Senate leadership and the bill sponsor indicate quick action early this year. The cigar tax cap sunset elimination bill is tentatively scheduled for a vote on in the Senate in February 2020.
Assembly Bill 8808 prohibits the sale and distribution of flavored tobacco products and accessories. The bill defines “characterizing flavor” as “a distinguishable taste or aroma other than the taste or aroma of tobacco, imparted either prior to or during consumption of a tobacco product.” This language is open to broad interpretation and could lead to an outright ban of tobacco products and related accessories given tasting notes, even in cigars that may contain no flavors or additives. PCA regional lobbyist Brett Mecum is working with the state association on a strategy to counter this legislation.
House Bill 54, flavor ban legislation, was pre-filed. This legislation establishes that, “A tobacco product shall not be determined to have a characterizing flavor solely because of the use of additives or flavorings or the provision of ingredient information.” However, the bill also states that a “flavored tobacco product means any tobacco product that contains any ingredient, substance, chemical or compound, other than tobacco, water or reconstituted tobacco sheet that is added by the manufacturer to a tobacco product during the processing, manufacture or packing of a tobacco product, that imparts a characterizing flavor.” PCA notes contradictory provisions in this bill. The first provision drastically increases the scope of products impacted if this were to pass. PCA members have been notified and are ready to mobilize should this bill move.
Several problematic tax and flavor bills have been introduced in Richmond this year.
House Bill 93 and House Bill 1119 are tobacco flavors bans. As currently written, both bills contain extremely broad language that could potentially ban ALL premium cigars and pipe tobacco.
House Bill 1120 contains a drastic tax increase on Other Tobacco Products (OTP) from 10% of the Manufacturer’s Sales Price (MSP) to 39% of the MSP.
The state association is mobilizing to oppose this legislation and are planning to walk the halls later this month.
PCA is proud of the talented team of government relations professionals we have built to serve our members and protect the interests of their small businesses in the states. Tyler Henson (firstname.lastname@example.org), Brett Mecum (email@example.com), David Jessup (firstname.lastname@example.org), and myself are passionate about our industry and are here to serve you. I encourage you to reach out to our team.