SIGMA Opposes Menthol Ban in Pallone Tobacco Bill, Legislation Advances to Full Committee
On November 13th, in advance of a House Energy and Commerce Health Subcommittee markup of H.R. 2339, legislation that aims to limit underage use of tobacco products by raising the national purchasing age to 21, SIGMA sent a letter to the full House Energy and Commerce Committee opposing a provision in the bill that would ban menthol cigarettes. The “Reversing Youth Tobacco Epidemic Act of 2019,” which was introduced by House Energy and Commerce Chairman Frank Pallone (D-NJ), also would ban all Internet tobacco sales by limiting all tobacco sales to face-to-face transactions and require the Food and Drug Administration (FDA) to issue a final rule requiring graphic health warnings on cigarette packaging and advertising by March 15, 2020. The bill was subsequently passed by the Subcommittee by a voice vote and will now be considered by the full Committee.
In its letter to the Committee, SIGMA said it supports legislative efforts to limit underage use of tobacco products, but the menthol ban in H.R. 2339 will not accomplish that goal. Because there is a broad consumer base for menthol cigarettes, banning menthol cigarettes will not stop their use. “Instead, menthol cigarette users will look for alternative sources of the product,” such as the black market and overseas sellers, SIGMA said. In closing, the letter urged the House Energy and Commerce Committee to drop the menthol ban from the bill, stating, “Before Congress bans menthol cigarettes, FDA must prove that it can protect against an illicit market for the products.”
SIGMA’s position received support during the markup by full Committee Ranking Member Greg Walden (R-OR) who said, “Smoking is harmful and we should do what we can to prevent use by children, but I think eliminating consumer choice for law-abiding adults is unnecessary and will lead to unintended consequences.” Representative G.K. Butterfield (D-NC) also opposed the menthol ban, saying the focus should be on stopping smoking, not banning flavors. “A ban on menthol will not lead to smoking cessation, period,” he said.
It is anticipated that the bill will be favorably reported by the full Committee. It would then be considered by the full House—if room can be found on the legislative calendar before the end of the year. Even if the bill is passed by the House, it is likely it would stall in the Republican-controlled Senate.
Biofuel Producers Lose First Challenge to EPA RFS Small Refinery Waivers
On November 12th, the U.S. Court of Appeals for the District of Columbia ruled against a legal challenge to EPA’s methodology for granting Renewable Fuel Standard (RFS) small refinery waivers because there was not an identified final agency action at the time the challenge was filed. EPA has since issued a memorandum that lays out its new approach to the waivers. The court determined that memorandum does qualify as a final agency action, making it subject to legal challenge—and other parties have already initiated a challenge to the waivers.
The suit, brought by the Advanced Biofuels Association, requested a review of EPA’s decision to modify the criteria for exempting small refineries from RFS standards based on “disproportionate economic hardship.” The association alleged that there was an increase in the number of small refinery waivers granted by the agency beginning in 2016 but the agency had refused to provide any information regarding which refineries received waivers or its rationale for granting them. EPA’s subsequent 2019 memorandum explained that it previously considered disproportionate economic hardship to exist only when both disproportionate impacts and viability impairment were experienced, the agency changed that approach and now requires a small refinery to meet only one of those criteria in order to be eligible for a waiver.
Following the ruling, the association said the decision “establishes a clearer legal pathway for EPA’s change in methodology to once again be challenged in the D.C. Circuit, which several parties have already filed.”
SIGMA Joins Industry Letter on Extenders
This week, SIGMA joined an industry letter to House and Senate Leadership and the Chairmen of the Senate Finance and House Ways and Means Committees asking Congress to pass and send to President Trump this year legislation that includes a retroactive extension of so-called tax “extenders” at least through 2020. In addition to SIGMA, the letter was signed by organizations representing a diverse group of businesses, including advanced energy, transportation, real estate, and agricultural sectors.
In the letter, the groups state that “Uncertainty regarding the status of these worthwhile incentives has created confusion for the numerous industry sectors that utilize these tax incentives and has threatened thousands of jobs in the U.S. economy.” “The continued uncertainty regarding eventual congressional action on tax extenders is undermining the effectiveness of these incentives and stands as a needless barrier to job creation and economic growth,” the groups said.
Senate HELP Committee Holds Vaping Illness and E-Cig Hearing
On November 13th, the Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing on the recent lung illnesses caused by vaping and the use of e-cigarettes by youth. Topics of discussion included the recent statement by President Trump that his Administration will ban all flavored e-cigarettes, including mint and menthol, across all retail channels; the increase in youth use of vape and e-cigarette products; and the use of e-cigarettes by adults as smoking cessation products.
Witnesses included Mitch Zeller, Director of the Center for Tobacco Products at the Food and Drug Administration (FDA), and Anne Schuchat, M.D., Principal Deputy Director at the Centers for Disease Control and Prevention (CDC).
Committee Chairman Lamar Alexander (R-TN) expressed frustration that FDA has not reviewed nor approved a single vaping product or e-cigarette for sale, yet one in four high school students has used e-cigarettes. Chairman Alexander chastised FDA for having no rules in effect to regulate manufacturing of e-cigarettes and urged the agency to make such rules and make them final. “This is an unacceptable situation that demands our attention,” Chairman Alexander said. Committee Ranking Member Patty Murray (D-WA) concurred, stating that the Trump Administration “has hit the snooze button” in regulating these products and the delay has resulted in a “Wild West” of vaping products. Senator Murray said several actions should be undertaken to combat the current upsurge in youth tobacco use including: raising the purchase age of vaping products to 21; banning flavored e-cigarette products that have not undergone FDA review from the market (including mint and menthol); increasing funding for public health programs; and pushing Dr. Stephen Hahn, the recently nominated FDA Commissioner, to address these issues if he is confirmed.
Of interest to SIGMA members, Ranking Member Murray said she was shocked that in a hearing focused on the youth vaping epidemic Mr. Zeller made no mention in his testimony of the Trump Administration’s September 11th announcement that it intended to “clear the market” of all unauthorized non-tobacco flavored vaping products and pushed him on why he avoided the topic. Mr. Zeller referred all questions regarding its anticipated guidance on the sale of flavored products to the White House stating, “it remains a deliberative process on policy” and refused to commit to a deadline by which the guidance would be issued. Later, under questioning by Senator Tim Kaine (D-VA), Mr. Zeller said there is not a final answer “as of now” on whether the Administration’s announced intent regarding flavored products remains the same as it was announced September 11th.
Dr. Schuchat commented that CDC has observed that if mint and menthol are not also included in a flavor ban, youth are likely to switch to another product rather than quit using vaping products and said she concurred that raising the age to 21 to purchase tobacco products would have a positive effect.
Senator Richard Burr (R-NC) asked several questions regarding FDA inspections of vape shops and traditional retail facilities and noted that FDA’s investment in inspections has decreased, as has the number of inspections it has conducted. Mr. Zeller responded that FDA has increased its public education campaign on e-cigarettes. Senator Burr further stated that it is important that adults’ choice to use such products be protected.
House Ways and Means Democrats Plan Green Energy Tax Bill
Democratic members of the House Ways and Means Committee, led by Committee Chairman Richard Neal (D-MA), are in the process of finalizing a comprehensive “green energy” tax bill that reportedly will include tax credits for electric vehicles (EVs), wind, solar, and other renewable energy sources. The legislation would fulfill a promise from Chairman Neal made in June when he vowed to introduce a broad energy tax bill before the end of the year.
Representative Dan Kildee (D-MI) said he expects the legislation to include his bill to increase the current 200,000 vehicle per manufacturer cap on EV sales to 600,000 and reduce the amount of the credit from $7,500 to $7,000, as well as provisions to extend the renewable production credit and investment tax credits, which are scheduled to phase down. The bill comes as House and Senate talks continue over reinstating expired tax credits, including the biodiesel blenders’ credit. Chairman Neal said he was open to including the expired extenders in his bill, stating, “I do think there’s an opportunity here to end up combining some elements,” but noted that he also wanted “something freestanding to discuss.”
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