Legislature(2001 - 2002)
04/25/2001 01:48 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.