Legislature(2009 - 2010)CAPITOL 106
03/26/2009 03:00 PM House HEALTH & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB188 | |
| Confirmation Hearing|| Commissioner, Department of Health and Social Services | |
| State Medical Board | |
| HB188 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 188 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
March 26, 2009
3:04 p.m.
MEMBERS PRESENT
Representative Bob Herron, Co-Chair
Representative Wes Keller, Co-Chair
Representative John Coghill
Representative Bob Lynn
Representative Paul Seaton
Representative Sharon Cissna
MEMBERS ABSENT
Representative Lindsey Holmes
COMMITTEE CALENDAR
HOUSE BILL NO. 188
"An Act relating to the taxation of moist snuff tobacco, and
amending the definition of 'tobacco product' in provisions
levying an excise tax on those products."
- HEARD AND HELD
CONFIRMATION(S)
Commissioner, Department of Health and Social Services
Bill Hogan - Juneau
- CONFIRMATION ADVANCED
State Medical Board
Dr. David Miller
Casey Millar
Edward Hall
Dr. David Powers
- CONFIRMATION(S) ADVANCED
PREVIOUS COMMITTEE ACTION
BILL: HB 188
SHORT TITLE: TAX ON MOIST SNUFF
SPONSOR(s): REPRESENTATIVE(s) HERRON
03/12/09 (H) READ THE FIRST TIME - REFERRALS
03/12/09 (H) HSS, L&C, FIN
03/24/09 (H) HSS AT 3:00 PM CAPITOL 106
03/24/09 (H) <Bill Hearing Rescheduled to 03/26/09>
03/26/09 (H) HSS AT 3:00 PM CAPITOL 106
WITNESS REGISTER
DR. JAY BUTLER, Chief Medical Officer
Office of the Commissioner
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions on HB 188.
EMILY NEENAN, Alaska Government Relations Director
American Cancer Society Cancer Action Network (ACS CAN)
Anchorage, Alaska
POSITION STATEMENT: Testified about HB 188.
JOHANNA BALES, Deputy Director
Anchorage Office
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Testified about HB 188.
MICHAEL HOUGH, Director
Commerce, Insurance and Economic Development & Public Safety and
Elections Task Forces
American Legislative Exchange Council (ALEC)
Washington, DC
POSITION STATEMENT: Spoke in favor of a weight based tax.
MONTE WILLIAMS
United States Smokeless Tobacco Company (USSTC)
POSITION STATEMENT: Testified in support of HB 188.
BILL HOGAN, (Acting) Commissioner
Office of the Commissioner
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Answered questions during his confirmation
hearing for his appointment as Commissioner of DHSS.
DR. DAVID POWERS
Dillingham, Alaska
POSITION STATEMENT: Answered questions during his confirmation
hearing for the State Medical Board.
EDWARD HALL, Physician Assistant (PA)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during his confirmation
hearing for the State Medical Board.
DR. DAVID MILLER
Juneau, Alaska
POSITION STATEMENT: Answered questions during his confirmation
hearing for the State Medical Board.
CASEY MILLAR
Anchorage, Alaska
POSITION STATEMENT: Answered questions during her confirmation
hearing for the State Medical Board.
JENNY OLENDORFF
Soldotna, Alaska
POSITION STATEMENT: Testified about HB 188.
STEVE WARREN
Sitka, Alaska
POSITION STATEMENT: Testified about HB 188.
CARRIE NYSSEN, Senior Director of Advocacy
American Lung Association of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified about HB 188.
CHRIS SHIRWIN, Vice President
Advocacy and Government Affairs
American Heart Association
POSITION STATEMENT: Testified about HB 188.
ACTION NARRATIVE
3:04:08 PM
CO-CHAIR WES KELLER called the House Health and Social Services
Standing Committee meeting to order at 3:04 p.m.
Representatives Herron, Keller, Coghill, and Seaton were present
at the call to order. Representatives Cissna and Lynn arrived
as the meeting was in progress.
HB 188-TAX ON MOIST SNUFF
3:04:31 PM
CO-CHAIR KELLER announced that the first order of business would
be HOUSE BILL NO. 188, "An Act relating to the taxation of moist
snuff tobacco, and amending the definition of 'tobacco product'
in provisions levying an excise tax on those products."
3:05:20 PM
CO-CHAIR HERRON introduced HB 188 as the prime sponsor and said
that he had prepared a Committee Substitute (CS) for HB 188, but
had not yet distributed it to other members of the committee.
He clarified that the committee would first hear public
testimony on HB 188 until 3:30 p.m. and then hear testimony for
the confirmations.
3:06:36 PM
REPRESENTATIVE COGHILL commented that a CS might require
additional testimony.
3:07:04 PM
CO-CHAIR KELLER said that public testimony would be opened
again.
3:07:18 PM
CO-CHAIR HERRON read from the Sponsor Statement [Included in the
members' packets.] and explained that HB 188 changed the tax
methodology used for smokeless tobacco products in order to
discourage the use of tobacco. He stated that the use of "chew"
was a crisis in his region. He declared that the additional tax
revenue would be placed in the general fund or the cessation
fund. He supported a change from the ad valorem tax to a unit
tax.
3:08:40 PM
DR. JAY BUTLER, Chief Medical Officer, Office of the
Commissioner, Department of Health and Social Services (DHSS),
testified that one study revealed that a 10 percent increase in
the tax on smokeless tobacco would lead to a 4 percent decrease
in the use by adults, and a 6 percent decrease in use by boys.
He allowed that the health risks are well known and included
cancers of the mouth, gum disease, and cardio vascular affects.
He said that the use of smokeless tobacco was high in Alaska,
almost 5 percent of adults in 2008. He disclosed that tobacco
and obesity were the two drivers of increased health care costs.
He shared that DHSS was concerned about the weight based tax, as
it would reduce the tax on some products and create a price
disparity which favored the newer, light weight tobacco
products. He described snus as a smokeless, heavily flavored
tobacco product, packaged in small, self contained tin packets.
He mentioned that the juices could be swallowed which removed
the social stigma of spitting. He described the orbs as gel
strips, which dissolved in the mouth, but provided the nicotine
kick. He acknowledged that the product weight created an uneven
tax field and price disparity. He compared the weights for a
tin of snus to be 10 percent of a tin of Copenhagen, so the tax
would also be 10 percent that of the Copenhagen. He also noted
that weight based taxes were inflation proof, as the portion
price for tax would decline as the product price increased.
3:12:43 PM
DR. BUTLER expressed concern that HB 188 would create low priced
tobacco products, which would increase tobacco use among youth.
3:13:16 PM
REPRESENTATIVE CISSNA asked about the [health] qualities of the
gel strip orbs.
3:13:37 PM
DR. BUTLER replied that the health effects were not well
defined, but he observed that it was banned in Australia and
most of the European Union.
3:15:51 PM
EMILY NEENAN, Alaska Government Relations Director, American
Cancer Society Cancer Action Network (ACS CAN), applauded the
objectives of HB 188 to increase the price, decrease the use,
and decrease the death and disease from the use of smokeless
tobacco. She disclosed that certain populations of Alaskans had
some of the highest smokeless tobacco use in the world. She
reported that 67 percent of pregnant women in the Yukon-
Kuskokwim (Y-K) region used smokeless tobacco. She expressed
concerns about the current version of HB 188. She relayed that
the bill did not have any price adjustment for inflation, as the
weight based tax was fixed. [She passed around a tin of camel
snus.] She expressed concern about the use of these tobacco
products by youth, as they were discreet, easy to hide, and
nicely flavored. She mentioned that the current ad valorem
tobacco tax rate of 75 percent of wholesale price had not been
increased since 1997.
3:20:48 PM
REPRESENTATIVE CISSNA asked if the use of smaller amounts of
tobacco, such as the use of snus, eliminated the dangers.
3:23:01 PM
MS. NEENAN, in response to Representative Cissna, said that
ingesting tobacco was not safe. She allowed that there was
debate about the amount of risk for different tobacco products,
but she compared this to playing Russian roulette.
3:23:59 PM
JOHANNA BALES, Deputy Director, Anchorage Office, Tax Division,
Department of Revenue (DOR), referred to the fiscal note for HB
188, and explained that there would be an initial revenue
increase, but that as the lightweight tobacco products became
more prevalent, the weight based tax method would decrease the
tax revenue.
3:25:30 PM
CO-CHAIR HERRON disclosed that the CS for HB 188 would address
these issues.
3:26:16 PM
MICHAEL HOUGH, Director, Commerce, Insurance and Economic
Development & Public Safety and Elections Task Forces, American
Legislative Exchange Council (ALEC), declared that this was a
tax fairness issue, and that ALEC favored a weight based tax, as
opposed to an ad valorem tax. He explained that ad valorem
taxed at different rates for like products, as the tax was less
for a less expensive product. He expressed that the ad valorem
tax would unfairly influence consumer choice.
3:28:02 PM
MONTE WILLIAMS informed the committee that USSTC were the
manufacturers of the round cans of smokeless tobacco. He
explained that excise taxes were levied on individual
measureable units. He cited as examples, a gallon of gas, a
liter of wine, and a single cigarette. He stated that sales
taxes were levied on the price of the product. He referred to
the Other Tobacco Products (OTP) tax, which was a percentage of
the wholesale price on all tobacco products except cigarettes.
He commented on the introduction and sales growth for discounted
tobacco products priced "below the premium level," which
resulted in the loss of tax revenue for Alaska. He opined that
ad valorem taxes favored lower priced brands, and that lower
taxes should not be a reward for lowering the price of the
product.
3:34:29 PM
MR. WILLIAMS said that the ad valorem tax was not a good excise
tax policy. He reported that tobacco prices were not
increasing, so there was no increased revenue with an ad valorem
tax. He cited that price cuts resulted in tax revenue cuts. He
commented that a weight based tax was good for revenue, as the
same tax was applied to all the products. He stated that the
weight based tax was not a reward for lower prices. He reported
that 16 states had adopted a weight based tax. He expressed
that USSTC supported HB 188.
[HB 188 was taken up later in this meeting.]
3:38:34 PM
The committee took an at-ease from 3:38 p.m. to 3:39 p.m.
^CONFIRMATION HEARING
^Commissioner, Department of Health and Social Services
3:39:24 PM
CO-CHAIR KELLER announced that the next order of business would
be confirmation of the appointment of Bill Hogan to the position
of Commissioner of Department of Health and Social Services
(DHSS).
BILL HOGAN, (Acting) Commissioner, Office of the Commissioner,
Department of Health and Social Services (DHSS), said that he
had been working in health and social service, primarily in
mental health and substance abuse, for 35 years. He spoke about
his background work prior to his arrival in Alaska, which
included an emphasis with rural issues. He pointed out that he
started work with the State of Alaska in 2003, as the Director
of the Division of Behavioral Health. He affirmed that Governor
Palin had nominated him in July, 2008, as Commissioner. He
expressed his department philosophy as a social mission: to
create an effective, efficient organization which provided the
quality services necessary for successful living in the
community; and as a business mission: to be good stewards of the
public dollar and adhere to the bottom line.
3:43:26 PM
MR. HOGAN observed that DHSS focused on outcomes for helping
people. He stated that the DHSS programs were only helpful if
they successfully trained people to live in and contribute to
the community, stay out of the criminal justice system, and stay
in school or find a job. He expressed the need for "true
outcomes." He said that articulated priorities were important,
and he noted that he had already spoken to the House Health and
Social Services Standing Committee about those priorities. He
mentioned the Department of Health and Social Services (DHSS)
accomplishments, which included the integration of the Division
of Alcohol and Drug Abuse with the Division of Mental Health,
and the integration of the service delivery system to create a
behavioral health delivery system. He explained that 60-65
percent of the people they served had co-occurring problems. He
reported that the Bring the Kids Home initiative had reduced the
out of state placement of kids.
3:46:24 PM
MR. HOGAN spoke about integration within the department when
working with families, as many of the divisions worked with the
same families. He confirmed that morale had improved in the
last several months, as there was good leadership, a solid
direction, and that DHSS was "making a difference." He approved
of the DHSS management of the Medicaid budget, and opined that a
reasonable FY10 budget request for only a 0.02 percent increase
had been submitted. He confirmed the DHSS intent to treat
people with dignity and respect, function with integrity, and
appreciate its partners.
3:48:58 PM
CO-CHAIR KELLER asked about the biggest challenges still ahead.
3:49:22 PM
MR. HOGAN said that it was necessary to address the priorities
in a fiscally responsible manner. He surmised that there would
never be enough money to meet all the needs, and that the
biggest challenge was to do the most with the dollars available.
He pointed out the frustrations of state bureaucracy, but he
welcomed that the "prize" was doing good things for individuals
and families.
3:50:54 PM
REPRESENTATIVE CISSNA noted the difficulty of constantly
changing elected officials and agendas. She commented on the
integrated work between many departments.
3:53:11 PM
MR. HOGAN, in response to Representative Cissna, said that he
did work with the criminal justice agencies and that he
recognized the need to have solid community behavioral health
programs, definitive housing options, and an array of vocational
options. He opined that the costs for individuals in the
correctional system would be reduced if these agencies worked
together. He explained how necessary it was for DHSS to work
with the Department of Education. He acknowledged the
importance for the foundation of relationships and that DHSS was
ready for the next steps.
3:55:31 PM
CO-CHAIR HERRON referred to Mr. Hogan's resume, noted that he
managed a super agency, and asked if he was a superman.
3:55:56 PM
MR. HOGAN responded that the DHSS structure was nationally
referred to as a super agency, as few states had all the Health
and Social Service agencies included in one department.
3:56:35 PM
CO-CHAIR HERRON asked why Mr. Hogan only remained an average of
three years at a job.
3:57:07 PM
MR. HOGAN said that he liked to start programs, but not to
maintain them. He said that he had no intention of moving on
from this position.
3:57:55 PM
CO-CHAIR HERRON asked why Mr. Hogan had decided to work with
DHSS.
3:58:25 PM
MR. HOGAN replied that, while working outside the state job, he
had opined that he would "make a difference and do things
differently." He laughingly acknowledged his realization that
this was not so easy to accomplish. He observed that progress
had been made during his tenure as Deputy Commissioner.
4:00:40 PM
MR. HOGAN, in response to Co-Chair Herron, said that any
problems in DHSS probably touched every person in Alaska.
4:02:10 PM
REPRESENTATIVE LYNN asked if he had been involved in the
"certificate of need" discussions.
MR. HOGAN said that he was not significantly involved. He noted
that new regulations were soon to be released for public
comment.
4:03:43 PM
REPRESENTATIVE COGHILL commented that Alaska had numerous health
systems, including the Indian Health Services and the [Division
of] Behavioral Health service, with different structures which
often dealt with the same people. He asked if it needed to be
improved.
4:04:56 PM
MR. HOGAN replied that the Native Health Corporations were
important partners and that, in many regions of Alaska, the
Native Health was the only provider. He reported that Native
Health were the first to recognize the co-existing problems of
mental health and substance abuse. He observed that Native
Health engaged families and he allowed a challenge was to modify
Medicaid, in order for Native Health to bill for its services.
He did not agree that there were separate or parallel systems,
and he counseled for one integrated system.
4:06:34 PM
REPRESENTATIVE COGHILL agreed that it was necessary to work
together, especially to have the Medicaid rules work for
everyone.
4:07:16 PM
REPRESENTATIVE SEATON asked if DHSS had any comments about Human
Resources (HR) now being a separate, centralized agency, in
contrast to DHSS control of its own HR department.
4:09:11 PM
MR. HOGAN noted that each department had their own HR, when he
first worked for the State of Alaska. He expressed his pleasure
with the Department of Administration liaison, but he offered
his opinion that the successful working relationship was
personality driven.
4:11:24 PM
REPRESENTATIVE COGHILL moved to forward the nomination of Bill
Hogan to the joint session of the House and Senate for
confirmation. There being no objection, the confirmation of
Bill Hogan was advanced from the House Health and Social
Services Standing Committee.
^State Medical Board
4:11:47 PM
CO-CHAIR KELLER announced that the next order of business would
be confirmation hearings for the appointments of Dr. David
Miller, Casey Millar, Edward Hall, and Dr. David Powers to the
State Medical Board.
4:12:03 PM
DR. DAVID POWERS explained that he was "glad for the
opportunity" to serve on the state medical board. He opined
that his perspective on work in rural Alaska would lend well to
solutions for the long distance challenges of rural health care.
4:14:01 PM
EDWARD HALL, Physician Assistant (PA), said that he was
completing his first four year term on the board. He opined
that it was important to have PA representation on the board.
4:15:29 PM
REPRESENTATIVE CISSNA asked how his perspective had changed the
way the board viewed issues.
4:15:59 PM
MR. HALL said that when he arrived in Alaska, there were not
many PA's working in the state. He explained that many
providers were still not aware of the scope of practice for
PA's.
4:17:34 PM
DR. DAVID MILLER said that he would represent both the surgeon
perspective and SE Alaska.
4:18:37 PM
REPRESENTATIVE LYNN asked Dr. Miller about his service with the
U.S. Air Force.
DR. MILLER said that Alaska was his duty station with the Air
Force, and that he had decided to stay in Alaska.
4:19:19 PM
REPRESENTATIVE CISSNA asked what the important issues were for
Dr. Miller.
4:20:02 PM
DR. MILLER considered that his responsibility was "to maintain
high professional and ethical conduct." He responded that he
had no agenda as a member of the board and that his decisions
would be based on the safety and security for patients, the
protection for hospitals, and the just and impartial treatment
for physicians.
4:21:29 PM
CASEY MILLAR said that she was interested in becoming the public
member on the board. She announced that she would be a
reasonable voice for the public as a consumer representative.
She offered to give a fresh perspective from a non-medical
viewpoint.
4:23:05 PM
REPRESENTATIVE COGHILL moved to forward the nominations of Dr.
David Miller, Casey Millar, Edward Hall, and Dr. David Powers to
the joint session of the House and Senate for confirmation.
There being no objection, the confirmations of Dr. David Miller,
Casey Millar, Edward Hall, and Dr. David Powers were advanced
from the House Health and Social Services Standing Committee.
HB 188-TAX ON MOIST SNUFF
4:23:38 PM
CO-CHAIR KELLER announced that the final order of business would
be a return of the committee's attention to discussion of HB
188.
JENNY OLENDORFF expressed concern for tobacco use, especially
among children. She stated that she had worked in tobacco
prevention programs for three years, and she reported a
documented increase in the use of smokeless tobacco products.
She noted that the increase of regulations for cigarette use had
increased the use of smokeless products by youth. She stated
that kids considered smokeless use to be a healthier alternative
to smoking. She offered her belief that tobacco companies had
increased its marketing of smokeless tobacco to the youth. She
opined that HB 188 would make lightweight tobacco products, such
as snus, more affordable for youth. She opined that weight
based taxes had historically increased tobacco use. She
declared that cheaper, more available, tobacco products was "a
recipe for passing on a deadly addiction to yet another
generation." She expressed her interest in the proposed CS.
4:26:18 PM
STEVE WARREN reported that he had established a tobacco
cessation program in Sitka. He declared that HB 188 favored
lightweight tobacco products. He described the tobacco
marketing campaign as designed to attract youth. He suggested
that there be a tax on units of nicotine. He expressed his
concern with the current version of HB 188.
4:29:52 PM
CO-CHAIR HERRON, in response to Mr. Warren, said that the CS for
HB 188 would target the lightweight products.
4:31:31 PM
CARRIE NYSSEN, Senior Director of Advocacy, American Lung
Association of Alaska, said that the American Lung Association
was concerned with the long term effect of HB 188. She
described the bill as special interest legislation that would
distort the tobacco taxation system for the benefit of a tobacco
manufacturer. She endorsed the current ad valorem tax system of
tobacco products, other than cigarettes. She declared that the
weight based tax created a tax loophole for the low weight
products, and that this tax would not maintain pace with
inflation or price increases. She expressed concern for the
increased nicotine addiction of Alaskan youth, as a weight based
tax favored the smokeless tobacco products that were attractive
to youth. She offered support for a policy to increase revenue
and discourage tobacco use.
4:34:47 PM
REPRESENTATIVE SEATON, referring to the testimony about the
addition of nicotine to other products, asked if nicotine was
regulated by the Food and Drug Administration (FDA) and if it
was permitted as a chemical additive to other products.
4:35:39 PM
MS. NYSSEN said that she would get some information.
4:35:59 PM
REPRESENTATIVE CISSNA compared the current nicotine additive to
the historical addition of cocaine to Coca-Cola.
4:36:47 PM
CHRIS SHIRWIN, Vice President, Advocacy and Government Affairs,
said that the American Heart Association shared the same
concerns as the other agencies. He warned of the harms from
smokeless tobacco, and the concern that these were "gateway"
products. He said that a weight based tax favored the premium
smokeless products, as this would lower its taxes. He lobbied
to increase the ad valorem tax, or implement a significant tax
floor for these products.
4:41:23 PM
REPRESENTATIVE LYNN asked about the goal of the bill.
4:41:42 PM
CO-CHAIR HERRON reflected that "chew" was at a crisis level in
his district. He responded that his goal was to increase
revenue to the cessation fund, instead of the general fund. He
opined that the danger was the new lightweight tobacco products,
not the ad valorem tax.
4:44:11 PM
REPRESENTATIVE LYNN shared a concern for the expansion of the
"sin" taxes.
4:44:36 PM
CO-CHAIR HERRON said that he was annoyed with the advertising
messages. He established that his original intent with HB 188
was to reduce the use of tobacco products, and to increase
funding for the cessation grants.
4:45:44 PM
CO-CHAIR KELLER reminded the committee to keep the questions to
the bill at hand.
4:45:58 PM
REPRESENTATIVE CISSNA declared that "habit" had brought Alaska
nationwide attention for bad habits. She requested that any
solution not allow for the continuance of "habits."
4:48:08 PM
REPRESENTATIVE SEATON reopened the question of whether the
placement of nicotine in other products could be restricted by
state law, if it was not restricted by federal law. He
summarized about the need to curtail nicotine addiction and he
commented on the possibility of a "tax floor per sale," which
would cover weight or quantity.
4:50:02 PM
[HB 188 was held over.]
4:50:22 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 4:50 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Confirmation Resumes.pdf |
HHSS 3/26/2009 3:00:00 PM |
|
| HSS188pkt.PDF |
HHSS 3/26/2009 3:00:00 PM HHSS 4/9/2009 3:00:00 PM |