The Oklahoma Tobacco Settlement Endowment Trust (TSET) was created by voters in 2000 to manage and invest proceeds and earnings from the national tobacco lawsuit settlement in which former Attorney General Drew Edmondson was a leader with other AGs around the country. Edmondson wisely recommended, and Oklahoma voters agreed, to put the money in trust with a constitutional mandate to support strategies and programs designed to maintain or improve the health of Oklahomans.
Apparently spurred by legislation last session that amended the definition of “tobacco products,” TSET on August 26 passed a resolution asking the legislature to include all new and emerging tobacco products in Oklahoma’s statutory definition of tobacco products. By exempting new and emerging tobacco products like nicotine pouches, nicotine toothpicks, dissolvables and others, the new law made them not subject to state tobacco excise taxes. The new and emerging tobacco products are considered tobacco products by the FDA, making the definition of tobacco products in Oklahoma law inconsistent with the definition in federal law. According to TSET, the recent legislation was promoted by tobacco industry lobbyists.
The TSET resolution paints a dismal picture of the tobacco industry, pointing out that in 2006, a U.S. federal court found Altria, Philip Morris USA, R.J. Reynolds, and other tobacco companies in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), citing 145 distinct acts of racketeering in a 1,682-page ruling (United States v. Philip Morris) and finding the companies’ fraudulent conduct permeated all aspects of their operations, that they would likely continue committing fraud indefinitely into the future, and that their conspiracy sought not only to misinform the public, but also lawmakers.
The TSET resolution says that the tobacco industry has developed new and emerging products that addict people, especially youth, to nicotine. Addiction to nicotine makes individuals more likely to use conventional tobacco products, including combustible cigarettes, the leading cause of preventable death in Oklahoma, according to TSET. These new and emerging tobacco products have not been approved by the FDA.
Unlike some other state boards and commissions where agency directors serve at the pleasure of the governor and citizen board or commission members can be removed at any time without cause, the TSET board serves seven-year fixed terms, which gives them the independence to call out the tobacco industry and urge changing recent legislation.
I looked at the legislation to which I believe the TSET board refers, and it’s pretty difficult to tell exactly what it does. There are two bills, House Bill 2292 and Senate Bill 1078, that relate to tobacco products tax enforcement. Together they add and subtract from the definition of tobacco products in a way that would cause one to need a careful explanation to understand. The fiscal note says SB 1078 is necessary to implement the enforcement provisions of HB 2292. SB 1078 was passed through the Joint Committee on Appropriations and Budget in the rush at the end of session. I doubt that any legislator had a firm grasp of the tobacco products definition changes. This looks like leftover business for next year.