Tobacco and vape products are displayed at Burnette’s Store in Hagåtña on Tuesday, Dec. 12, 2023.
HAGÅTÑA (The Guam Daily Post) — The Office of the Attorney General is suggesting increasing tobacco taxes and funneling that additional revenue into relevant agencies so that they can hire personnel and enforce regulations on tobacco and related products.
It would be a “simple fix” to concerns about funding enforcement and deterrent efforts, according to Deputy Attorney General Fred Nishihira, who represented the OAG during a public hearing on several bills related to tobacco, nicotine and vaping on Tuesday.
These measures are generally focused on preventing tobacco and nicotine use among youth. They include Bill 186-37, which would update the use of tobacco fees and penalties, Bill 187-37, which would prohibit the sale of tobacco and vape products through vending machines, Bill 194-37, which would update fines and penalties for tobacco and nicotine violations, and Bill 195-37, which would set restrictions on tobacco and e-cigarette advertisements.
Before Nishihira testified Tuesday, Guam Behavioral Health and Wellness Center Director Theresa Arriola expressed general support for Bill 186, noting in part that her agency has had to dedicate resources for required retail inspections, which had taken prevention funding away from other tobacco prevention strategies.
Guam Customs and Quarantine Agency Director Ike Peredo supported Bill 194, while also recommending amendments to clean up the bill’s language and create some uniformity for customs officers to determine fines without ambiguity.
But if additional personnel are needed to enforce regulations or recommendations, which would require a consistent funding stream, then the proposed updates to fees and penalties wouldn’t be enough to sustain that, according to Nishihira.
“I’ve spoken with the attorney general about this. It would reduce regulations and, certainly, taxing on not only our attorneys as far as enforcing violations, but a simple fix would be to increase the tax, push those tax increases to Guam Behavioral Health, to Customs and Quarantine, and there you have a steady stream of funding,” Nishihira said.
He added that the OAG is “suffering” from a lack of attorneys and other staff.
“By adding these additional regulations and, especially in the other bills that we look at, increasing the fines, the chances of businesses going and opposing those fines will end up in a litigation of some type of matter, which, basically, makes our office decide which is going to be the priority,” Nishihira said.
Attorney General Douglas Moylan has determined that criminal matters should take precedence at the OAG, and other areas, particularly administrative areas, may become secondary, the deputy AG added.
The measure on tobacco and e-cigarette advertisements, Bill 195, for example, would be “very difficult” for the OAG to continuously enforce due to the attorney shortage on the island, especially if it would be supported only through fines and fees, according to Nishihira.
“At the end result, if we’re looking and saying what will occur that will prevent tobacco (use), especially youth tobacco (use), are inspectors at that level, then (a tax increase) is the recommendation that we would be pushing forward,” Nishihira said.
At a later point during Tuesday’s hearing, Nishihira said most cigarette users will buy one pack instead of a carton at a time.
“What I can confidently say is that if we increase cigarettes by $1 a pack – this is just cigarettes – you will have a slight decrease in tax (revenue) and then it will go up,” Nishihira said.
“But more important because what I’ve heard is that they need more people on the ground to do these inspections as being the deterrent for the people smuggling in either cigarettes or vapes. If you’re looking for a funding stream by increasing the taxes, you will have a slight decrease. But then you can arrange that increase to go to Behavioral Health (and) Customs and Quarantine,” Nishihira added.
The deputy AG noted that Bill 194 would require tobacco license applications to include a certification of completion from an education program on rules regarding the sale of tobacco and nicotine products, prevention of use and cessation programs.
That would require additional staff and asking to implement this program without a dedicated funding source would stretch an agency’s resources thinner.
“For me, it should be the business people’s duty to know the laws, not us to teach them. That’s why, when I spoke with AG Moylan, he was like, if you want to reduce bureaucracy, then just increase the taxes. The mechanisms are in place and dedicate that stream, like I said, to agencies that need it,” Nishihira said.
Sen. Sabina Perez, the main sponsor behind all four bills heard Tuesday, said there is another public hearing for a bill on taxes, although she didn’t specify the bill.
There doesn’t appear to be a bill to increase taxes, but there are two measures that would tax electronic vape products. Bill 193-37 would establish an excise tax on electronic nicotine delivery systems, for which there are no local standardized tax regulations. Bill 197-37 would also levy a tax on vaping products.
