Legislature(2023 - 2024)SENATE FINANCE 532
05/04/2023 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB53 | |
| SB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 53 | TELECONFERENCED | |
| + | SB 89 | TELECONFERENCED | |
| *+ | SB 133 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
May 4, 2023
9:07 a.m.
9:07:19 AM
CALL TO ORDER
Co-Chair Olson called the Senate Finance Committee meeting
to order at 9:07 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Matt Claman, Sponsor; Nancy Meade, General Counsel,
Alaska Court System; Stacie Kraly, Director, Civil
Division, Department of Law; Senator Gary Stevens, Sponsor;
Tim Lamkin, Staff, Senator Gary Stevens; Shawn Arnold,
Principal, Thunder Mountain High School, Juneau; Sylvan
Robb, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community
and Economic Development; Pam Leary, Director, Treasury
Division, Department of Revenue; Dr. Lisa Rabinowitz, Staff
Physician, Division of Public Health, Department of Health.
PRESENT VIA TELECONFERENCE
Karen Bloxsom, Assistant Principal, Wasilla High School;
Joe Darnell, Chief Investigator, Tobacco Enforcement and
Youth Education, Department of Health; Katie Steffens,
Deputy Program Manager, Tobacco Prevention and Control,
Department of Health; Brandon Spanos, Deputy Director, Tax
Division, Department of Revenue; Carrie Nyssen, American
Lung Association, Vancouver, Washington; Joe O'Connor,
Director of Tobacco, Holiday Companies, St. Paul,
Minnesota; David Parrott, Self, Soldotna; Alex McDonald,
Self, Fairbanks; June Rogers, Self, Fairbanks; Alyssa
Keill, Self, Fairbanks; Jennifer Chikoyak, Self, Kenai;
Elizabeth Ripley, President and CEO, Mat-Su Health
Foundation, Wasilla; Tabitha Blades, Self, Soldotna; Emily
Nenon, American Cancer Society, Cancer Action Network,
Anchorage; Jessi Walton, Self, Fairbanks; Patricia
Patterson, Self, Kenai Peninsula; Vikki Jo Kennedy, Self,
Juneau; Megan Boelter, Preventing Tobacco Addiction
Foundation, New Mexico; Schell Hammel, Smoke Free
Alternative Trade Association, Texas.
SUMMARY
SB 53 FIVE-YEAR INVOLUNTARY COMMITMENTS
CSSB 53 (FIN) was REPORTED out of committee with
three "do pass" recommendations and with one no
recommendation recommendation and with two
amend recommendations, and with one new zero
fiscal note from the Department of Family and
Community Services, one new fiscal impact note
from the Department of Law, one new zero fiscal
note from the Judiciary, and two previously
published fiscal impact notes: FN3 (ADM), FN 5
(ADM).
SB 89 AGE FOR TOBACCO/NICOTINE/E-CIG; TAX E-CIG
SB 89 was HEARD and HELD in committee for further
consideration.
SB 133 OPIOID REMEDIATION FUNDS
SB 133 was SCHEDULED but not HEARD.
SENATE BILL NO. 53
"An Act relating to involuntary civil commitments."
9:07:57 AM
Co-Chair Olson read the title of the bill and asked the
sponsor to give a brief synopsis. He noted that Version O
of the bill was before the committee for consideration.
9:08:23 AM
SENATOR MATT CLAMAN, SPONSOR, relayed that he supported the
Committee Substitute - Version O as adopted in committee
the previous day. He referenced previous discussion that
had pertained to the concept that there were two different
tracks for involuntary commitment. He noted that the bill
itself did not create anything that did not already exist
for people in short term psychiatric care and people in
long term psychiatric care. He explained that there was a
practical difference between those that were there for long
periods, and some had been held for as long as 9 years. He
referenced testimony that indicated there was no difference
in the process of whether an individual stayed or did not
stay, and there was no legal distinction. The practical
consideration had to do with beds for long term patients
and beds for short term patients.
Senator Claman continued his remarks and noted that the
bill would close the gap between individuals whose case may
be dismissed for incompetency and starting an involuntary
commitment proceeding. He wanted to clarify that the
process in court whereby an involuntary commitment
proceeding was filed (in terms of the bill) was a fairly
simple process. The court was likely to have a one- or two-
page form which would take a short time for the prosecutor
to fill out before the charges were dismissed. He thought
more detailed questions (such as who was raising competency
questions and whether an individual was found incompetent)
were not changed by the bill and were already in statute.
Co-Chair Olson commented that the longer the bill was
discussed the less likely it was to pass.
Senator Wilson asked if the committee could hear from Nancy
Meade, the General Counsel for the Alaska Court System.
Senator Wilson referenced the sponsors remarks about not
having a two-tiered system, and asked if the courts saw a
difference in short term and long-term civil commitment. He
asked about the process. He asked if the court had any
issues with the current system for civil commitments.
9:12:17 AM
NANCY MEADE, GENERAL COUNSEL, ALASKA COURT SYSTEM, was not
certain by what Senator Wilson meant by "two tiers." She
clarified that with the bill, it was the case that someone
who had previously been found incompetent to stand trial
and was subsequently admitted for the beginnings of a
mental commitment, could (after the periods of commitment
in the statute) be additionally committed for a 5-year
term. The additional commitment was only available if the
individual had previously been found incompetent to stand
trial, which was different to an individual that entered
the mental commitment system without having been previously
found incompetent to stand trial.
Senator Wilson asked about a person that might be committed
for 5 years rather than a similar individual that was
committed for 180 days.
Ms. Meade affirmed that it was true that someone in the
system not as a result of being found incompetent to stand
trial in a criminal case (and entered the system another
way) could not be committed for 5 years and would have a
180-day commitment that could also be subsequent 180-day
commitments. She noted that as Dr. Becker had testified the
previous day that there were long-term committed
individuals with serial 180-day commitments. She thought
the bill did set up a different system for someone who had
been previously found incompetent to stand trial in a
criminal case; and the person would not be going through
(necessarily) a series of 180-day commitments but could be
committed once for five years. The distinction was based on
being previously found incompetent to stand trial.
Senator Wilson asked if the hearings proposed in the bill
and the normal civil commitment process time frames were
the same.
Ms. Meade answered "yes," and noted that the bill set up a
three-day evaluation, which most mental commitments started
with. During the 3-day evaluation at the Alaska Psychiatric
Institute (API), if the professional person in charge had
reason (mental illness and likely to seriously harm self or
others), the professional could file for a 30-day mental
commitment and follow with a 90-day and 180-day commitment
if warranted. The bill would create an option for
individuals whose commitment came from a criminal case in
which the person was found incompetent, there was an
additional option to be committed for five years. The five-
year commitment was not an option for individuals that did
not enter the system after a finding of incompetence.
9:15:58 AM
Senator Kiehl MOVED to ADOPT Amendment 1, 33-LS0172\O.1
(Dunmire, 5/2/23).
Co-Chair Olson OBJECTED for discussion.
Senator Kiehl spoke to Amendment 1. He thanked the sponsor
and Co-Chair Olson's office for the CS, which he thought
made some material improvements in the bill and addressed
some of his concerns. He addressed a concern that there was
potential for the government to hold an individual that had
not been convicted of a crime for up to five years. He
commented that the span of five years was longer than he
trusted the government and longer than could be justified
medically or constitutionally. He noted that the amendment
took the maximum of five years down to a maximum of two
years, which was still four times the longest that was
currently in place.
Senator Kiehl explained that the reason that the amendment
proposed two years was due to the powerful testimony
offered by a person that had been stabbed. He thought there
was a rationale for allowing a longer commitment than the
current law but considered that raising the limit by 10
times raised constitutional questions. He contended that it
was difficult to concur when medical personnel had
testified that the current system was working. He noted
that after two years the government would have to prove a
person was still dangerous. He noted that the provision
applied to any felony charge, some of which did not result
in two years of jail time. He thought a length beyond two
years brought up constitutional and freedom issues.
Co-Chair Olson questioned how to protect society from a
person with mental issues, especially in rural areas.
Senator Kiehl clarified that he was referring to people
that were already hospitalized and had been in a locked
mental health facility, wherein medical personnel had
judged the person to be dangerous. He considered that if a
person was still deemed as medically dangerous, the hold
would be renewed. He mentioned the victims perspective.
9:20:30 AM
Senator Bishop asked the bill sponsor if the change to two
years proposed in the amendment defeated the purpose of the
bill.
Senator Claman expressed that the two-year period proposed
in the amendment did not completely defeat the purpose of
the bill, but the five-year time period was what was
consistently proposed by testimony. He referenced multiple
hearings and thought that from a victim's perspective, five
years offered more assurance than two years. He noted that
the bill allowed a person committed for five years that was
shown to be safe the ability to go before the court in six
months to establish that they were no longer a danger and
be released. He reiterated his point about a five-year
commitment offering more assurance to victims. He agreed
that two years was better than six months.
Senator Bishop expressed concern that dangerous individuals
would be released to commit additional crimes.
Senator Wilson had similar concerns as Senator Kiehl. He
referenced testimony. He thought there was a difference
between different court systems including a jury versus not
having due process. He had concerns about individuals being
committed without being evaluated. He referenced testimony
from API and the Court System, and the lack of necessary
facilities. He suggested that the topic would come up when
considering the budget the following year as a result of
API needing to renovate its facility to accommodate long
term stays. He supported the amendment.
9:24:11 AM
Senator Merrick asked the sponsor if there was a way to
assure that an individual released would continue on
medication.
Senator Claman relayed that the most significant way for
API to accomplish that was to keep individuals in
involuntary commitment on an out-patient basis. He
continued that API currently engaged in the practice, and
API testimony had referenced an individual currently
engaged in out-patient supervision.
Co-Chair Olson asked Representative Claman to comment on
the amendment.
Senator Claman did not support the amendment.
Co-Chair Olson discussed individuals that could not be
rehabilitated. He questioned how to stop the backup so that
there was no capacity in the dedicated beds.
Senator Claman identified that a key provision of the bill
was the ability for the courts to release people that were
being evaluated for competency in secured release on bail.
Instead of all individuals in custody through restoration,
the bill provided for more ability for custody to take
place not in the in-patient setting. There was testimony
that indicated there were efforts already to increase the
amounts of outpatient evaluation and restoration efforts,
which would relieve backup.
Co-Chair Olson WITHDREW his objection.
Senator Merrick OBJECTED to Amendment 1.
A roll call vote was taken on the motion.
IN FAVOR: Kiehl, Wilson, Hoffman, Olson
OPPOSED: Bishop, Merrick
The MOTION PASSED (4/2). Amendment 1 was ADOPTED.
Senator Wilson MOVED to WITHDRAW Conceptual Amendment 2,
33-LS0172\P.6 (Dunmire, 5/3/23). There being NO OBJECTION,
it was so ordered.
9:27:19 AM
AT EASE
9:28:02 AM
RECONVENED
Co-Chair Bishop MOVED to ADOPT Amendment 3, 33-LS0172\O.2
(Dunmire, 5/3/23).
Co-Chair Olson OBJECTED for discussion.
Senator Bishop explained that the previous day the
committee had heard testimony from the Department of Law
and the amendment provided for allowing a victim to attend
the hearing of an individual that had committed the crime.
Senator Kiehl asked if the amendment allowed for the victim
to have access to information beyond what was discussed in
court.
9:29:16 AM
AT EASE
9:29:19 AM
REONVENED
Senator Wilson relayed that he had discussed the topic of
the amendment with the Court System and the Department of
Family and Community Services. He thought that if Amendment
3 were to pass, a victim in a case could attend but court
proceedings would change to exclude certain information. He
cited that there could be a chance that a victim could
inadvertently be present during a breach of information and
should be aware of confidential medical information. He
supported the amendment with caution. He thought a victim
should have the right to attend a trial but had concerns
about the respondent's right to privacy.
Senator Kiehl asked to hear from the sponsor.
Co-Chair Olson asked the sponsor to comment.
Senator Claman relayed that he supported Amendment 3. He
thought a victim should be able to attend the hearing and
affirmed that it would be made apparent that it was a
closed hearing with confidential information that should
not be disclosed.
Senator Wilson wanted to ensure that people understood that
there was nothing in the bill that made the hearing
confidential.
Co-Chair Olson asked the sponsor to comment.
Senator Claman deferred to the Department of Law.
9:32:11 AM
STACIE KRALY, DIRECTOR, CIVIL DIVISION, DEPARTMENT OF LAW,
affirmed that a civil commitment hearing was confidential
under state law. She agreed with Senator Claman that if
individuals attended the hearing, they should be cautioned
and instructed about the confidential nature of the hearing
and maintain the confidentiality after the hearings.
Senator Wilson asked if the information should be put in
the bill. He shared concerns that confidential information
could be shared after a hearing.
Ms. Kraly thought a provision could be added to make it
clear that the hearings were confidential. She believed
that confidentiality was already part of the process. She
noted that when the Civil Division processed commitment
hearings, confidentiality was understood. She did not know
if an additional provision was necessary since the hearing
in and of itself and the entire statutory scheme was
rendered confidential. She assumed that if there was a
third party attending, the court would explain the
confidential nature of the proceedings.
Senator Bishop asked for Ms. Meade to comment.
Ms. Meade agreed with Ms. Kraly that hearings were
generally confidential. She thought that the victim's
attendance was one exception and trusted that a judge would
convey to those present that confidentiality must be
maintained. She believed the caution from the judge would
be routinely given.
Senator Claman conveyed that the structure of closed
hearings was that the judges assistant closed and locked
the doors, and a victim would be aware that it was a closed
proceeding.
Co-Chair Olson asked for Senator Clamans stance on the
amendment.
Senator Claman supported the amendment without change.
Co-Chair Olson WITHDREW his objection. There being NO
further OBJECTION, it was so ordered. Amendment 3 was
ADOPTED.
9:35:34 AM
Senator Wilson MOVED to ADOPT Amendment 4, 33-LS0172\O.4
(Dunmire, 5/3/23).
Co-Chair Olson OBJECTED for discussion.
Senator Wilson spoke to Amendment 4. He considered that the
committee had heard from the Department of Law, the Court
System, and the sponsor that there was currently a problem
in the system. He thought everyone agreed that after
someone was found incompetent, no one filed for a
continuation of an evaluation. The amendment left in place
to allow for the prosecuting attorney to mandate a filing
and included the previous amendment. He thought the
committee had heard from API that it would need funding in
the future to address capacity. He contended that the
amendment tried to keep a one tier system. The amendment
would return the commitment process to a 180-day cycle.
Co-Chair Olson WITHDREW his OBJECTION.
9:37:27 AM
Senator Kiehl OBJECTED.
Senator Kiehl MAINTAINED his objection.
Senator Claman did not support the amendment, which he
thought changed a key part of the legislation. He furthered
that part of the bill required the prosecution to file the
petition for involuntary commitment, but had the person
held for 3 days and started the 30-day commitment process.
He summarized that the proposed amendment would continue
the gap that currently existed in the system.
Senator Claman continued to speak to his objection. He
conveyed that part of the bill had specific provisions that
allowed for people to be bailed out if the court believed
the person could be out on bail while doing an evaluation
for competency and also restoration. He thought the
amendment would take out provisions that were intended to
relieve some of the pressure on the system for those being
evaluated for competency.
Senator Kiehl spoke to his objection. He expanded on the
bill sponsor's comments regarding the potential for out-
patient restoration of competency. He thought the
possibility of out-patient restoration had potential and
mentioned advances in medication. He mentioned improvement
in the backlog of individuals waiting in jail for
evaluation.
Senator Wilson MOVED to WITHDREW Amendment 4. There being
NO OBJECTION, it was so ordered.
Senator Kiehl MOVED to report CSSB 53(FIN) as amended out
of Committee with individual recommendations and the
accompanying fiscal notes.
Senator Wilson OBJECTED for discussion. He felt the bill
was a good piece of legislation that would fix an
established problem but considered that the bill would
cause a myriad of legal challenges within the disability
community. He thought there would be imbalances in how
systems were handled.
Senator Wilson WITHDREW his objection. There being NO
further OBJECTION, it was so ordered.
CSSB 53 (FIN) was REPORTED out of committee with three "do
pass" recommendations and with one no recommendation
recommendation and with two amend recommendations, and
with one new zero fiscal note from the Department of Family
and Community Services, one new fiscal impact note from the
Department of Law, one new zero fiscal note from the
Judiciary, and two previously published fiscal impact
notes: FN3 (ADM), FN 5 (ADM).
9:41:06 AM
AT EASE
9:43:39 AM
RECONVENED
SENATE BILL NO. 89
"An Act relating to tobacco, tobacco products,
electronic smoking products, nicotine, and products
containing nicotine; raising the minimum age to
purchase, sell, exchange, or possess tobacco, a
product containing nicotine, or an electronic smoking
product; relating to the taxation of electronic
smoking products and vapor products; and providing for
an effective date."
9:43:39 AM
Co-Chair Olson relayed that it was the first hearing for SB
89.
9:44:09 AM
SENATOR GARY STEVENS, SPONSOR, explained the purpose of the
legislation. He said that the bill would restrict the sale
and possession of nicotine products to the youth of Alaska.
He stressed that tobacco companies were advertising to
young people in new and seductive ways that disregard the
health dangers of their product.
9:45:45 AM
TIM LAMKIN, STAFF, SENATOR GARY STEVENS, noted that the
legislation had passed the previous year and had been
vetoed by the governor. He discussed the emergence of e-
cigarettes on the market. He lamented the popularity and
availability of e-cigarettes, which heated liquid to create
aerosol to inhale containing nicotine flavorings and
additives.
Co-Chair Olson appreciated the efforts of the sponsor.
Mr. Lamkin discussed a presentation entitled "Senate Bill
89 - Restricting Youth Access To Tobacco and E-Cigarettes"
(copy on file). He looked at slide 2, "E-Cigarette
Marketing, and discussed manufacturers use of traditional
un-regulated marketing techniques to secure product sales.
Mr. Lamkin showed slide 3, "Social Media -
Instagram/Twitter/Youtube," and explained that e-cigarette
brands used social media to promote products. He mentioned
competitions involving e-cigarette use. He suggested that
the messaging promoted the idea that e-cigarettes were safe
for use.
Mr. Lamkin spoke to slide 4, "Recent Confiscations," that
showed three photographs of devices that had been
confiscated recently from a school in Anchorage. He
discussed the prevalence of the products.
Mr. Lamkin showed slide 5, which showed a variety of
disposable vaping products with details on usage.
Mr. Lamkin addressed slide 6, which showed photographs of
e-cigarette products compared with cigarettes. He
referenced traditional tobacco cigarette prices.
9:50:13 AM
Mr. Lamkin referenced slide 7, which pertained to the
"Waxman hearings," in which tobacco companies had testified
that cigarettes were not harmful to health. He thought
there was general agreement that e-cigarettes could help
with smoking cessation and were less toxic than traditional
tobacco products, but he thought there should not be an
assumption that use of e-cigarettes was not toxic.
Mr. Lamkin argued that e-cigarettes did not end addiction,
but rather extended addiction. He thought there would be
testimony that claimed the benefits of e-cigarettes in
smoking cessation. He mentioned e-cigarettes and the
military. He cited a news article (copy on file) that
indicated that the company Juul had reached a settlement of
$462 million being paid to six states for claiming its
products were safe. He cited an informal poll of over 500
schools in the state which indicated that the products were
pervasive in Alaska schools.
Co-Chair Olson asked about the $462 million was a judgement
or a settlement.
Mr. Lamkin informed that the funds were part of a
settlement.
Co-Chair Olson thought the settlement was a significant
amount.
9:53:45 AM
Mr. Lamkin addressed a Sectional Analysis (copy on file):
SECTIONAL ANALYSIS
(version U)
Sec. 1: AS 11.76.100(a), relating to cigarette sales,
makes it a violation to sell to persons under age 21;
however the person making the sale at a licensed
location may be age 19 or older.
Sec. 2: AS 11.76.100(b), relating to supervision of
tobacco product vending machines (TVM), amends the
exemption for TVMs situated in a private break room,
provided there is signage posted indicating the
minimum age to possess tobacco products is age 21
(from 19).
Sec. 3: AS 11.76.105, (a) relating to possession of
tobacco, electronic smoking products (ESPs), or
products containing nicotine, raises the minimum age
to possess from 19 to 21 years of age; removes the
exemption for incarcerated minors;
(b) makes allowable exemptions as an affirmative
defense for possession under certain conditions; to
include if the product is FDA-approved, is prescribed
by a doctor, and given by a parent or legal guardian.
and
(c) makes possession a violation punishable by a fine
not to exceed $150, or in lieu of paying a fine the
court may direct a defendant to take an educational
class on the harms of smoking.
Sec. 4: AS 11.76.105 (d) Directs the court system to
establish a bail schedule for the fine referenced in
Section 3 above, for amounts that may be forfeited
without court appearance; and
(e) provides an exemption for persons age 19-20, when
selling tobacco, nicotine products, or ESPs, to be
exempted from the prohibition of underage possession
of those products.
Sec. 5: AS 11.76.106(a) prohibits the direct sale of
ESPs over the Internet to private consumers, with
exceptions provided in the next section.
Sec. 6: AS 11.76.106(b), relating to the 'behind the
counter' control provisions of selling tobacco
products, allowing exemptions for wholesalers, tobacco
shops or online sales, raising the minimum, age to
sell from 19 to 21 years of age.
Sec. 7: AS 11.76.109(a), relating to other products
containing nicotine (OTP), including chew, gum,
patches, or E-cigarette products, makes it a violation
to sell to persons under age 21; however the person
making the sale at a licensed location may be age 19
or older.
Sec. 8: AS 11.76.109(b), relating to exemptions to
selling products containing nicotine to persons under
the age of 21, if the product is FDA-approved, is
prescribed by a doctor, and given by a parent or legal
guardian.
Sec. 9: AS 11.76.109(d), relating to the requirement
for vendors to supervise the operation of ESP or
nicotine product vending machines (EVM), amends the
exemption for EVMs situated in a private break room,
provided there is signage posted indicating the
minimum age to possess tobacco products is age 21
(from 19).
Sec. 10: AS 11.76.109(g), relating to the penalty for
selling or gifting ESP or nicotine products to a
person under the age of 21 as a violation punishable
by a fine of not less than $300.
Sec. 11: AS 11.81.900(b) adds a definition of
nicotine, to include a chemical or chemical compound
intended to simulate the effect of the plant-based
chemical derived from the tobacco plant. This is
intended to include the emergence of synthetic
nicotine in the market as a means of evading tax and
sales penalties.
Sec. 12: AS 43.50.070(a), relating to licensing
requirements for buying or selling tobacco or other
products containing nicotine, adds legal authority for
the Dept. of Revenue to suspend, revoke a license for
ESP sales.
9:58:22 AM
Mr. Lamkin continued to address the Sectional Analysis:
Sec. 13: AS 43.50.105(b), relating to wholesale
cigarette sales and licensees, to restrict licensees
from selling or transporting tobacco products to
persons that are at least 21 (from 19) years of age,
and to implement an age verification process when
conducting transactions.
Sec. 14: AS 43.50.105(c), relating to common carrier
transportation of cigarettes, to verify the age (21)
of the recipient before delivery.
Sec. 15: AS 43.50.150(c), relating to the state being
in partnership with municipalities in taxing tobacco
products, is amended to include those municipalities
taxing ESPs, to share data and jointly audit licensees
selling those products.
Sec. 16: AS 43.50.325 adds a restriction on the
transportation of OTP into the state, requiring
licensing to do so, and makes clear provisions for age
verification for delivery of and labelling for such
products. This is a conforming amendment, replicating
AS 43.50.105, which applies only to cigarettes.
Sec. 17: AS 43.50 is amended by adding Article 8,
relating to ESP Sales, Shipping, Licensing, and
Taxation
AS 43.50.850 levies a 25% tax on the retail sales
price of closed-system ESPs and vapor products in the
state.
AS 43.50.855 provides for exemptions from the tax to
include closed ESPs or vapor sold on military bases,
approved by the FDA as a tobacco cessation product, or
sold as a marijuana or hemp product.
AS 43.50.860 requires retailers to be licensed in the
state to sell ESPs, details an annual application
renewal process and fee, license transferability,
suspension and revocation, product packaging and
labelling requirements, and restrictions on marketing
flavored products to youths.
AS 43.50.865 requires ESP licensees to file a monthly
tax return to the Dept. of Revenue (DOR), including
information on what was sold, sales prices, and tax
imposed.
AS 43.50.870, requires record keeping for licensees
selling ESPs, including information on purchase
prices, product sources, and volume of purchase. This
information is to be kept on file for 3 years and kept
confidential by the DOR.
AS 43.50.875 directs taxes collected on ESPs to be
accounted for separately and that the tax revenue may
be appropriated by the legislature to provide for
educational programs in health care and research,
advertising related to the hazards of ESPs, and for
relief to schools in administering health programs and
installation of ESP detection devices.
AS 43.50.880 is a conforming amendment, adding
restrictions to shipping or transporting ESPs into the
state without a license, consistent with same statutes
relating to shipping or transporting tobacco or
cigarettes.
AS 43.50.885 places restrictions on ESP vapor products
to include:
1. a nicotine concentration of no more than 60mg/ml;
2. protection from breakage and leakage;
3. not containing other additives or stimulants such
as caffeine, taurine, or vitamin E acetate;
4. child- and tamper-proof packaging
5. clear labeling to inform customers of all
ingredients and nicotine content.
AS 43.50.900 provides a definition for "sales price"
for tax purposes
AS 43.50.990 provides definitions for "closed
electronic smoking product," "electronic smoking
product," "vapor product," "nicotine," and "retailer."
Hardware components such as batteries, battery
chargers, heating elements and mouthpieces are
excluded from the definition of an ESP for tax
purposes, when sold separately or not part of a closed
ESP.
Sec. 18: AS 43.70.075(f), relating to business license
endorsements for selling tobacco products, amends the
existing requirement for signage to be posted on
vendor premises, stating it being illegal to sell
tobacco or ESPs to minors under the age of 21 (from
19).
Sec. 19: AS 43.70.075(m), relating to the process for
suspending business licensees holding a tobacco
endorsement, amends existing statute referring to
tobacco or ESPs being sold to minors under the age of
21 (from 19).
Sec. 20: AS 43.70.075(t), relating to penalties for
licensees violating the T21 laws, amends existing
statute for lessening the penalties if a license
holder has a written tobacco or ESPs sales policy to
include employees not selling tobacco or ESPs to
minors under the age of 21 (from 19).
Sec. 21: AS 43.70.075(w), relating to the appeal and
administrative process of license suspension, conforms
existing law regarding tobacco and ESP sales, to apply
to sales to minors under the age of 21 (from 19).
Sec. 22: AS 45.50.471(b), relating to consumer
protection and unlawful business practices, adds a new
subsection making it unlawful to market or advertise
ESPs to persons under the age of 21 in the state. This
is a conforming change consistent with unlawful
marketing referenced in Section 18 above.
Sec. 23: AS 47.12.030(b), relating to the juvenile
justice system, and minors accused of possessing
tobacco, conforms existing law to apply to possession
by minors under the age of 21 (from 19).
Sec. 24: AS 11.76.100(e), relating to sales, gifting
and possession exemptions for incarcerated persons,
and AS 11.76.106(b)(4), allowing internet sales of ESP
products to unlicensed consumers, are both repealed.
Sec. 25: Relates to applicability, conforming changes
in the bill.
Sec. 26: Applies an effective date of January 1, 2024.
10:03:26 AM
Co-Chair Olson recognized that Co-Chair Stedman had joined
the meeting.
Senator Kiehl asked about making the tickets available. He
asked if the bill signified that if a minor received a
ticket, the parents would not know.
Senator Stevens thought Senator Kiehl asked an important
question.
Mr. Lamkin relayed that currently there was a mandatory
court appearance in place. He agreed that a ticket could be
issued to a minor, and the minor could withhold the
information from the minors parents. He noted that there
was a representative from the courts that could more
definitively address the issue.
Senator Stevens reiterated that Senator Kiehl had brought
up an important issue and stated he would be amenable to
making a change to the bill.
Senator Kiehl agreed to follow up with the sponsor at a
later time.
10:05:12 AM
SHAWN ARNOLD, PRINCIPAL, THUNDER MOUNTAIN HIGH SCHOOL,
JUNEAU, spoke in support of the bill. He thought the bill
was an important step to help children become nicotine-
free. He cited the rise in tobacco use in teens. He cited
that in the past three to four years he had begun to see e-
cigarette use and vaping. He estimated that in his school
of 600 students, about 25 percent had tried vaping or used
vaping on a regular basis. He noted that the behavior had
been witnessed primarily in younger students aged 14 to 16,
that smoked nicotine cartridges in fruit flavors. He
thought vaping was becoming so addictive that students used
it in all areas of the school.
Mr. Arnold continued his testimony and reported students
often considered e-cigarettes to be harmless or were
addicted. He noted that students often turned in vaping
devices. He had confiscated at least 70 devices in the
current year. He described behaviors by which students
obtained vaping devices. He thought the products were often
purchased by an older sibling, obtained from other students
on campus, purchased, occasionally purchased online, or
even provided at times by a parent. He thought a low-end
device was priced at $20 and sold to other students for
$40. He discussed a sophisticated exchange system involving
coordination over social media. He thought often there were
adults involved. He described devices as becoming smaller
and more difficult to identify. He noted that Thunder
Mountain High School had revamped its efforts to share the
dangers of vaping. He noted that a Juneau ordinance did
exist that resulted in a citation for underage possession.
10:10:05 AM
Mr. Arnold discussed the school discipline measures
involved with e-cigarette and tobacco use. Finding a device
resulted in notification of law enforcement. He lamented a
lack of accountability. He shared an example of the devices
he had confiscated in the previous two weeks.
Senator Wilson wondered if students were buying $200 vaping
devices and how the proposed tax might impact buying the
devices.
Mr. Arnold thought the tax might be a deterrent. He hoped
that some of the taxes collected would go towards helping
communities with tobacco cessation.
10:12:27 AM
Senator Kiehl asked if Mr. Arnold was spending any funds on
detection devices. He did not think there were any at
Juneau Douglas High School.
Mr. Arnold affirmed that there were no detection devices in
the Juneau School District. He cited that the average cost
of what was on the market was about $1,200 per device. He
referenced conversations with other Alaskan principals that
had installed detection devices. He commented on students
finding ways to circumvent detection by devices. He noted
that there were online YouTube devices that showed methods
for foiling detection. He recounted that in Anchorage, the
devices were sending so many alerts that it was time-
prohibitive for administrators to handle.
Senator Kiehl discussed educational impacts such as smoke-
filled bathrooms. He asked Mr. Arnold to quantify what
educational resources were being diverted.
Mr. Arnold listed time and staffing as impacted resources
and mentioned schools that had engaged staff in signing
students in and out of bathrooms. He discussed time taken
from lesson planning and instruction. He cited an impact on
student athletics, as vaping counted as a violation. He
discussed lost student potential.
10:16:22 AM
KAREN BLOXSOM, ASSISTANT PRINCIPAL, WASILLA HIGH SCHOOL
(via teleconference), spoke in support of the bill. She was
passionate about keeping students safe. She cited that 75
percent of the current years disciplinary issues at
Wasilla High School (WHS) were related to vaping. She
recounted doing a medical lock-down of her school after two
separate students had overdosed on vaping products laced
with other toxic illegal chemicals. She relayed that vaping
was affecting WHS athletes. She noted that the problem
existed primarily with younger students, and that 90
percent of students caught with vapes were freshman. She
echoed Mr. Arnolds description of how students accessed
the materials.
Ms. Bloxsom continued her remarks, and cited that vaping
was increasing and students were beginning to vape in
middle school and were addicted by the time they got to
high school. She mentioned sophomores with as many as three
vaping infractions. She described progressive discipline
for possession of tobacco products.
10:19:48 AM
Ms. Bloxsom continued to discuss the penalties for vaping.
She discussed fines up to and over $500, and a third
infraction consequences including 10 days suspension. She
discussed vape detection and the associated costs. She
supported raising the age to buy or possess vaping products
to 21. She emphasized that the issue was taking away from
important educational time. She thought the revenue from
fines could be used for cessation and education.
Senator Wilson asked how many detection devices Ms. Bloxsom
would put into WHS if money was not an object.
Ms. Bloxsom estimated that 12 devices would be needed for
WHS.
Senator Wilson estimated that it would take about two and a
half years to fund the devices.
10:23:03 AM
JOE DARNELL, CHIEF INVESTIGATOR, TOBACCO ENFORCEMENT AND
YOUTH EDUCATION, DEPARTMENT OF HEALTH (via teleconference),
thought the previous testifiers had illustrated the problem
well. He noted that the federal age requirements for
purchasing tobacco and nicotine products was 21, while for
the state it was currently 19. He discussed enforcement by
the federal government. He thought raising the statewide
age requirement to 21 would make for a fair playing field
for merchants. He discussed fines and noted that the bill
proposed to lower the maximum fine and provided
alternatives.
10:26:00 AM
Senator Kiehl asked if Mr. Darnell could discuss the
provisions that did not line up the age to buy vaping
products with the age to sell vaping products.
Mr. Darnell saw the age difference (of selling legally at
19 opposed to purchasing at 21) as problematic. He
understood the rationale for the age of sellers to be 19 to
promote job opportunities. He thought the best practice was
to extend the age far enough to break the social connection
with sellers being close in age to high school students.
10:28:05 AM
KATIE STEFFENS, DEPUTY PROGRAM MANAGER, TOBACCO PREVENTION
AND CONTROL, DEPARTMENT OF HEALTH (via teleconference),
introduced herself and relayed that she was available for
questions.
Co-Chair Olson asked about educational programs that were
available for educating parents and children about the
risks of tobacco and nicotine use.
Ms. Steffens cited that the Department of Health had 21
grantees under the Tobacco Prevention and Control Program,
19 of which currently worked with schools on policies and
programs. She noted that DOH also had a contract with the
American Lung Association, which had developed a successful
educational program piloted in Alaska. She mentioned a
program through the Food and Drug Administration that was
free and offered online.
Co-Chair Olson asked if Ms. Steffens had data pertaining to
tobacco use and vaping to show if usage was on the rise.
Ms. Steffens relayed that collaboration with the Department
of Education and Early Development, DOH was monitoring
school suspensions. She mentioned the difficulty in
collecting day. In the 2016-16 school year there were 414
school suspensions related to tobacco use or possession
(including e-cigarettes), and since that time the number of
suspensions had increased 232 percent. In the 2021-22
school year, there were 964 suspensions. The suspensions
were found in all grades.
Co-Chair Olson noted that there were seven zero fiscal
notes and one fiscal impact note.
10:31:42 AM
BRANDON SPANOS, DEPUTY DIRECTOR, TAX DIVISION, DEPARTMENT
OF REVENUE (via teleconference), introduced himself.
10:32:14 AM
AT EASE
10:33:01 AM
RECONVENED
Mr. Spanos addressed FN 5 from the Department of Revenue,
OMB Component 2476. There was no revenue impact for the
change in age from 19 to 21. The department estimated the
25 percent tax for closed electronic smoking products and
vapor products in the state would generate an additional
$3.39 million in FY 24, growing slightly in future years
due to market and population growth. The estimation assumed
no inflation. The bill designated the purpose for the tax
profits to be healthcare, health programs, education
programs, and advertising related to hazards of electronic
smoking products. The department had put the revenue under
a temporary designation with a General Fund code.
Mr. Spanos read from the fiscal note analysis on page 2:
The Department estimates that license fees would
generate an additional $70.4 thousand in unrestricted
general fund revenue. Implementation Cost This fiscal
note reflects a higher implementation cost than
similar bills introduced in past sessions seeking to
tax ESPs. The reason is that past bills would have
broadened the existing tax on "Other Tobacco Products"
(OTP) which are taxed at the wholesale level. This
bill creates a new tax at the retail level. Broadening
the OTP tax to include ESPs would require only small
changes to the Department's systems to implement the
tax. This fiscal note reflects the costs to stand up a
new tax which would require developing a new module in
our Tax Revenue Management System (TRMS). Two new
positions are required, a Tax Auditor 2 and a Tax
Technician 2, to run the licensing, return processing,
auditing, and customer service functions of the
program since the bill would create a new taxpayer
base. The staff would have an enforcement function
requiring travel. Services costs include annual
overhead for facilities rent and department and
statewide core service rates. Commodity costs include
a one-time cubicle buildout for the two new positions
and required equipment. Out years are reduced to
annual office supply costs.
The Department will need to engage FAST Enterprises,
our TRMS contractor, to develop a retail ESP module,
including a license function, into TRMS and integrate
the module with our existing imaging, accounting, and
collections modules. The $500.0 in FY2023 supplemental
costs is an estimate for the needed contract with FAST
Enterprises to develop the new tax module by the end
of the fiscal year.
10:36:29 AM
Senator Wilson asked about the last paragraph of the note
and did not see the additional $500,000 cost in the fiscal
notes.
Mr. Spanos noted that the $500,000 was reflected on page 1
of the fiscal note for estimated supplemental FY 23 costs.
Senator Wilson asked how many retailers the tax would apply
to in the state, and if the proposed staff additions would
be sufficient.
Mr. Spanos did not recall a precise number, and estimated
there would be hundreds of retailers. He noted that the two
new employees would be part of the departments excise
group, which was a larger group which would absorb many of
the duties.
Senator Wilson thought he could count hundreds of retailers
in the Mat-Su area alone, and wondered if there would be
thousands.
Mr. Spanos affirmed that the department would get back to
Senator Wilson with the information. He discussed methods
of estimating the numbers.
10:39:07 AM
SYLVAN ROBB, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, cited that in FY 22
there were 1,654 business license endorsements to sell
tobacco products.
Senator Wilson asked if the number represented all stores.
Ms. Robb identified that each individual location that sold
tobacco required its own tobacco endorsement.
Senator Kiehl asked if one would need to file two tax
returns if an establishment sold leaf tobacco products
(like cigars) and also the e-cigarette products.
Mr. Spanos relayed that the current tobacco product tax was
paid at the wholesale level, and distributors filed the
return and paid the tax.
Senator Kiehl queried if Mr. Spanos' division had enough
auditors to handle the online sellers. He mentioned a
consortium doing online sales.
Mr. Spanos did not believe that the current bill language
had a tax on online sales. He thought the question could
better be directed at the sponsor. He thought the
department had the experience to audit online sales.
Mr. Lamkin relayed that as the bill was currently written
there was an outright ban on sales of e-cigarette products.
He relayed that the sponsor was interested in revisiting
the topics provided there was age verification and tax
levied.
Senator Kiehl considered that whether the ban remained or
not, he thought Mr. Spanos section would still need to do
some auditing.
Mr. Lamkin deferred to the tax division and noted that
there was language available to make online filing
possible.
Senator Wilson addressed the issue of online sales, and
asked if it was currently illegal to mail e-cigarette
products.
Mr. Lamkin relayed that there were currently no
restrictions.
Senator Wilson asked if SB 89 banned all carrier services
from carrying e-cigarette components. He asked if it was
possible to have someone out of state mail the components
if it was not a sale.
Mr. Lamkin answered affirmatively.
10:43:48 AM
Co-Chair Olson OPENED public testimony.
10:43:57 AM
CARRIE NYSSEN, AMERICAN LUNG ASSOCIATION, VANCOUVER,
WASHINGTON (via teleconference), spoke in support of the
bill. She asserted that tobacco use almost always began in
childhood or adolescence. She cited that in Alaska 1 out of
14 high school students were active users of e-cigarettes.
She referenced an article published by the American Academy
of Pediatrics that cited several evidence-based policy
recommendations, including increasing tobacco and nicotine
prices. She discussed the adverse effects of nicotine and
flavor additives.
10:45:27 AM
JOE O'CONNOR, DIRECTOR OF TOBACCO, HOLIDAY COMPANIES, ST.
PAUL, MINNESOTA (via teleconference), testified in
opposition to the bill. He asserted that responsible
retailers did not sell to youth. He emphasized the issue of
youth prevention and employee training. He agreed with much
of the previous testimony but thought the bill addressed
the wrong area. He did not want retailers to be penalized.
10:46:43 AM
DAVID PARROTT, SELF, SOLDOTNA (via teleconference), spoke
in opposition to the bill. He considered that the tax on
retailers was an increase that would punish adults for the
actions of youth. He discussed vaping and the reduced
amount of nicotine consumed.
10:48:07 AM
ALEX MCDONALD, SELF, FAIRBANKS (via teleconference),
testified in opposition to the bill. He noted that previous
testifiers had not indicated that youth were obtaining e-
cigarettes from retailers. He did not think the retail tax
would deter youth. He thought retailers would have to file
two tax returns because there were no distribution centers
in the state to pay the tax and retailers ordered straight
from companies. He did not understand the additional
license requirements. He discussed product shipping.
10:49:40 AM
JUNE ROGERS, SELF, FAIRBANKS (via teleconference), spoke in
support of the bill. She expressed gratitude to the
sponsor. She encouraged the committee to support the bill,
which supported a healthy community. She recounted
contacting legislators regarding tobacco use. She shared
that her brother had passed away from cancer.
10:51:09 AM
ALYSSA KEILL, SELF, FAIRBANKS (via teleconference),
testified in support of the bill. She was a part-time
swimming coach that worked with students ages 11 to 14. Her
student athletes had indicated that vaping products were
easy to obtain and were in use by student athletes.
10:52:12 AM
JENNIFER CHIKOYAK, SELF, KENAI (via teleconference), spoke
in support of the bill. She worked with school districts in
the state on the issue of tobacco use and described the
districts as being in crisis. She encouraged the committee
to support the bill.
10:52:47 AM
ELIZABETH RIPLEY, PRESIDENT AND CEO, MAT-SU HEALTH
FOUNDATION, WASILLA (via teleconference), testified in
support of the bill. She cited that most tobacco use
started before the age of 18 before the brain was fully
developed. She cited the 2019 Youth Risk Behavior Survey,
which indicated that 31.8 percent of traditional high
school students and 49.9 percent of alternative high school
students currently vaped. Over 50 percent of traditional
Mat-Su high schoolers, and 71 percent of alternative high
schoolers had tried e-cigarettes. She thought the state
needed to align itself with federal law and tax tobacco
products and protect the youth of the state.
10:54:07 AM
TABITHA BLADES, SELF, SOLDOTNA (via teleconference),
testified in support of the bill. She relayed that she was
an assistant principal on the Kenai Peninsula. She thought
most school policies supported out-of-school suspension for
students that obtained e-cigarettes from adults. She
emphasized that there was no benefit to the suspension. She
asked the committee to support the bill.
10:55:28 AM
EMILY NENON, AMERICAN CANCER SOCIETY, CANCER ACTION
NETWORK, ANCHORAGE (via teleconference), spoke in support
of the bill. She referenced page 12, line 15 of the bill,
regarding the disposition of proceeds. She appreciated the
effort to get some projected revenues going towards tobacco
and e-cigarette prevention work. She suggested that the
easiest way to make sure that the revenues went towards
comprehensive evidence-based interventions was to put them
into the Tobacco Use Education Cessation Fund, which had
been a designated fund for over 20 years.
10:56:31 AM
JESSI WALTON, SELF, FAIRBANKS (via teleconference), spoke
in opposition to the bill. She discussed smoking as an
adolescent. She recounted trading for cigarettes as a
teenager. She did not think the bill provisions would
result in prevention.
10:57:15 AM
PATRICIA PATTERSON, SELF, KENAI PENINSULA (via
teleconference), supported the bill with two changes. She
thought the tax needed to be on a wholesale level. The
second change she supported would allow adults 19 and 20 to
be able to sell the product. She understood the rationale
for raising the age to 21, but thought it was unnecessary
to cause adults to lose their jobs.
10:58:34 AM
VIKKI JO KENNEDY, SELF, JUNEAU (via teleconference),
testified in support of the bill. She professed to being a
53-year cigarette smoker. She emphasized that e-cigarettes
were geared towards children. She emphasized that it was
appropriate to raise the age required to sell e-cigarettes.
She adamantly supported the bill.
10:59:56 AM
MEGAN BOELTER, PREVENTING TOBACCO ADDICTION FOUNDATION, NEW
MEXICO (via teleconference), spoke in support of the bill.
She explained that she worked in tobacco prevention and had
worked with various states and agencies. She cited that
Alaska was one of 11 states that did not have a law
requiring a person be 21 years of age to sell the
production. She discussed predatory marketing. She
emphasized that SB 89 was aligned with federal law.
11:01:17 AM
SCHELL HAMMEL, SMOKE FREE ALTERNATIVE TRADE ASSOCIATION,
TEXAS (via teleconference), testified in opposition to the
bill. She cited that while she supported the bill, she had
concerns that many youths received the products from
adults. She cited that FDA compliance data showed that
referenced inspection of stores with vapor products. She
discussed placing products in age-restricted stores.
SB 89 was HEARD and HELD in committee for further
consideration.
Co-Chair Olson relayed that SB 133 would be heard at a
later time.
11:03:03 AM
AT EASE
11:03:18 AM
RECONVENED
Co-Chair Olson discussed the agenda for the afternoon
meeting.
ADJOURNMENT
11:03:35 AM
The meeting was adjourned at 11:03 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 133 FUND CAP 050223.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 133 |
| SB 133 FUND XFER 050223.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 133 |
| SB133 Sectional Analysis 04.24.23.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 133 |
| SB133 Transmittal Letter 04.20.23.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 133 |
| SB 53 Amendment 4 Wilson.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 53 |
| SB133 Presentation to S.FIN 05.04.23.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 133 |
| SB 89 Support McDonald.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 89 |
| SB 133 Opioids Testimony - AML.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 133 |
| SB 133 Testimony Dunne.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 133 |
| SB 89 Public Testimony Boelter.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 89 |
| SB 89 AK_Testimony_Oppose_SB89_Vape Tax_Senate Finance PDF.pdf |
SFIN 5/4/2023 9:00:00 AM |
SB 89 |