Legislation was introduced that would reflect the federal government's move raising the legal age for smoking to 21 and create a state regulatory framework for the taxing, licensing sale and advertising of vaping products.
The bills come after the U.S. Food and Drug Administration finalized rules last month banning nearly all flavored cartridges for e-cigarettes, including fruit and mint flavors. The legal age for smoking was also increased from 18 to 21 in a separate congressional move.
Senate Minority Leader Jim Ananich (D-Flint), one of the bill sponsors, said the bills bring clarity to state statute on who can use tobacco products, the tax rate and requirements for selling products, including those for vaping. He said recent moves on the federal level have created confusion among the public and there needs to be a reasonable regulatory regime to outline the changes.
Mr. Ananich's bill (SB 781) would set an excise tax rate for electronic smoking devices within the Tobacco Products Tax Act and add definitions on what is considered such a device. A definition for "consumable material" would be added meaning liquid nicotine solutions used in electronic smoking devices.
The excise tax rate for consumable materials would be set at 24 percent of the wholesale price effective January 1, 2021.
"We set a pretty good framework in place," Mr. Ananich said of the package. "If these bills are passed which hopefully, they will be … here's how you legally purchase, sell and consume."
Mr. Ananich said the proposals in the package are a mix of concepts being considered in other states and those that have been worked on in conversations with various stakeholders.
He pointed to the move in September 2019 by Governor Gretchen Whitmer to issue emergency rules to ban nearly all flavors of e-cigarettes. The Court of Appeals is expected to review an appeal of a lower court's ruling striking down the emergency rules on an expedited basis.
"This I think is the next logical step," Mr. Ananich said. "How do we make sure we regulate a product and in a way that doesn't price it out of the market and at the same time, you know, make sure there's a structure in place to raise some money."
He said an important priority was making sure the tax and licensing structure was fair and done in a way that does not lead people to go to the black market for product.
Mr. Ananich plans on talking to Senate Majority Leader Mike Shirkey (R-Clarklake) about the package soon, adding he has spoken to various industry officials and the governor's office.
Promising "a rigorous debate," Mr. Ananich did note some changes are likely. He hopes the package can move quickly so clarity will be provided to the public on the issue.
Several other changes are proposed in the other bills in the package: SB 782, SB 783, SB 784, SB 785 and SB 786.
Republicans Sen. Jim Runestad of White Lake and Sen. Lana Theis of Brighton introduced bills in the package prohibiting marketing vaping products to minors and age verification for vaping products, respectively.
Individuals selling vaping products would have to be licensed through the Department of Licensing and Regulatory Affairs beginning June 1 of this year under SB 782, with a licensing fee of $25. Licenses would need to be renewed before December 31 of each year and would be valid for one year under the bill.
Under SB 783, those selling vaping products would be prohibited from advertising with the intent of encouraging minors to use the product. It outlines several prohibitions on advertising methods for flavored vaping products that could appeal to minors such as references to certain flavors, graphics or cartoon characters, among others.
Sellers of vaping products would be guilty of a misdemeanor under the bill with maximum penalties of $500 for a first offense, $1,000 for a second offense and $2,500 for a third or subsequent offense.
The same misdemeanor penalties for a first, second and third or subsequent offense for selling or providing a vaping product to a minor would be applicable under SB 784. The bill also outlines the methods by which those selling vaping products must verify the identification of the individual attempting to make a purchase.
Changes are made to the age requirement in penal code to age 21 for the sale or distribution of tobacco products by mail or vending machines under SB 785.
The Age of Majority Act is amended under SB 786 to reflect the increased age for the purchase of tobacco product