HB4541, introduced in the West Virginia House of Delegates, would prohibit tobacco products that have added flavoring including cigarettes, cigars, smokeless tobacco, Hookah tobacco, little cigars and dissolvable tobacco products. Menthol and mint flavors are not included in the definition of “flavored tobacco products.”

This bill is anticipated to taken up by the House Health and Human Resources at 4pm on Monday, February 20th.

Flavored tobacco products entice youth to experiment with (and ultimately become addicted to) tobacco.  The US Food and Drug Administration has already banned flavored cigarettes and this proposed bill would expand that ban to all other tobacco products.

The bill has been referred to the Health and Human Resources Committee and then to the Judiciary Committee.

Legislation has been introduced in the West Virginia State Senate to increase West Virginia’s excise tax on tobacco with a portion of the proceeds directed to tobacco control and other health-related programs.

SB-586 was introduced by Senators Roman Prezioso, Dan Foster and Ron Stollings.

This bill calls for increasing West Virginia’s excise tax on cigarettes by $1.00 to $1.55 per pack and the tax on other tobacco products from the current level of 7% of the wholesale price to 50% of the wholesale price. The proposed legislation would also direct one-half of the tobacco tax revenues, up to $60 million, into a new fund to be known as the “West Virginia Healthy Future Fund”. $27 million from the Fund would be transferred annually for tobacco prevention and eduction programs and the balance of the Fund each year would directed to public health, substance abuse or healthcare-related programs. Revenues beyond what is placed in the Fund would go to General Revenue.

According to the Campaign for Tobacco Free Kids this legislation, if enacted, would generate $152 million in total revenue and would result in a 15% reduction in youth smoking and 17,300 current adult tobacco users quitting. In addition, West Virginia would see a long-term health savings of $667.81 million from these declines.

The bill has been referred to the Senate Committee on Health and Human Resources and then to the Senate Committee on Finance.

The proliferation of cheap “roll-your-own” cigarettes, which seek to evade higher taxes on regular cigarettes, poses both a serious public health problem that encourages more smoking and a serious budgetary problem that is costing West Virginia and the Federal Government much-needed revenue. Because “roll-your-own” (RYO) cigarettes are currently so cheap and under-taxed, they are attractive to price-sensitive kids and encourage smokers to switch rather than quit when faced with higher cigarette costs. The result is more smoking, and more smoking-related death, disease and health care costs.

“Roll your own” is a bit of a misnomer as it relates to HB4428 which targets retail establishments in the State who have installed commercial rolling machines on site and utilize these devices to avoid paying higher state and federal tobacco excise tax. The scheme works like this - customers purchase loose tobacco and paper “tubes” with filters and they are run through the rolling machine. In a few minutes close to 200 cigarettes are produced which are sold at nearly half of the cost of traditional cigarette brands. The largest part of this savings is the result of only paying taxes on the loose tobacco which has a much lower tax rate than cigarettes.

As a result, West Virginia’s 55 cent per pack ($5.50 per carton) is avoided by paying the “other tobacco tax” on the loose tobacco which is only 7% of the wholesale price of the tobacco (about 80 cents per carton). The West Virginia Department of Revenue recognized this problem as early as September 2010 when the issued Administrative Notice 10-26 which stated “Use by a consumer of a machine that manufactures cigarettes and is located at a retail dealer’s place of business is considered to be the illegal manufacturing and sale of unstamped cigarettes.”

The Administrative Notice went further to state this practice “…is a ruse and an illegal attempt to evade the cigarette tax.”

In addition to state tax avoidance even bigger saving comes from the avoidance of higher federal cigarette taxes. Congress in 2009 sharply raised the federal excise tax on tobacco to help finance the expansion of a children’s health-insurance program. Before the federal tax increases, the tax rates for RYO tobacco and pipe tobacco were the same. Since then, federally taxed RYO tobacco sales have declined by more than 60 percent while the much lower-taxed “pipe tobacco” sales have increased by more than 230 percent.

Because of the disparity in the tax rates between rolling tobacco and pipe tobacco many companies simply relabeled their products as pipe tobacco to avoid the higher tax rate. RYO tobacco shops have exploited this further by placing the industrial rolling machines in retail establishments that roll cigarettes from “pipe tobacco”.

“The Wall Street Journal found, store employees or customers insert into the machines tobacco labeled “pipe tobacco.” This substantially reduces the stores’ and smokers’ costs because the federal excise tax on pipe tobacco is $2.83 a pound—compared with $24.78 a pound for the rolling tobacco traditionally used to make hand-rolled cigarettes.” Roll Your Own Cigarette Machines Help Evade Steep Tax - Wall Street Journal  08/30/2010

The tax federal tax differential between the sale of a carton of cigarettes taxed as cigarettes ($10.07) and the equivalent 200 cigarettes rolled from tobacco taxed as “pipe tobacco” ($1.77) is $8.30.

As originally introduced, HB4428, would have defined these retail establishments with commercial rolling machines as “manufacturers” and required them to come into compliance with West Virginia statutes regarding cigarette excise taxes, “Fire Safe” cigarettes and with laws concerning the Tobacco Master Settlement Agreement. This bill was being promoted heavily by the tobacco industry as a “fix” to this problem.

However, the “fix” had problems of its own. While it did address some of the problems regarding these establishments, primarily the collection of state cigarette taxes, HD4428 would have legalized this practice which the State Tax Department had already ruled is illegal and is currently involved in litigation on. Retailers who chose to come into compliance with the state statute would be allowed to continue to operate and continue to exploit loopholes in Federal tobacco tax rates. The result would be the availability of cheap cigarettes in West Virginia.

The Coalition for a Tobacco Free West Virginia (CTFWV) took their concerns on this HB4428 to the House Health and Human Resources Committee last week and urged lawmakers to consider amending the bill to ban commercial rolling machines in retail establishments. The amendment suggested by CTFWV was based on legislation already in place in Arkansas.

In April 2011, as part of Arkansas Attorney General Dustin McDaniel’s legislative package to prevent tobacco tax avoidance and Master Settlement Agreement compliance, the Arkansas Legislature approved Act 836 of 2011 which, among other things, banned commercial rolling machines in retails establishments. Attorney General McDaniel is co-chairman of the Tobacco Committee of the National Association of Attorneys General. As Tobacco Committee co-chairman, McDaniel oversees compliance of about $6 billion in annual payments to the states related to the Master Settlement Agreement with tobacco companies.

On Monday, February 13th, the House Health and Human Resources Committee took action HB 4428 and amended the bill to ban commercial rolling machines in retail establishments. After passing the amendment the Committee passed the bill and referred it on to its next legislative stop, the House Finance Committee.

Advocates wishing to help eliminate the proliferation of these “Roll Your Own” tobacco and prevent access to cheap cigarettes in West Virginia should contact members of the House Finance Committee and urge their SUPPORT of HB4428 AS AMENDED BY THE HEALTH AND HUMAN RESOURCES COMMITTEE to ban these machines from retail settings. The Committee could take this bill up at any time so please contact members as soon as possible.

Members of the house Finance Committee are:

Delegate White - Chair -(304) 340-3230
Delegate Campbell, T. - Vice-Chair - (304) 340-3280
Delegate Anderson - Minority Chair - (304) 340-3168
Delegate Carmichael - Minority Vice-Chair - (304) 340-3115
Delegate Cann - (304) 627-3020
Delegate Guthrie - (304) 340-3156
Delegate Iaquinta - (304) 340-3161
Delegate Mahan - (304) 340-3102
Delegate Marshall - (304) 340-3900
Delegate Perdue - (304) 340-3269
Delegate Phillips, L. - (304) 340-3163
Delegate Poling, D. - (304) 340-3137
Delegate Poling, M. - (304) 340-3265
Delegate Reynolds - (304) 340-3199
Delegate Skaff - (304) 340-3362
Delegate Stowers - (304) 340-3384
Delegate Varner - (304) 340-3187
Delegate Williams - (304) 340-3081
Delegate Andes - (304) 340-3121
Delegate Ashley - (304) 340-3185
Delegate Canterbury - (304) 340-3131
Delegate Cowles - (304) 340-3177
Delegate Evans - (304) 340-3399
Delegate Miller, C. - (304) 340-3176
Delegate Walters - (304) 340-3194

Additional contact information for House Members, including email addresses, can be found here.

Several bills dealing with tobacco were introduced during the first week of the 2012 Legislative Session in West Virginia. They are:

SB-24 - Forbidding tobacco sales in licensed pharmacies - Foster, Facemire - Referred to Health and Human Resources then Judiciary

SB-28 - Creating Smoke Free West Virginia Act - Foster - Referred to Health and Human Resources then Judiciary

SB-141 - Increasing penalties for tobacco use by minors - K. Facemire, Miller - Referred to Health and Human Resources then Judiciary

SB-148 - Creating Transition Program for Tobacco Farmers - K. Facemire, Williams - Referred to Agriculture then Finance

Each of these are carry-over bills from the 2011 session.

Bills are listed here for informational purposes only and no endorsement is to be implied. Clear the Air will review bills more in depth as they begin to move. To track these bills yourself visit the West Virginia Legislative website Bill Status page.

The 2nd Session of the 80th West Virginia Legislature began on Wednesday, January 11, 2012 in Charleston.

Governor Tomblin’s State of the State address to the joint House of Delegates and Senate contained, as expected, no references to tobacco control issues. The Governor’s proposed budget maintains state funding of tobacco prevention and education efforts at the same rate of $5.6 million. This amount remains only a fraction of the Centers for Disease Control and Prevention’s recommendation for West Virginia which is $27.8 million.

Governor Tomblin recommended no new taxes in his proposed budget. With regard to tobacco taxes, the Administration’s Budget Summary Section on General Revenue Fund states:

“The Tobacco Products Tax consists of a per pack tax on cigarettes and a percentage tax on the wholesale price of other tobacco products. Programs continuing to discourage tobacco usage will dampen the outlook for long-term revenue growth for this tax. However, tax rate increases that are implemented in the states surrounding West Virginia can result in short-term increases in revenue.”

This shortsighted approach to the issue of tobacco taxation in West Virginia ignores the dramatic public health impact of raising West Virginia’s tobacco excise tax.

According to the Campaign for Tobacco Free Kids , studies and experience in state after state show that higher cigarette taxes are one of the most effective ways to reduce smoking among both youth and adults. Every 10 percent increase in the price of cigarettes reduces youth smoking by about seven percent and overall cigarette consumption by about four percent.

The Coalition for a Tobacco-Free West Virginia and their partners plan on introducing legislation to increase the tobacco excise tax by $1.00 per pack to $1.55 and also increase the tax on other tobacco products (cigars, snuff, snus, etc.) to 50 percent of the wholesale price of the product.

The issue of increasing West Virginia’s tobacco excise tax is making headlines again as part of the race for Governor. The Charleston Gazette-Mail today printed responses from Democratic candidates on a host of issues, including tobacco taxes, in an article by Alison Knezevich.

According to The Gazette-Mail article:

“West Virginia has the nation’s highest smoking rate. In the past few years, some state lawmakers unsuccessfully pushed to raise the tax on cigarettes and other tobacco products in an effort to decrease tobacco usage.

Kessler and Perdue were the only candidates to say they would raise the tobacco tax, which is one of the lowest in the United States.

Kessler said he would use tobacco-tax revenues for health and anti-drug initiatives. Those would include community-based substance abuse programs, expansion of drug courts and day-report centers with random drug testing, and primary health-care centers.

With the state Medicaid rolls set to grow because of federal health-care reform, Perdue said he likely would use the money for that program, which provides health coverage for the poor and disabled.

Other candidates said they would not raise taxes at this time.”

Some may recall that Acting Senate President Jeff Kessler was co-sponsor of the Coalition for a Tobacco-Free West Virginia supported legislation to increase the tobacco tax by one dollar per pack in the 2011 legislative session.

The Primary Election for the unexpired term of Governor will be held on May 14th. You can read all of the answers by the Democratic candidates to the 10 questions posed by The Charleston Gazette here.

Please take the time to learn the candidates positions on the critical issues facing, like tobacco control efforts and health care, and make sure to vote on May 14th!

SB 362 Increasing the Tobacco Tax by $1 per pack of cigarettes is pending in Senate Finance Committee. Action is needed on Monday to ensure its passage this session!

The bill will help keep thousands of West Virginians from becoming smokers and make our state much healthier. The bill will save lives. It will also generate needed funds for public health priorities for the state.

The Coalition for a Tobacco-Free West Virginia is urging voters to call members of the Senate Finance Committee and ask them to pass SB 362.

There is the possibility that the provisions of SB 362 will be amended into SB 566 which deals with OPEB. The Coaltion for Tobacco-Free West Virginia is urging passage of the tobacco tax on its own merits as an important public health bill and feels it should not be drawn into a debate on employee and retiree benefits.

Please call the members of Senate Finance Committee and urge passage of SB-362 as it is currently written. Contact numbers for these members can be found here by clicking the members name.

The tobacco tax increase bills (HB-2973 & HB-362) are both currently pending in the House and Senate Finance Committees. In order to be considered for passage this year one of these bills needs to proceed from one of these committees by this Friday!

The American Heart Association has made it easy for you to email all of your legislators at one time and urge them to get behind this important legislation.

Click HERE to send your messages RIGHT NOW!

The House Health and Human Resources Committee on Tuesday approved HB-2973 to increase the tobacco excise tax and provide $27 million in funding to tobacco control efforts.

The committee considered, and rejected, two amendments.

The first, by Delegate Patrick Lane, would have inserted into the legislation language providing for drug testing of citizens receiving public assistance.  This amendment was debated for over an hour before being soundly rejected by the committee.

The other amendment, by Delegate Ryan Ferns, would have reduced the tax increase on cigarettes to only 40 cents. This amendment was also rejected.

The bill then passed on a roll call vote with Delegates Ferns, Border, J. Miller, Andes, Ellington, Householder, Lane, C. Miller, Pasdon and Rowan voting no.

The bill now moves to the House Finance Committee.

CNBC reports today that the Council for Citizens Against Government Waste (CCAGW) has sent Acting Governor Tomblin a letter stating:

“West Virginia legislators will soon consider Senate Bill 362 and House Bill 2973, which would raise the tax on a pack of cigarettes from 55 cents to $1.55 and the tax on smokeless tobacco from 7 percent to 50 percent of the wholesale price of each item. On behalf of the 5,894 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in the state of West Virginia, I urge you to veto any bill that increases state excise taxes and instead focus your efforts on cutting wasteful and unnecessary spending from the state budget.”

However, CCAGW has recieved large amounts of funding from the tobacco industry. The St. Petersburg Times reported that CCAGW got at least $245,000 from the tobacco industry and subsequently lobbied on its behalf.

Throughout its history, CCAGW has been accused of fronting lobbying efforts of corporations to give them the appearance of “grassroots” support.

A Senate Finance Committee investigating ties between CCAGW and other non-profits and lobbyist-turned-convict Jack Abramoff in 2006 stated in a report that the groups had ”probably violated their tax-exempt status by laundering payments and then disbursing funds at Mr. Abramoff’s direction; taking payments in exchange for writing newspaper columns or press releases that put Mr. Abramoff’s clients in a favorable light; introducing Mr. Abramoff’s clients to government officials in exchange for payment; and agreeing to act as a front organization for congressional trips paid for by Mr. Abramoff’s clients.”

News of CCAGW’s letter to Acting Governor Tomblin came on the same day the Associated Press reported that Tomblin spokesperson Jacqueline Proctor said that now may not be time for a tobacco tax increase.

Please contact Acting Governor Tomblin’s office at 304-558-2000 or toll-free at 1-888-438-2731 and urge him to stand with West Virginians - not with out-of-state special interest groups - by SUPPORTING the tobacco tax increase this year.

You can also directly email Acting Governor Tomblin from here.