Legislature(2015 - 2016)BELTZ 105 (TSBldg)
02/16/2016 06:00 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB133 | |
| SB131 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 131 | TELECONFERENCED | |
| += | SB 133 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 133-ELECTRNC TAX RETURNS;TOBACCO & E-CIGS TAX
CHAIR COSTELLO announced the committee would hear public
testimony on SB 133.
6:02:53 PM
JACKSON BLACKWELL, high school student representing the American
Cancer Society Cancer Action Network (ASC CAN), testified in
support of SB 133. He reported that he has been involved in
tobacco prevention for three years and feels it is important to
do everything possible to protect the health of his peers by
keeping electronic cigarettes out of their hands. He related
that when he returned after spending six months serving as a
U.S. page in Washington, D.C., he saw that the use of e-
cigarettes and vapes had skyrocketed. He concluded saying the
tobacco tax would be beneficial because it would make e-
cigarettes more difficult to acquire.
6:03:06 PM
SENATOR MEYER joined the committee.
JOSEPH YOULKOSKI, eighth grade student representing the American
Cancer Society Cancer Action Network (ASC CAN), testified in
support of SB 133. He said the increased tobacco tax would make
it harder for middle school students to get vapor and e-
cigarettes. It will keep the state healthier and generate
revenue.
SENATOR STEVENS asked if anyone uses e-cigarettes to stop an
addiction to combustible cigarettes.
MR. BLACKWELL replied some people use them as a means to quit
smoking, but his perspective is that it creates an addiction to
something else. He pointed out that e-cigarettes are not
regulated so people could still be buying a nicotine product
without knowing it. He reiterated that they shouldn't be readily
available for anyone to use.
6:06:28 PM
SENATOR MEYER asked what the tobacco of choice is in schools now
days.
MR. BLACKWELL replied he primarily sees the use of vapes, e-
cigarettes and chewing tobacco, often by students he would not
expect.
6:07:27 PM
MR. YOULKOSKI said kids have been educated through programs like
DARE that nicotine products are harmful so they've switched to
e-cigarettes and vapes. Those claim to be tobacco and nicotine
free and he wonders what they do contain.
SENATOR MEYER commented on the problem in Anchorage with Spice
and the lack of package labeling. He asked the students if they
agree that that is part of the problem.
MR. BLACKWELL pointed out that some people are using vaping
devices to smoke hash oil and opioids, which presents a whole
new danger.
MR. YOULKOSKI added that his middle school doesn't have many
problems with Spice and he attributes it to good education from
teachers about its dangers.
6:08:43 PM
STEVEN MAPES, representing himself, Kenai, Alaska, asked the
committee to amend SB 133 to remove all vapor products from the
bill. He stated that he is speaking as an ex-smoker, former e-
cigarette user and current vape shop owner. He shared his story
of trying to kick the habit of smoking three packs of cigarettes
per day. The only thing that worked for him was e-cigarettes so
he decided to open a vape shop and help others get off tobacco.
He described the success of his business and the fact that he
has been able to help hundreds of people to stop using tobacco
products. Increasing the tax on tobacco as proposed would put
him out of business and drive the market to the Internet.
6:11:44 PM
At ease
6:12:25 PM
CHAIR COSTELLO reconvened the meeting.
PATRICIA PATTERSON, Lucky Raven Tobacco, Kenai, Alaska,
testified in opposition to SB 133. She said there is no federal
or state law that prohibits an Alaskan from buying pipe tobacco,
cigars or vape products online, and the 75 percent state tax
isn't levied on those sales. That is her competitor. She pointed
out that there are just three humidors left in the state and
increasing the 75 percent tax to 100 percent will get rid of all
three. She opined that the current 75 percent tax has done
nothing but move business to other states. She posited that the
same thing will happen to in-state e-cigarette and vape shops if
those products are included in the tax scheme. The revenue the
state would gain is insignificant compared to the damage it will
do to local economies throughout the state.
6:14:48 PM
LARRY HACKENMILLER, representing himself, Fairbanks, Alaska,
testified in opposition to SB 133. He stated total opposition to
taxing electronic smoking devices, maintaining that they have
nothing to do with cigarettes or tobacco products. He said no
concrete research shows hazards associated with the use of this
device or its benefit as a means to quit smoking tobacco. He
also requested the committee remove the requirement to file tax
forms electronically and instead state it is the preferred
method.
CHARLES RIVERUP, representing himself, Fairbanks, Alaska,
testified in opposition to SB 133. He offered his belief that
vape products are not tobacco and should not be taxed as such.
He and others purchase their vape products locally and the
proposed tax would send this business outside the state. "That
doesn't seem logical to me," he said.
6:18:34 PM
ANGELA CARROL, Smoke Free Alternative Trade Association,
Wasilla, Alaska, requested the committee amend SB 133 to remove
all vapor products from the bill. She referred to reports in the
bill packets from the Mayo Clinic and Public Health England that
discuss how vapor products benefit adults addicted to
cigarettes. She pointed out that the proposed tax on these
products would bring the tax on vapor products from zero to 100
percent overnight, which will be a huge burden to the consumer.
She maintained that the proposed tax will drive consumers back
to combustible cigarettes, deter a current smoker from switching
to a vapor product or drive sales to the Internet. This won't be
good for the economy or selective businesses in Alaska.
6:21:04 PM
KAREN PERDUE, representing herself, Fairbanks, Alaska, said she
is retired and working with the American Cancer Society Alaska
Cancer Action Network, and is speaking in support of SB 133. She
informed the committee that she was involved in the 1997 initial
tobacco tax increase when an amazing bi-partisan effort resulted
in Alaska having the highest tobacco tax in nation. The tax had
a dramatic effect on consumption; in particular, youth
consumption has gone down 70 percent since then. She asked the
committee to make sure that e-cigarettes are taxed to help
ensure that young people do not start using them. She
highlighted that current data shows that far more young people
are using those products than tobacco. Responding to a question,
she confirmed that this information is from the Behavioral Risk
Survey.
She said the track record is great for using the tobacco tax for
public health purposes rather than revenue purposes, and tobacco
advocates would like to see the additional tax focused on
reducing consumption.
MS. PERDUE said the use of e-cigarettes has exploded in the
Fairbanks community and it makes no sense to exclude them from
taxation. They're a medium for delivery of both tobacco and
marijuana and those products already are or will be taxed.
6:24:35 PM
SENATOR STEVENS mentioned a bill he introduced intended to keep
children from buying e-cigarettes. In the process, he learned
that a young person who is addicted to cigarettes can get a
prescription for e-cigarettes to help break the addiction. He
asked if this is a legitimate way to help people stop smoking
and, if so, why charge them more.
MS. PERDUE replied the policy is to tax tobacco and she views e-
cigarettes as a delivery mechanism for tobacco and other
products. She added that it's one thing if someone actually
quits using tobacco altogether but the nicotine levels in e-
cigarettes could be higher than a combustible cigarette because
they aren't currently regulated by the FDA.
6:26:35 PM
TERRENCE ROBBINS, representing himself, Ketchikan, Alaska,
testified in support of SB 133. He cited U.S. surgeon general
findings that every 7 percent increase in the retail price of
cigarettes will result in 7 percent reduction in youth smoking
rates. He also mentioned data from 2015 showing that 27.5
percent of Alaskans age 12-17 have used cigarettes or e-
cigarettes in the last 30 days. He said e-cigarettes are a
nicotine product and increasing their retail price will decrease
use rates among youths.
6:29:42 PM
DR. KRISTEN COX, ND, representing herself, Juneau, Alaska,
testified in support of SB 133. She said in 2014 the State of
Alaska collected $100 million between tobacco taxes and the
Tobacco Master Settlement Agreement. However, the costs
associated with smoking in Alaska totals $600 million. She
pointed out that these costs equate to $20 per pack of
cigarettes which arguably means the state is essentially
subsidizing the tobacco industry. Clearly, increasing the cost
of cigarettes decreases use rates in youths, she said. Even
Phillip Morris recognized this in a 1988 statement.
CHAIR COSTELLO asked Dr. Cox to provide the backup for the $600
million she cited.
DR. COX said the data came from the Department of Health and
Social Services data from the Tobacco Prevention and Control
Program. She offered to leave her copy.
6:32:23 PM
MARGE STONEKING, Executive Director, American Lung Association
in Alaska, Anchorage, Alaska, testified in support of SB 133.
Reading from prepared testimony she stated that tobacco taxes
are a proven method to reduce tobacco use and tobacco related
illnesses. Increasing these taxis also saves government and
businesses millions of dollars in tobacco-related healthcare
costs. She reported that increasing tobacco taxes 10 percent
reduces youth smoking by a minimum of 7 percent, reduces adult
smoking by 4 percent, and reduces pregnant women smoking by 7
percent. A vast majority of people who smoke want to quit and
the increased price is yet another incentive to quit. Thus, the
American Lung Association supports the proposal to increase the
price of cigarettes a minimum of $1 per pack and the equivalent
increase on other tobacco products, including electronic
cigarettes.
MS. STONEKING highlighted that there are seven approved products
for tobacco cessation and e-cigarettes are not one of them. In
fact, the tobacco industry sued the FDA to treat these devices
as a tobacco product, not as a cessation device. She also
suggested that e-cigarette venders should have a tobacco
endorsement so they'll be part of the state's underage
enforcement program.
6:36:12 PM
ISAAC HEWELL, owner, Cold Vapes 907, Anchorage, Alaska,
testified in opposition to SB 133. He listed his family run
business, employees, rent, insurance and ancillary businesses,
all of which would be affected if the bill were to pass and
become law. He described the bill as an unemployment bill for
the vaping industry in Alaska because it will drive sales to the
Internet. He maintained that an estimated 9 million smokers,
including himself, have switched from combustible tobacco
products to vaping. He urged the committee to hold the bill so
the state can continue to profit from his business as it does
now.
6:38:47 PM
JEFF FUHRMAN, representing himself, Anchorage, Alaska, testified
in opposition to SB 133. He shared personal stories about
cigarette smoking and lung cancer and related that he was
initially skeptical about vaping. However, he has not touched a
cigarette since he started to vape 3.5 years ago. He maintained
that the effect of SB 133 will be to close small businesses in
Alaska and drive the consumers to online sales. Furthermore, it
will make it more difficult for people like him to quit smoking.
It's reprehensible that the state is increasing the cost of a
device that is helping people quit and saving lives, he said.
6:42:02 PM
JASON JONES, owner, Legion Vapor, Anchorage, Alaska, testified
in opposition to SB 133. He related that after 17 years and
multiple failed attempts to stop smoking cigarettes, he turned
to vaporizers and was finally successful. That was three years
ago and he's still smoke free. Speaking as a vape shop owner, he
stressed that taxing vaporizer products will not create revenue
for the state because it will drive consumers to purchase
online. The result will be that the 20 locally-owned, family
vape shops in Alaska will be forced to close. An unintended
consequence is that it will remove the first line of defense in
keeping vaporizer products out of the hands of children.
6:43:40 PM
TOM LAKOSH, representing himself, Anchorage, Alaska, testified
in support of sin taxes and suggested adding the consumption and
production of fossil fuels to both SB 131 and SB 133. He also
described the proposed tax on vaping products as "quite a cost
to bear."
6:45:27 PM
SHEB GARFIELD, representing himself, Anchorage, Alaska,
testified in opposition to SB 133. He stated that after smoking
for 20 years, he's been cigarette-free for 3 years, and he owes
that healthy achievement to vaping. He stressed that the 100
percent wholesale tax will start a domino effect that will end
the cottage vaping industry in Alaska. Consumers will be forced
to shop online or go back to smoking. Either circumstance will
cause the 20 mom-and-pop vape shops in Alaska to cut employees
and eventually close. The State of Alaska is shooting itself in
the foot in its decision to tax vaping products when it's a
proven method for helping people to quit smoking, he said.
6:47:40 PM
GREGORY CONLEY, American Vaping Association, Medford, New
Jersey, testified in opposition to SB 133. He related that he is
an ex-smoker and attorney who has been advocating for sound
policies for vapor products for more than 5 years. He discussed
the public health impacts of vapor products and the ongoing
debate within the tobacco control community. He cited a Center
for Disease Control and Prevention (CDC) survey that found that
22 percent of the adults who claimed to have quit smoking in the
past year are using vapor products. Regardless of whether people
approve, this is what is happening, he said.
Turning to the question of vaping use among youth, he pointed to
the short summary issued by Ohio Attorney General, Tom Miller,
and urged a smart review of the numbers. They show that only 2
percent of American youths are using vapor products more than 20
days of the month. Other surveys found that 60-80 percent of
youth that report using vapor products in the last month are
using a non-nicotine product. He suggested the committee keep
the numbers in perspective.
6:50:18 PM
ALEX MCDONALD, Ice Fog Vapor, Inc., Fairbanks, Alaska, testified
in opposition to including vapor products in SB 133. He related
how vapor products helped end his 19-year tobacco addition. He
maintained that the tax proposed on vapor products is different
than on tobacco products because the former are readily
available for purchase on the Internet. It will be impossible
for small family-owned businesses to compete with that market.
Furthermore, online vendors lack the ability to check IDs to
ensure they aren't selling to minors. The vaping industry in
Alaska is in full support of SB 141 relating to the sale of
vapor products to minors, he said.
6:51:57 PM
THOMAS BROWN, representing himself, Anchorage, Alaska, testified
that he opposes SB 133 for a number of reasons. First, vaping is
a healthy alternative to combustible tobacco. This is evidenced
by documents he intends to provide to the committee. Second, as
vaping goes up smoking goes down. This is true for every age
range so the behavior should be promoted. Third, SB 133 will
harm Alaskan businesses and jobs. The tax will cause consumers
to turn to the Internet or the black market. Fourth, the
unintended consequence of increasing sin taxes is that revenue
goes down. This bill will cause more people to smoke, cost
Alaskans jobs, and create a new class of criminals. Nothing
about the bill is desirable, he said.
6:54:14 PM
FRED STURMAN, representing himself, Kenai, Alaska, stated that
he opposes taxes of any description until the legislature cuts
at least 30 percent from the budget. He highlighted that Ruby
Hines sent suggestions for cutting the budget in 14 places and
he's aware of no cuts thus far. He suggested punitive measures
to ensure this is done.
CHAIR COSTELLO, finding no further comments on SB 133, closed
public testimony and held the bill in committee.