Legislature(2001 - 2002)
04/25/2001 01:48 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 228
"An Act relating to the offense of selling or giving
tobacco to a minor, to the accounting of fees from
business license endorsements for tobacco products, to
the disclosure of certain confidential cigarette and
tobacco product information, to notification regarding
a cigarette manufacturer's noncompliance with the
tobacco product Master Settlement Agreement, to
business license endorsements for sale of tobacco
products, to citations and penalties for illegal sales
of tobacco products; and providing for an effective
date."
Members were provided with Amendment 1, 22LS0797\J.1, Ford,
4/25/01 (copy on file).
Representative Harris spoke in support of the legislation.
He observed that the state of Alaska received a federal
penalty that resulted in the loss of $1.5 million dollars in
federal receipts because it was out of compliance with the
federal regulations for the sale of tobacco products to
minors. The state needs to maintain a 20 percent success
rate. He explained that the legislation stiffens the penalty
for selling tobacco to a minor. Business license fees for
endorsement of tobacco sales would be increased. The fiscal
note is $487 thousand dollars.
TAPE HFC 01 - 95, Side B
Representative Harris concluded that the legislation would
allow the state to retain the $1.5 million dollars in
federal funds.
ELMER LINDSTROM, SPECIAL ASSISTANT, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES spoke in support of HB 228. He noted that
the legislation responds to federal noncompliance for
federal fiscal year 1999. In the absence of the bill and the
attached funding, the state of Alaska would lose $1.5
million dollars from its federal substance abuse block
grant. These funds would come out of treatment of alcohol
abuse. Substance Abuse dollars are being held hostile for
enforcement activities related to the sell of tobacco to
minors. The department appealed the penalty. While the
appeal was pending Congress passed legislation allowing for
an alternative penalty. The alternative penalty allows
states to put the amount of funding reflected in the fiscal
note into new tobacco enforcement resources to satisfy the
federal fiscal year 1999 Synar penalty [the federal Synar
Amendment requires sales to minors to be less than 20
percent]. The legislation would give support to enforcement
and allow the noncompliance numbers to be reduced.
Currently, 34 percent of minors that attempted to purchase
tobacco were successful.
Vice-Chair Bunde spoke in support of enforcement, but
questioned how it would affect small communities. Mr.
Lindstrom stressed the need for rural enforcement. He
observed that in communities with less than 9 outlets, by
and large small rural communities, 61 percent of the time
minors were able to purchase tobacco. He observed that youth
flown in from Anchorage were able to purchase tobacco in
these small rural communities.
Mr. Lindstrom discussed the fiscal notes. He explained that
the fiscal notes from the Department of Community and
Economic Development, Occupational Licensing and the
Department of Law are interagency receipts that are included
in the Department of Health and Social Services' $487.9
thousand dollar fiscal note. The general fund appropriation
would be made to the Department of Health and Social
Services and they would contract for the services needed to
complete enforcement activities.
MIKE LIVINGSTON, DETECTIVE, ANCHORAGE POLICE DEPARTMENT
testified via teleconference in support of the legislation.
He has conducted tobacco compliance checks since 1997. He
suggested the addition of language on page 3, line 19: or an
agent or an employee working under the endorsement of an
agent. He emphasized the need for education.
Co-Chair Mulder pointed out that the language in subject (1)
on page 3 is modified by subsection (d) on page 3. He
concluded that an agent would be responsible for a violation
the agent or the employee of the agent. Mr. Livingston
pointed out that the wording is included in subsections (2)
and (3) and argued that subsection (1) would be further
clarified by its inclusion.
DAN BRANCH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW
testified that the trigger was contained in the previous
section, but that the additional language would make it
clear.
He observed that an amendment to section 6, subsection (1)
would clarify the concern.
Mr. Branch agreed that subsection (d) is the trigger to
subsection (1) on page 3. He acknowledged that the inclusion
of the language recommended by Mr. Livingston would further
clarify that if a person has not had a prior violation or
their clerk has not had a prior violation then they would be
treated as a first offender. He discussed Amendment 1 (copy
on file.) He suggested that the amendment would resolve the
problem by clarifying that if there were no prior offense or
penalties under paragraph (2) - (4) they would be treated as
a first offender and receive the 20-day minimum provision.
The intent was to make sure that people were covered that
had prior offenses older than 24 months. Those with offenses
older than 24 months would be treated as first offenders.
Mr. Branch further discussed amendment 1. He noted that the
Title 11 provides that vending machines cannot be used for
the sale of tobacco accept in bars and employee break rooms
where they are not accessible to minors. Owners must
adequately supervise the use of the machines. The amendment
would clarify that vending machine owners would have to have
an endorsement to place a vending machine in a bar. The bar
owner would also have to have an endorsement. Vendor machine
companies only have to buy one endorsement for all their
vending machines. Other vendors of tobacco would have to
have an endorsement for each location where tobacco is sold.
Additional language on line 27, page 4 would clarify that,
during the period of suspension, a vending machine owner
could not operate a vending machine at the location that the
offense took place. The machine in violation would be taken
out of service during the period of suspension and could not
be used in another location. The original legislation would
have taken all of the vendor's machines out of business for
the period of the suspension. This provision was removed in
House Judiciary. Amendment 1 is a compromise, which strikes
a fair balance and ensures that the vending machine owner
could not take the machine to another location in order to
continue making money.
Representative Harris MOVED to ADOPT Amendment 1. There
being NO OBJECTION, it was so ordered.
Co-Chair Mulder MOVED to change the funds source on fiscal
note #3 to tobacco settlement funds. There being NO
OBJECTION, it was so ordered.
Representative Foster MOVED to report CSHB 228 (FIN) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 228 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with and a previously published
zero fiscal note (#1) by the Department of Revenue; and
three previously published fiscal impact notes (#2, #3, and
#4): Department of Law, Department of Health and Social
Services and Department of Community and Economic
Development.
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