Legislature(2003 - 2004)
04/23/2004 03:33 PM House L&C
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 23, 2004
3:33 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Carl Gatto, Vice Chair
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
Representative Nancy Dahlstrom
COMMITTEE CALENDAR
HOUSE BILL NO. 538
"An Act relating to taxes on cigarettes and tobacco products;
relating to tax stamps on cigarettes; relating to forfeiture of
cigarettes and of property used in the manufacture,
transportation, or sale of unstamped cigarettes; relating to
licenses and licensees under the Cigarette Tax Act; and
providing for an effective date."
- MOVED CSHB 538(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 80
"An Act prohibiting sales of certain soft drinks in public
schools."
- BILL HEARING POSTPONED
PREVIOUS COMMITTEE ACTION
BILL: HB 538
SHORT TITLE: TOBACCO TAX; LICENSING; PENALTIES
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
03/18/04 (H) READ THE FIRST TIME - REFERRALS
03/18/04 (H) W&M, L&C, FIN
03/24/04 (H) W&M AT 7:00 AM HOUSE FINANCE 519
03/24/04 (H) Heard & Held
03/24/04 (H) MINUTE(W&M)
03/26/04 (H) W&M AT 7:00 AM HOUSE FINANCE 519
03/26/04 (H) Heard & Held
03/26/04 (H) MINUTE(W&M)
03/31/04 (H) W&M AT 7:00 AM HOUSE FINANCE 519
03/31/04 (H) Heard & Held
03/31/04 (H) MINUTE(W&M)
04/02/04 (H) W&M AT 7:00 AM HOUSE FINANCE 519
04/02/04 (H) Moved CSHB 538(W&M) Out of Committee
04/02/04 (H) MINUTE(W&M)
04/07/04 (H) W&M RPT CS(W&M) NT 4DP 2DNP 1NR 2AM
04/07/04 (H) DP: SAMUELS, GRUENBERG, WILSON, HAWKER;
04/07/04 (H) DNP: KOHRING, MOSES; NR: WEYHRAUCH;
04/07/04 (H) AM: ROKEBERG, OGG
04/21/04 (H) L&C AT 3:15 PM CAPITOL 17
04/21/04 (H) Heard & Held
04/21/04 (H) MINUTE(L&C)
04/23/04 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
JOHANNA BALES, Excise Audit Manager
Tax Division
Department of Revenue
Anchorage, Alaska
POSITION STATEMENT: Discussed proposed amendments to HB 538 and
answered questions.
JOEL GILBERTSON, Commissioner
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HB 538.
ALLEN STOREY, Lieutenant
Central Office
Division of Alaska State Troopers
Department of Public Safety (DPS)
Anchorage, Alaska
POSITION STATEMENT: Answered questions about enforcement during
the hearing on HB 538.
ACTION NARRATIVE
TAPE 04-47, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:33 p.m. Representatives
Anderson, Gatto, Lynn, Crawford, and Guttenberg were present at
the call to order. Representative Rokeberg arrived as the
meeting was in progress. Representative Dahlstrom was excused.
HB 538-TOBACCO TAX; LICENSING; PENALTIES
[Contains discussion of SB 368, the companion bill]
CHAIR ANDERSON announced that the only order of business would
be HOUSE BILL NO. 538, "An Act relating to taxes on cigarettes
and tobacco products; relating to tax stamps on cigarettes;
relating to forfeiture of cigarettes and of property used in the
manufacture, transportation, or sale of unstamped cigarettes;
relating to licenses and licensees under the Cigarette Tax Act;
and providing for an effective date." [HB 538 was sponsored by
the House Rules Standing Committee by request of the governor;
before the committee was CSHB 538(W&M).]
Number 0010
CHAIR ANDERSON reminded members that at the last hearing the
committee heard from Joel Gilbertson, commissioner of the
Department of Health and Social Services (DHSS); Johanna Bales
of the Department of Revenue; and testifiers both in support of
and opposition to the bill. Although he'd closed public
testimony, he'd asked Commissioner Gilbertson and Ms. Bales to
return.
Number 0079
JOHANNA BALES, Excise Audit Manager, Tax Division, Department of
Revenue, program manager for the cigarette and tobacco products
excise tax, said she was available to explain technical aspects
of the proposed amendments as well as the administration's
position on those.
CHAIR ANDERSON informed members that also available to answer
questions were Larry Meyers, Department of Revenue; and Al
Storey, Alaska State Troopers, Department of Public Safety
(DPS), who'd been present, though not acknowledged, at the
previous hearing.
Number 0166
CHAIR ANDERSON moved to adopt Amendment 1, labeled 23-
GH2116\Q.4, Kurtz, 4/23/04, which read:
Page 10, following line 15:
Insert new bill sections to read:
"* Sec. 25. AS 43.50.710 is amended by adding a
new subsection to read:
(e) Nothing in this section prohibits a
manufacturer from offering promotions to a wholesaler
or a retailer provided the wholesale promotion is the
same for all participating wholesalers and the retail
promotion is the same for all participating retailers.
* Sec. 26. AS 43.50.720 is amended to read:
Sec. 43.50.720. Sale at less than cost; with
gift or concession. In all advertisements, offers for
sale, or sales involving two or more items when at
least one of the items is cigarettes at a combined
price, and in all advertisements, offers for sale, or
sales involving the giving of any gift, concession, or
coupon of any kind in conjunction with the sale of
cigarettes, the wholesaler's or retailer's combined
selling price may not be below the actual cost to the
wholesaler or the actual cost to the retailer,
respectively, of the total of all articles, products,
commodities, gifts, and concessions included in the
transactions, except that, if any articles, products,
commodities, gifts, or concessions are not cigarettes,
the actual [BASIC] cost shall be determined as
provided under AS 43.50.800.
* Sec. 27. AS 43.50.760(b) is amended to read:
(b) The presumptive actual [WHOLESALE AND
PRESUMPTIVE RETAIL] cost of cigarettes as determined
by the department under AS 43.50.800 [FROM THE
MANUFACTURER'S PRICE LIST] is considered competent
evidence in a court action or proceeding as tending to
prove actual cost to the wholesaler or retailer
complained against. A party against whom the
presumptive wholesale or presumptive retail cost as
determined by the department is introduced in evidence
has the right to offer evidence tending to prove any
inaccuracy of the presumptive wholesale or presumptive
retail cost or any statement of facts that would
impair its probative value.
* Sec. 28. AS 43.50.770 is amended to read:
Sec. 43.50.770. Determination of cost of
cigarettes purchased outside of ordinary channels of
trade. In establishing the actual [BASIC] cost of
cigarettes to a wholesaler or retailer, the invoice
cost [OR THE ACTUAL COST] of cigarettes purchased at a
forced, bankrupt, or closeout sale, or other sale
outside the ordinary channels of trade may not be
used.
* Sec. 29. AS 43.50.790(a) is amended to read:
(a) The department
(1) shall administer AS 43.50.710 -
43.50.849;
(2) may adopt regulations relating to the
administration and enforcement of AS 43.50.710 -
43.50.849;
(3) may determine the actual [BASIC] cost
of cigarettes to a wholesaler or retailer as provided
in AS 43.50.800 [FROM INFORMATION OBTAINED FROM A
MANUFACTURER];
(4) may, after reasonable notice and
hearing, revoke or suspend a license issued under
AS 43.50.010 or 43.50.035 to a person who refuses or
neglects to comply with a provision of AS 43.50.710 -
43.50.849.
* Sec. 30. AS 43.50.800 is repealed and reenacted
to read:
Sec. 43.50.800. Presumptions applicable to
determination of cost. (a) The actual cost of
cigarettes to a wholesaler is presumed for purposes of
AS 43.50.710 - 43.50.849 to be the presumptive
wholesale cost as calculated by the department plus an
amount equal to four and one-half percent of the
presumptive wholesale cost to account for business
costs. For purposes of this section, the presumptive
wholesale cost is the manufacturer's list price, less
trade discounts, plus the full face value of all
cigarette taxes.
(b) The actual cost of cigarettes to a retailer
is presumed for purposes of AS 43.50.710 - 43.50.849
to be the presumptive wholesale cost as calculated by
the department under (a) of this section, plus an
amount equal to six percent of the presumptive
wholesale cost to account for business costs.
(c) A wholesaler or retailer that wishes to
advertise, offer to sell, or sell cigarettes at less
than the presumptive actual cost to the wholesaler or
retailer as calculated under (a) or (b) of this
section must first obtain approval from the
department. The department may grant approval only if
the wholesaler or retailer provides proof satisfactory
to the department that the wholesaler or retailer's
actual cost is lower than presumed. Approval for
cigarette sales at less than the presumptive actual
cost as determined under (a) or (b) of this section
may not be granted for a period longer than one year.
In reviewing proof of actual wholesale or retail cost,
the department may consider the costs reflected on the
actual invoice, but may not consider cash discounts.
In reviewing proof of actual business costs, the
department may consider the standards and methods of
accounting regularly employed, and must include labor
costs, rent, depreciation, selling costs, maintenance
of equipment, delivery costs, all types of licenses,
taxes, insurance, advertising, preopening expenses,
provision for impaired assets and closing costs,
interest expenses, and provision for merger and
restructuring expenses.
* Sec. 31. AS 43.50.740(b), 43.50.849(1),
43.50.849(6), and 43.50.849(7) are repealed."
Renumber the following bill sections accordingly.
Number 0211
REPRESENTATIVE GUTTENBERG objected for discussion purposes.
CHAIR ANDERSON informed members that this was adopted in the
Senate Finance Committee [as an amendment to SB 368]. He
remarked, "I've been told by one of the facilitators and
interested parties who want this amendment that they believe the
Department of Administration is not averse to it." He read from
the governor's March 16, 2004, transmittal letter, which
indicates the intention of reducing cigarette consumption in
Alaska by doubling the excise tax to $2 a pack. He said the
governor's expectation is that the resulting price increase for
a carton of cigarettes will provide a financial incentive for
existing smokers to quit, discourage new smokers from picking up
the habit, and restrict access by youth to these products.
CHAIR ANDERSON acknowledged the arrival of Representative
Rokeberg. He continued, saying the state's position seems to be
that any increase in cost will reduce consumption. Last year,
with SB 168, Alaska attempted to join 25 other states with fair-
trade laws that prohibit the sale of below-cost cigarettes.
Despite the new law, some wholesales and retailers use
"predatory pricing practices" to promote the sale of cheap
cigarettes. Since there are known, inherent health risks from
tobacco consumption, he said, it is inconsistent with state
policy to allow distributors and retailers to promote cigarette
sales by using cigarettes as a loss leader.
CHAIR ANDERSON indicated he deduced from this letter that the
administration would support an amendment to ban the practice of
allowing distributors and retailers to use using predatory
pricing schemes to promote the sale of cigarettes. He explained
that [among other things] Amendment 1 repeals and reenacts the
language in AS 43.50.800 and strengthens existing laws. Asking
Ms. Bales to explain the current system and what this amendment
might do, he acknowledged she wasn't promoting it, but surmised
she wasn't opposing it either.
Number 0420
MS. BALES explained that last year's SB 168 had a provision such
that cigarettes cannot be sold below cost. Since the January 1
effective date, some distributors in Alaska haven't been selling
below cost necessarily; because of their size, however, their
discounts from the manufacturers and so forth tend to be larger
than those of other in-state distributors, or their cash flow
may enable them to take additional discounts because they can
pay earlier, for example. She said:
The way this language was originally written is that
you could not reduce the price of your cigarettes by
customary discounts for cash. Of the 25 other states
that have similar language, ... 65 percent of those
states do not allow customary discounts for cash. At
the ninth hour of the legislation last session, the
customary discounts for cash was thrown into the bill.
... It's a concern for in-state distributors, and ...
we understand their concerns and certainly have no
disagreement with them on that.
MS. BALES addressed another aspect of Amendment 1 as follows:
Because we do get information from manufacturers, we
know what cigarettes sell for. We post a price. If
you sell below that cost, we, on a complaint basis,
will go out and check to see if there's problems.
What ends up happening there is these companies can
continue to sell their cigarettes at a low cost before
we have a chance to look at it. This amendment would
require that they get preapproval from the Department
of Revenue before selling their product below the
amount that we post.
CHAIR ANDERSON referred to testimony at the previous hearing by
Michael Elerding of Ketchikan, owner of Northern Sales [Company
of Alaska, Inc.]. Chair Anderson indicated that Anchorage
distributors must contend with those out-of-state distributors
as well. He explained that he'd moved to adopt [Amendment 1] to
try to bring parity and some balance, and to ensure that
everyone has to abide by the same regulatory scheme, since he
believes the last-minute amendment [to SB 168] affected local
distributors adversely.
Number 0640
REPRESENTATIVE GUTTENBERG informed members that Mr. Elerding had
come to his office to outline this problem; he thanked him for
bringing this forward. He asked Ms. Bales what criteria have
been used by the department to grant the [preapproval].
MS. BALES responded that this expands items that the department
would look at and increases the department's ability to request
"more and more documentation from a company if we're not
comfortable with what they've provided." Businesses all work
differently and have different accounting systems; thus this
language doesn't specifically outline what they have to provide.
Citing an example of a multistate and multinational company that
had only provided the costs of operating in Alaska, despite
having support from regional headquarters, she opined that
requiring prior approval is a good idea because it gives the
department more time to get the necessary information.
CHAIR ANDERSON remarked that he'd brought up where [those
distributors] live, in Ketchikan and Anchorage, because of
wanting to help local folks.
Number 0750
MS. BALES, in response to a further question from Representative
Guttenberg, explained:
Any provision that's put in Title 43 is subject to ...
the hearing process. So if we tell any business, "No,
we're not happy with your information," they have the
right to appeal any determination that we made and
take it up to an appeals officer and then also take it
... outside to the Office of Tax Appeals [Department
of Administration] and then ... up the chain. ... We
will try to identify, as much as we can, but at this
time ... we really need to do our homework to figure
out how these businesses operate, to make sure that we
have regulations that pertain to all the different
nuances that come up.
Number 0846
MS. BALES, in response to questions, specified that a cigarette
is defined as tobacco rolled in paper. For example, herbal
clove "cigarettes" don't contain tobacco or nicotine and aren't
taxed.
REPRESENTATIVE GATTO surmised that these other products would be
harmful in some way, however.
MS. BALES said she didn't know, but didn't believed they had
caught on much.
Number 0920
REPRESENTATIVE GUTTENBERG withdrew his objection.
CHAIR ANDERSON asked whether there was any further objection.
There being no objection, Amendment 1 was adopted.
Number 0987
REPRESENTATIVE ROKEBERG moved to adopt Amendment 2, labeled 23-
GH2116\Q.2, Kurtz, 4/20/04, which read:
Page 4, line 20:
Delete "the total proceeds of the tax multiplied
by the quotient of seven divided by 62"
Insert "8.9 percent of the total proceeds of the
tax"
CHAIR ANDERSON objected for discussion purposes.
REPRESENTATIVE ROKEBERG explained that 8.9 percent of the total
proceeds of the tax would be in addition to the amount in the
education and cessation fund. Recalling testimony at the
previous hearing about this, he said there seemed to be a
question then with regard to whether 8.9 percent is the correct
amount to equal the approximately 8.1 percent, to his
recollection, that is the basic floor for the Centers for
Disease Control and Prevention (CDC). He asked Ms. Bales
whether this is the accurate figure.
MS. BALES responded that currently the tobacco-use education and
cessation fund receives $4.4 million to $5 million, depending
upon payments to the master settlement agreement (MSA); that
fund receives 20 percent of MSA payments, which have fluctuated
between $4.4 million and $5 million each year. Whereas the bill
allocates an additional $5 million to that fund, the CDC has
estimated at minimum that Alaska, based on its population and
cigarette consumption, should allocate $8.1 million to $8.4
million to the tobacco-use education and cessation fund. She
further explained:
What this amendment does is it slightly reduces the
amount that's in the original bill. But in total, the
8.9 percent that is in this amendment would direct
approximately $4 million from cigarette-tax revenues
that are deposited in the general fund ... to be
appropriated to the tobacco-use education and
cessation fund. ... With the $4 million and the $4.4
million from the MSA, there'd be a total annually of
$8.4 million, which would meet the minimum CDC levels.
Number 1147
JOEL GILBERTSON, Commissioner, Department of Health and Social
Services (DHSS), in response to Representative Rokeberg,
specified that the administration supports the amendment.
CHAIR ANDERSON removed his objection and announced that
Amendment 2 was adopted.
Number 1176
REPRESENTATIVE ROKEBERG moved to adopt Amendment 3, labeled 23-
GH2116\Q.3, Kurtz, 4/20/04, which read:
Page 3, lines 7 - 9:
Delete "100 cigarettes imported by an individual
for personal consumption during the calendar month or
the first"
Page 3, line 9:
Delete "during the calendar month"
Insert "[100 CIGARETTES IMPORTED BY AN INDIVIDUAL
FOR PERSONAL CONSUMPTION] during the calendar month"
Page 4, lines 14 - 16:
Delete "100 cigarettes imported by an individual
for personal consumption during the calendar month or
the first"
Page 4, line 17:
Delete "during the calendar month"
Insert "[100 CIGARETTES IMPORTED BY AN INDIVIDUAL
FOR PERSONAL CONSUMPTION] during the calendar month"
REPRESENTATIVE ROKEBERG asked Ms. Bales or Commissioner
Gilbertson to address this amendment, saying it is directed in
part to a request of the administration.
MS. BALES explained that during hearings in the House Special
Committee on Ways and Means, Representative Rokeberg offered an
amendment to allow an individual, as discussed last time, to
personally carry in 600 cigarettes a month. As the amendment
was drafted, however, current language allowing a person to
bring in 100 cigarettes remained in the bill. She said the
administration has requested removal of that language, since
Representative Rokeberg's intention was to have the total be
600, not the 700 that it appears someone could bring in. Thus a
person could personally transport in 600 cigarettes each month
and there would be no tax on that amount.
Number 1246
REPRESENTATIVE ROKEBERG referred to Section 7, page 3, lines 7-
9. He pointed out that Amendment 3 would limit the importation
of even the 100 cigarettes currently allowed, unless personally
transported. It tightens it up from a 100-cigarette tolerance
to a zero-tolerance policy for any importation, including the
Internet, but leaves the amendment he'd made previously in terms
of the personal transportation of three cartons, which he said
was intended to decriminalize activity of people physically
bringing in cigarettes for personal consumption. He said his
prior amendment speaks to the method of importation only, and
the rationale behind the 600 is that it would allow a person to
bring in three cartons of cigarettes without becoming a class A
misdemeanant subject to up to one year in jail and $10,000 in
fines, "overkill of the worst order."
Number 1330
REPRESENTATIVE GATTO suggested changing "calendar month" to
"within any 30-day period" because, for example, someone who
wants to get around the restriction could take across a quantity
at nearly midnight at the end of a month and then do it again
after midnight, defeating the intent.
REPRESENTATIVE ROKEBERG said he wouldn't object to a friendly
amendment, although perhaps it could be more difficult to
enforce. He indicated the language had been the drafter's
choice in order to have a timeframe.
MS. BALES responded that she thinks the calendar month is much
easier to enforce. She pointed out that in the example posed by
Representative Gatto, the person couldn't bring anything else in
for at least another 30 days, at the beginning of the next
month.
REPRESENTATIVE GATTO clarified that he was thinking of someone
passing through Canada, for example, and taking a one-time
opportunity. He suggested perhaps it isn't worth addressing
that infrequent activity.
MS. BALES reiterated that having it within a calendar month
makes it easier for enforcement and when developing cases, for
instance.
REPRESENTATIVE ROKEBERG pointed out a technical problem brought
to his attention by the committee aide: line 5 of the amendment
[which read "Page 3, line 9"] should say "Page 3, line 10".
Number 1478
CHAIR ANDERSON removed his objection. He announced that
Amendment 3 [as amended by the aforementioned technical change]
was adopted.
Number 1500
REPRESENTATIVE CRAWFORD [moved to adopt Amendment 4, a four-page
amendment that changed the age from 19 to 21 throughout the bill
and changed the title to add ", and raising the age for
purchase, sale, exchange, or possession of tobacco to age 21"].
CHAIR ANDERSON objected for discussion purposes.
REPRESENTATIVE CRAWFORD explained that since the intention is to
reduce consumption of cigarettes and limit the number of young
people who start smoking, he believes raising the age to 21 is a
good method. He acknowledged that teenagers might hang around
with older youths, but indicated that without access to people
who can buy cigarettes legally, youths will have a harder time
obtaining tobacco products. He mentioned that his related bill
has been languishing in the House Community and Regional Affairs
Standing Committee for more than a year.
REPRESENTATIVE ROKEBERG remarked that he didn't particularly
care for the amendment, but asked about impacts to enforcement,
the history of enforcement, and the effectiveness of current
enforcement against underage people.
Number 1606
COMMISSIONER GILBERTSON noted that this question relates to
multiple departments. He said DHSS doesn't do enforcement
against minors who purchase tobacco products, but does "Synar
enforcement" of compliance by retailers, conducting stings by
using confidential informants under the age of 19 who are hired
by DHSS and accompanied by law enforcement personnel; the young
person attempts to buy tobacco products illegally from retail
establishments, presenting valid identification that clearly
states that he or she is under the legal age to purchase tobacco
products.
COMMISSIONER GILBERTSON explained that Synar enforcement relates
in part to a federal requirement for SAMHSA [Substance Abuse and
Mental Health Services Administration] block grants, which are
alcohol- and substance-abuse grants that [the U.S. Department of
Health and Human Services] provides to the states. He said:
To receive your full grant, you must be a state that
does Synar enforcement, and you must have compliance
in your Synar enforcement to receive your full block
grant. The requirement is that you cannot have an
illegal-sale rate that's greater than 20 percent,
which means no more than 20 percent of the time you do
the stings on retail establishments can you
successfully purchase products for minors.
COMMISSIONER GILBERTSON noted that Alaska had been noncompliant
since Synar enforcement began in the late 1990s, with illegal-
sale rates to confidential informants in percentages ranging
from the low to mid-30s. Therefore, DHSS increased its
enforcement efforts and retailer education; he cited "great
partnerships" with retailers and distributors with respect to
training the workforce and ensuring there are good protocols in
place, through a cooperative and not punitive effort. He added
that for 2002 the illegal-sale rate in the stings was 30.2
percent, whereas for 2003 it was down to 10 percent. Mentioning
law enforcement by DPS and local law enforcement for purchases
outside of the sting effort, he deferred to DPS to respond
further.
Number 1740
REPRESENTATIVE ROKEBERG asked for details about block grant
money.
COMMISSIONER GILBERTSON explained that if the state is
noncompliant, above the 20 percent threshold, the sanction is
that the state loses 40 percent of its SAMHSA block grant; for
Alaska, that's about $2 million in substance-abuse grants.
However, the U.S. Department of Health and Human Services does
allow a state, in lieu of that 40 percent penalty, to "purchase
the continued funding of its block grant" by paying a monetary
penalty that goes into enhanced enforcement.
COMMISSIONER GILBERTSON, noting that the penalty is cumulative,
said Alaska chose for a number of years to instead take the
alternative penalty, an increase in general fund dollars for
enforcement; perhaps $800,000 a year was being paid in enhanced
tobacco enforcement as a penalty for being above that 20 percent
threshold. Now that it's below the threshold for the first
time, the state no longer has to pay the penalty and will
receive the full SAMHSA block grant. If the legal-sale age were
raised and noncompliance increased to above 20 percent again, he
said the same situation would arise whereby the state could lose
40 percent of the block grant or would have to invest more money
in [tobacco-related enforcement].
REPRESENTATIVE ROKEBERG asked what that would do to funding for
enforcement, and whether it would lower it.
COMMISSIONER GILBERTSON replied that more enforcement funding
would be needed.
REPRESENTATIVE ROKEBERG asked whether it had been lowered.
COMMISSIONER GILBERTSON said no.
Number 1818
REPRESENTATIVE GUTTENBERG surmised that the concern is that
changing the [age] will affect the compliance rate.
COMMISSIONER GILBERTSON acknowledged that he didn't know whether
it would do that.
REPRESENTATIVE GUTTENBERG asked whether the concern would be
alleviated somewhat if this were done through a phase-in such
that someone who now is 18 years old couldn't [purchase tobacco
products] until the age of 21, for example.
COMMISSIONER GILBERTSON pointed out that in many states the age
is 18 or even lower. He remarked that a staggered increase in
the legal-sale age would make it easier for enforcement to "step
up and do retailer education," but whatever age the legislature
chooses, [DHSS] would work diligently to make sure the state is
in compliance with Synar.
Number 1885
CHAIR ANDERSON remarked that even though he supports the bill,
for him it comes down to rights and a balance. He said he
didn't know whether this [change to age 21] was necessarily
appropriate to attach to this bill, and he'd rather see it
debated in a separate piece of legislation. He suggested it
might bring in more tobacco-industry opposition, and he'd rather
see the bill move forward without the change at this juncture.
Number 1920
REPRESENTATIVE LYNN recalled that at 20 years old, he flew the
first supersonic interceptor in the U.S. Air Force inventory.
He said he didn't smoke then or now, but hated to think he could
fly the first supersonic interceptor and yet couldn't buy a
cigarette if he wanted to. Now there are many 20 year olds
being shot at in Iraq, he noted, who on return wouldn't be able
to buy a cigarette.
REPRESENTATIVE ROKEBERG asked Lieutenant Storey for his opinion
on Amendment 4 and whether it would add to difficulties in
enforcement.
Number 1988
ALLEN STOREY, Lieutenant, Central Office, Division of Alaska
State Troopers, Department of Public Safety, said he doesn't
believe a large amount of enforcement effort takes place [by
DPS]; it's generally left up to DHSS to do enforcement, although
officers may on occasion write citations for underage smoking.
He apologized for not having statistical data on how many
citations have been written.
Number 2026
REPRESENTATIVE GUTTENBERG asked whether DPS only enforces at the
point of sale, then.
LIEUTENANT STOREY replied that he believes citations are written
for sales on occasion, but the vast majority are through the
DHSS underage-smoking-enforcement unit.
REPRESENTATIVE GUTTENBERG asked what the enforcement level is on
the military bases for statutes like this.
MS. BALES answered that, to her belief, the smoking age is 18 on
military installations.
REPRESENTATIVE LYNN mentioned military reservations and said he
believes those who join up can have the same exemptions
[throughout the country].
CHAIR ANDERSON maintained his objection to Amendment 4.
REPRESENTATIVE CRAWFORD said he thinks it's the right thing to
do for a number of reasons. He noted that when he was 18 years
old, he could buy cigarettes or beer legally; however, that age
has been raised to 21, a policy call. He said this is a policy
call as well, but one he wouldn't try to make now.
Number 2116
REPRESENTATIVE CRAWFORD withdrew Amendment 4, saying he wants
this bill to pass and not be weighted down by this issue.
REPRESENTATIVE GATTO remarked that there is a connection between
smoking and drinking; that evidence has been presented showing
the two seem to reinforce each other physiologically; and that
although Representative Crawford had withdrawn the amendment, he
understood its value. However, he said he was glad Amendment 4
was withdrawn because of the merit of the bill on its own.
The committee took an at-ease from 4:15 p.m. to 4:16 p.m.
Number 2178
REPRESENTATIVE CRAWFORD moved to report [CSHB 538(W&M), as
amended, out of committee with individual recommendations and
the accompanying fiscal notes].
REPRESENTATIVE LYNN objected. He declined to speak to the issue
at this point.
A roll call vote was taken. Representatives Rokeberg, Crawford,
Guttenberg, Gatto, and Anderson voted in favor of reporting the
bill from committee. Representative Lynn voted against it.
Therefore, CSHB 538(L&C) was reported from the House Labor and
Commerce Standing Committee by a vote of 5-1.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:20 p.m.
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