Legislature(1997 - 1998)
04/10/1997 03:23 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SSHB 189 - RESTRICT TOBACCO SALES Number 1676 CHAIRMAN ROKEBERG announced the next order of business would be SSHB 189, "An Act relating to sale of tobacco and tobacco products; and providing for an effective date." Number 1712 REPRESENTATIVE HUDSON moved that the committee adopt SSHB 189, Version E, dated 03/27/97, be adopted. Hearing no objection, SSHB 189 was before the committee. CASEY SULLIVAN, Legislative Administrative Assistant to Representative John Cowdery, Alaska State Legislature, came before the committee to explain SSHB 189. He said the bill limits public access to tobacco products in retail premisses. As it is currently written, one can sell and purchase tobacco products on a licensed liquor premise from retailers with a tobacco endorsement or by licensed vending machines. Mr. Sullivan said the bill adds a section where it allows only the sales clerk to have access to any tobacco product prior to sale. This will ban self-service tobacco displays found today in many stores and will put more responsibility on retail employees who sell the tobacco products. He stated Americans for Nonsmoker Rights have noted that banning self-service displays may reduce youth access in two ways. One, youth may be less likely to attempt purchase when they have to request tobacco from a store employee and show identification, rather than just handing the product to the clerk; and two, the absence of display makes it more difficult to shoplift tobacco products. Mr. Sullivan pointed out that approximately 171 different cities have adopted similar laws to restrict this public access. He urged support for the legislation. Number 1796 REPRESENTATIVE RYAN referred to page 2, line 5, of the legislation, which relates to sales by vending machines, and asked how sales by vending machines will be controlled. MR. SULLIVAN explained currently in statute, AS 11.76.100 (B), there are already stipulations that pertain specifically to vending machines. He explained subsection (B) says a vending machine must be located in a place that is directly and continually supervised by a person employed on the licensed premise during the hours the vending machine is accessible to the public. Number 1846 REPRESENTATIVE COWDERY said the tobacco and health issue has been a hot issue over the last couple of years. He said another piece of legislation that pertains to tobacco taxes may not work. By raising the cigarette tax to $1 per pack, he doesn't believe it will keep our youth from smoking. Representative Cowdery informed the committee he had smoked for 40 years and quit. Number 1941 REPRESENTATIVE RYAN referred to the amount of money being spent to combat drugs and said it has driven the price up very high. Yet we find drug use by our youth population is at an all time high. If they can afford the cost of drugs, he would seriously doubt that $1 per pack tax on cigarettes would have any impact whatsoever. CHAIRMAN ROKEBERG asked Mr. Sullivan, "Why did you not provide for the provision for existing freestanding, for example, or separate premised tobacco shops to be able to sell tobacco products." MR. SULLIVAN stated it is still covered statutorily under AS 43.70.075. He said when retail premises apply for a business license, they have to also obtain a tobacco endorsement. Essentially, any retail premise can sell tobacco products with a tobacco endorsement. Mr. Sullivan read from AS 43.70.075, "Unless a person has a business license endorsement issued under this section, a person may not sell cigarettes, cigars, tobacco, or products containing tobacco as a retailer. An endorsement required under this section is in addition to any other license or endorsement required by law." Number 2046 MR. SULLIVAN explained that AS 43.50.010 discusses the actual license. He read, "A person may not sell, purchase, possess, or acquire cigarettes as a manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer without a license. (b) The department, upon application and payment of the fee, shall issue a license to each manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer." Mr. Sullivan explained that the definition section goes on to discuss those areas which would probably include tobacco shops. He said the bill limits, in one area, the public access to tobacco products and retail premises. The bill would ban self-service tobacco displays in retail premises, and to buy tobacco would have to be done through the sales clerk. He read from SSHB 189, "the sales occurs in a manner that allows only the sales clerk to have access to the cigarettes, cigars, tobacco, or product containing tobacco prior to sale." Number 2198 CHAIRMAN ROKEBERG asked if there are provisions in the bill relating to selling tobacco products in the bush where people may only be supplied by special mail deliveries. MR. SULLIVAN indicated he didn't understand the question. CHAIRMAN ROKEBERG asked how a person would buy cigarettes if they live out in Anaktuvuk Pass. MR. SULLIVAN explained the legislation doesn't address provisions relating to mail order. He said in the bush, people go to the general store and at those stores, a buyer would have to go through the employee. Number 2226 REPRESENTATIVE COWDERY said, "Rural areas that didn't have licensed -- that were dry areas wherever they were sold, they would have to be sold through a licensed premises out of (indisc.) and the person selling would be responsible to assure that the age of the buyer is of legal age." He said he doesn't know what could keep someone from shipping something in even in dry areas. Number 2267 REPRESENTATIVE HUDSON questioned how much annual revenue is received from tobacco taxes. Number 2281 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division Department of Revenue, responded the annual revenue is $15 million. REPRESENTATIVE HUDSON asked what the annual estimate of the cost of current penalties that would be imposed upon dealers for selling to youth. He said he would like to know what the current law produced in the way of penalty receipts to the state. Number 2319 LOREN JONES, Director, Division of Alcoholism and Drug Abuse, Department of Health and Social Services, came before the committee. He said his division has been asking that same question as they have reviewed the tobacco legislation in terms of their enforcement. Mr. Jones said they haven't found any records where any tobacco seller or vendor has ever been convicted of selling to a minor under the age of 19. He pointed out that in the restrictions that are placed on a license, either through AS 43.50 or AS 43.70, it requires a conviction in court before they can act. He said they haven't found any records where any vendor has ever been convicted of selling to a minor. Mr. Jones said the revenues received by the state for the penalties for sale are zero. Number 2349 REPRESENTATIVE COWDERY asked if he is saying that the law is on the books, but it's not enforced. MR. JONES explained there are many kids that have been arrested and fined in court for possession. No seller, to his knowledge, has ever been convicted in court for selling to a minor. REPRESENTATATIVE COWDERY asked Mr. Jones what his personal opinion is why a seller has never been convicted. MR. JONES said he believes it is twofold. It is a resource issue. He said, "If you are a local police department and you're required to enforce this, if you are out of school or driving down the street or you arrest the minor for other violations and you see the person with tobacco, you have observed the crime being committed. That youth possesses. In order to determine whether a vendor has sold requires some effort on the police department and they have many other priorities and low resources. The difference with alcohol beverages is you have the Alcohol Beverage Control (ABC) Board that has enforcement officers and they have powers. They can go in and observe. They can watch liquor stores." Mr. Jones explained that currently the enforcement of the tobacco ordinance is left up to local police departments and they have many many other priorities, including liquor violations, drunk driving, domestic assaults. He said while some legislation talks about enforcing the increase of penalties, nobody is willing to say, "Pay overtime at the local police departments so they would actually do it." He said the fines against the vendors aren't high enough and there is no real entity in the state that is charged with enforcing the tobacco laws except local police. Mr. Jones explained the second place where that comes in is when a liquor license holder pays their license fee to the state, it is refunded back to the municipality in which it was gained. He referred to the people who hold liquor licenses in Anchorage and said when they pay their biannual fees, that money is refunded back to the municipality of Anchorage. If they do not enforce local liquor laws, the commissioner of the Department of Revenue can withhold that revenue sharing money. That is an enticement for the local police department to enforce liquor laws. TAPE 97-37, SIDE B Number 0001 REPRESENTATIVE COWDERY said, "We, in our -- I think we imposed or suggested a $300 fine. So if we made that $20,000 or $50,000, it probably would have no effect?" MR. JONES said if half of that fine were to be given to the local police departments, they would probably go after it. He noted one of the ways that some of the drug laws are enforced is through the forfeiture of assets. If a dealer is convicted, you can take their car or their boat. When police departments get some of that money, that is an inducement. Mr. Jones said there may be other ways to transfer some of the revenues from tobacco tax increases back to local communities to encourage them to enforce. Mr. Jones said the department feels that enforcement is one element to the package and they don't think it's a substitute for the increase in the tax, especially if the enforcement is simply increasing the penalties of things that are never enforced. He said his department would much rather see the tax and some enhanced enforcement. Number 0099 CHAIRMAN ROKEBERG asked what the department's official position is on the bill. MR. JONES referred to the original version of the bill and said they were opposed to it because you could only sell in a liquor store. He said they currently don't have an official position on the sponsor substitute. Number 0119 ERIC MYERS testified via teleconference from Anchorage on behalf of himself. He stated he would like to commend Representative Cowdery for his sincere interest in the issue. Mr. Myers said Representative Cowdery's proposal, in context, would actually be a very complimentary piece of legislation to the overall effort, including education efforts, youth access restrictions, enforcement and increases in the tobacco tax. Mr. Myers said, "One thing we need to keep in mind here with this - even with the proposal such as this, the expectations need to be limited -- investigations -- very aggressive compliance with vendors has shown that unless you achieve compliance rates, which are professionally unattainable in the order of about 85 percent, you don't see substantial (indisc.) of teen smoking." Mr. Myers stated enforcement is really the issue. You can create all sorts of laws, there are lots on the books, but they aren't being enforced. He said he would encourage the committee to specifically ask representatives of the tobacco industry for their commitment and state publicly their support for this particular piece of legislation. He informed the committee of a New York Times story titled, "Why the Tobacco Industry Found Taxes Hazardous to its Health," and said the real thing the tobacco industry fears the most is tobacco taxes. Number 0266 DIANA KUHNS, Chief Operating Officer, Western Pacific Division, American Cancer Society, testified via teleconference from Anchorage. She applauded Representative Cowdery for introducing the legislation and offered support of the American Cancer Society. Ms. Kuhns explained that at this point in time, there isn't much data available regarding the impact of tobacco consumption in relationship to the legislation. She said her organization supports the bill because they believe it would reduce youth access to tobacco and would help separate tobacco into an adult product class. Ms. Kuhns offered an invitation to sit down with Representative Cowdery and share information and scientific data which does prove that taxation is an effective measure in reducing youth consumption of tobacco. REPRESENTATIVE COWDERY said he would be happy to discuss the issue further with Ms. Kuhns. Number 0351 PATRICIA SENNER, Executive Director, Alaska Nurses Association, testified via teleconference from Anchorage. She said in addition to being a registered nurse, she is the mother of three children. She stated the Alaska Nurses Association is in favor of SSHB 189 because it reduces the opportunity for teenagers to purchase tobacco products by limiting the types of locations at which they are sold. Ms. Senner said she has been upset at a local grocery store which is frequented, at lunch time, by high school students. Cigarettes in that grocery store are located right in the front main isle where they're easily accessible. She said the grocery store also owns a tobacco shop located right down the street from two schools. As soon as the shop opened, they put Joe Camel in neon lights in the front window. She said her organization believes that a tobacco tax is probably the best method of reducing youth consumption of tobacco products, but they also want to make it more difficult for youths to access tobacco products sold in stores. REPRESENTATIVE ROKEBERG asked if the Joe Camel sign is still in the window. MS. SENNER indicated it is still up and has been there since the day they opened. She said, "Carrs said they were trying to discourage youth from taking - buying cigarettes from their grocery store, but they left the cigarettes right in the front isle right behind the cashier (indisc.) and then they put Joe Camel up in the front window (indisc.)." Number 0492 NANCY KUHN testified via teleconference from Fairbanks on behalf of herself. She informed the committee members she is the mother of four. Ms. Kuhn explained that currently there are no United States laws nor proposed laws that are going to limit tobacco sales (indisc.) out to the liquor outlets. There is no scientific data of how this measure will impact underage consumption of tobacco. There are currently no state laws, although there are some proposed in Vermont and Minnesota, that would ban self-service displays of tobacco. Approximately 170 local jurisdictions across 11 states presently have ordinances that ban self-service displays of tobacco. She said the local ordinances are relatively recent and there isn't any available data regarding their impact on tobacco consumption by youth. Ms. Kuhn informed the committee there is a 1995 study by the Center for Behavioral and Community Health of San Diego State University which concludes stores that have allowed customers access to tobacco are more likely to sell tobacco to minors than stores that did not. They attribute this to the fact that the simple act of having to request the product reinforces the special age restrictions to the clerk. The authors of the California study also concluded that the large restricting self- service displays of tobacco will reinforce the message that tobacco products are not in the same class as candy, soda pop and potato chips. Ms. Kuhn said although she supports HB 189, she would also like to take a firm stand in saying that increasing the price of tobacco, through increased taxation, is a proven and effective method to reduce youth consumption of tobacco. She said it is recommended by the Surgeon General, the General Accounting Office of the United States and the American Medical Association and numerous health organizations. Ms. Kuhn said she would hope that the legislature would be sure that any program that is intended to limit tobacco use by children would include a tobacco tax and it would be center piece of any decision. She thanked the committee for listening. CHAIRMAN ROKEBERG informed Ms. Kuhn that the Senate had passed tobacco tax legislation earlier that day. Number 0657 JENNY MURRAY, testified via teleconference from Fairbanks. She read the following testimony into the record on behalf of Dr. John Petraitis. "My name is Dr. John Petraitis. I live at 30319 List Circle in Eagle River. I'm an assistant professor at University of Alaska, Anchorage, and I have studied ways of curving youth addiction to tobacco products. Unfortunately, I could not be here today, so I have asked Jenny Murray to share with you scientific evidence that applies to HB 189. That bill was written to limit youth their access to tobacco, any (indisc.) a bill seeks to reduce the supply of tobacco to youth in hopes of limiting the consumption of tobacco by youth. "Currently there are no federal or state laws comparable to HB 189. However, approximately 170 localities across the country have ordinances which ban self-service displays of tobacco. Unfortunately, these local ordinances are relatively recent and there are no available data regarding their impact on tobacco consumption rate by youth. There is, however, one published study that looks to link between self-service displays and sales rates to youth. That study concluded that stores with self-service displays of tobacco are more likely to sell tobacco to minors than stores that kept tobacco behind the counter. Unfortunately, that study only looked at the sales of tobacco to youth, something that was not eliminated in either type of store, yet those stores with only behind the counter displays. The study did not look at consumption of tobacco by youth, therefore, there are no scientific conclusions that can be drawn about effects of HB 189 on youth consumption. However, clear scientific conclusions can be drawn about the link between the price of tobacco and youth consumption. Study after study suggests that increasing the price of tobacco through increased taxation is likely to have a stronger more immediate and a more long-lasting effect on tobacco consumption by youth. "In conclusion, HB 189 might modestly reduce some sales of tobacco to youth, but by contrast, increasing tobacco taxes will eliminate much of the demand and consumption of tobacco by youth. This is why the U.S. Surgeon General and the American Medical Association have concluded that any serious policies to curve youth smoking must include tobacco tax increases as a center piece. Nothing - nothing - nothing the Alaska legislature will do is likely to have the same effect on youth smoking, therefore, the (indisc.) suggests that HB 189 might be a useful addition to tobacco tax increases, but it would make a poor substitute. Thank you very much for your time." Number 0770 CHAIRMAN ROKEBERG said he would like to speak to the sponsor about clarifying amendments. He referred to legislation introduced the previous session called the loose cigarette bill. He asked Representative Cowdery if he would have an objection to adding that to his bill. It wouldn't allow single cigarettes to be sold. REPRESENTATIVE COWDERY said he would consider that a friendly amendment. CHAIRMAN ROKEBERG indicated he has some concerns about the clarity of the legislation, the way it is structured and the mailing to rural areas. He said the way he understands the bill, it would prohibit the sales via mail. Number 0856 REPRESENTATIVE COWDERY explained he would be open to any amendments that would be effective regarding that issue. However, he has questions as to how can you stop people from ordering cigarettes. He said he believes that would be difficult to enforce. Number 0897 REPRESENTATIVE RYAN referred to stores giving incentives to get one of their cards to cash checks, et cetera. People are asked at the register if they have a card and they put it through the scanner. That information is kept in a computer and is sold to companies that issue coupons, et cetera. So they only send you the coupons that reflect the items which they manufacture that you purchase. This saves them a lot of money. Representative Ryan said it would be very easy for people who issue drivers licenses to put a bar code on the license that would verify the age of the person. People in the stores could scan the bar code and tell for sure whether the person was of age. It would also keep a record of who bought what. CHAIRMAN ROKEBERG indicated it is his intention to hold the bill over so that he can consult with the sponsor. He referred to the first section of the bill and said language is being deleted that says, "selling or giving tobacco to a minor." Chairman Rokeberg said by deleting the words, "giving tobacco to a minor," it takes away the ability to punish anybody for actually giving tobacco away. He asked what the intention was. MR. SULLIVAN explained it was a grammatical and stylistic change by the drafter. He said he wasn't provided with an explanation of the change. CHAIRMAN ROKEBERG said the SSHB 189 would be held over for further consultation with the bill sponsor.
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