Legislature(2021 - 2022)ADAMS 519

05/07/2021 01:30 PM House FINANCE

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Heard & Held
-- Public Testimony --
Heard & Held
-- Public Testimony --
                  HOUSE FINANCE COMMITTEE                                                                                       
                        May 7, 2021                                                                                             
                         1:35 p.m.                                                                                              
1:35:49 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Merrick called the  House Finance Committee meeting                                                                    
to order at 1:35 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Representative  Zack Fields,  Co-Chair,  Labor and  Commerce                                                                    
Committee; Representative Sara Hannan, Sponsor.                                                                                 
PRESENT VIA TELECONFERENCE                                                                                                    
Deborah  Riddle,  Division  Operation Manager,  Division  Of                                                                    
Innovation  And Education  Excellence,  Department of  Labor                                                                    
and   Workforce   Development;   Nicole   Reynolds,   Deputy                                                                    
Director,   Tax  Division,   Department   of  Revenue;   Joy                                                                    
Hartlieb,  Division of  Labor Standards  and Public  Safety,                                                                    
Department of Labor and  Workforce Development; Greg Cashen,                                                                    
Assistant  Director,  Employment   Security,  Department  of                                                                    
Labor  and  Workforce  Development; Jason  Jones,  Self  and                                                                    
Owner,   Legion  Vapor,   Anchorage;  Alyssa   Keill,  Self,                                                                    
Fairbanks;  Royce Walston,  Self, Ketchikan;  Carrie Nyssen,                                                                    
American Lung  Association, Vancouver, Washington;  Jay Oku,                                                                    
Self,   California;  Terrance   Robbins,  Self,   Ketchikan;                                                                    
Charles Edge,  Self,   Fairbanks;   Alex   McDonald,   Self,                                                                    
Fairbanks;   Patricia  Patterson,   Self,  Soldotna;   Robin                                                                    
Minard,  Matsu Health  Foundation,  Wasilla; Shaun  D'Sylva,                                                                    
Alaska Smoke Free Trade  Association, Seattle; Jessi Walton,                                                                    
Self,  Fairbanks; Emily  Nenon, Alaska  Government Relations                                                                    
Director,  American Cancer  Society, Anchorage;  Don Enslow,                                                                    
Self,   Anchorage;   Jamie  Morgan,   Government   Relations                                                                    
Regional  Lead,  American   Heart  Association,  Sacramento,                                                                    
California;  Clint  Farr,  Operations Manager,  Division  of                                                                    
Public  Health, Department  of Health  and Social  Services;                                                                    
Sharon  Walsh, Deputy  Director,  Division of  Corporations,                                                                    
Business   and   Professional   Licensing,   Department   of                                                                    
Commerce, Community and Economic Development.                                                                                   
HB 110    AGE FOR NICOTINE/E-CIG; TAX E-CIG.                                                                                    
          HB 110 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 132    SCHOOL APPRENTICESHIP PROGS; TAX CREDITS                                                                              
          HB 132 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
Co-Chair Merrick reviewed the agenda for the day.                                                                               
HOUSE BILL NO. 132                                                                                                            
     "An   Act   relating   to   technical   education   and                                                                    
     apprenticeships;  relating   to  concurrent  vocational                                                                    
     education,  training, and  on-the-job trade  experience                                                                    
     programs  for  students  enrolled in  public  secondary                                                                    
     schools; relating to child labor;  and providing for an                                                                    
     effective date."                                                                                                           
1:36:27 PM                                                                                                                    
Co-Chair Merrick indicated that the  bill was first heard in                                                                    
committee on May 6, 2021.                                                                                                       
1:36:37 PM                                                                                                                    
REPRESENTATIVE  ZACK FIELDS,  CO-CHAIR,  LABOR AND  COMMERCE                                                                    
COMMITTEE,  introduced  himself  and declined  to  make  any                                                                    
additional opening comments regarding the legislation.                                                                          
1:36:44 PM                                                                                                                    
Co-Chair Merrick OPENED public testimony.                                                                                       
1:36:52 PM                                                                                                                    
AT EASE                                                                                                                         
1:39:57 PM                                                                                                                    
Co-Chair Merrick noted there were no testifiers.                                                                                
Co-Chair Merrick CLOSED public testimony.                                                                                       
Co-Chair  Merrick   asked  Ms.  Reynold  to   review  fiscal                                                                    
note #5.                                                                                                                        
1:40:44 PM                                                                                                                    
DEBORAH  RIDDLE,  DIVISION  OPERATION MANAGER,  DIVISION  OF                                                                    
INNOVATION  AND EDUCATION  EXCELLENCE,  DEPARTMENT OF  LABOR                                                                    
AND  WORKFORCE DEVELOPMENT  (via  teleconference), spoke  to                                                                    
published  zero  fiscal   note  5  [FN  5   (EED)]  for  the                                                                    
Department of  Education and  Early Development  (DEED). She                                                                    
related  that DEED  currently worked  in collaboration  with                                                                    
school   districts  to   increase  career,   technical,  and                                                                    
culturally relevant education to  meet student and workforce                                                                    
needs. The bill was not expected to have a fiscal impact                                                                        
1:41:30 PM                                                                                                                    
Representative Carpenter stated  that the sectional analysis                                                                    
in section  2  added duties   for DEED, to  collaborate with                                                                    
Department  of Labor  and Workforce  Development (DLWD).  He                                                                    
suggested  that adding  duties  cost  something and  implied                                                                    
that extra work was required  to fulfill the mandate. He did                                                                    
not understand how  the extra duties did not  incur a fiscal                                                                    
impact to DEED.                                                                                                                 
1:42:36 PM                                                                                                                    
Representative Fields  replied that DEED  currently provided                                                                    
financial  support  to  the  school  districts  through  the                                                                    
Perkins grants.  The intent of  the language was  to provide                                                                    
supporting  statutory   language  to  allow  DEED   and  the                                                                    
Department  of Labor  and  Workforce  Development (DLWD)  to                                                                    
collaborate on  ways to use  the forthcoming  federal grants                                                                    
to  support  school  apprenticeship programs.  He  confirmed                                                                    
that  the relationships  were already  established, and  the                                                                    
language ensured  that the agencies could  capitalize on the                                                                    
grant opportunities.                                                                                                            
Ms.  Riddle relayed  that DEED  had  a state  plan with  the                                                                    
United States Department  of Education to work  with DLWD to                                                                    
help  facilitate work  based learning  which fell  under the                                                                    
apprenticeship bill.                                                                                                            
1:43:50 PM                                                                                                                    
Representative  Carpenter  thought  the phrases  like   work                                                                    
with   or  additional  duties   was   incredibly vague.   He                                                                    
asked what the  additional duties were being  added to DEED.                                                                    
Ms.  Riddle  reported that  further  work  with the  sponsor                                                                    
would better  define the details.  She reiterated  that DEED                                                                    
would partner  with DOL  to facilitate  the grants  and were                                                                    
currently  working   with  them  to  match   districts  with                                                                    
apprenticeship activities.                                                                                                      
Representative  Carpenter wanted  the specific  list of  the                                                                    
added duties  and better   understanding  of what  the added                                                                    
duties  were before  he  approved of  a  program that  could                                                                    
potentially need future funding.                                                                                                
Representative Fields replied that  the commissioner of DEED                                                                    
had done  a good  job of  figuring out  how to  support work                                                                    
based  learning  and   collaborate  across  departments.  He                                                                    
characterized   the  fiscal   note   request  as   providing                                                                    
statutory  support  for  something  the  department  already                                                                    
carried out. He thought the  outcomes of work based programs                                                                    
made  the   statutory  support  important  but   because  of                                                                    
departmental leadership the engagement already existed.                                                                         
1:46:56 PM                                                                                                                    
NICOLE REYNOLDS,  DEPUTY DIRECTOR, TAX  DIVISION, DEPARTMENT                                                                    
OF  REVENUE (via  teleconference), indicated  that published                                                                    
fiscal note  3 [FN 3  (REV)] from the Department  of Revenue                                                                    
(DOR) was  indeterminate because  the revenue impact  of the                                                                    
bill could  not be determined because  the department lacked                                                                    
sufficient information to estimate  the number of registered                                                                    
apprentices a taxpayer  may hire or the  number of corporate                                                                    
income tax  taxpayers who  may hire  registered apprentices.                                                                    
She offered  that the additional  cost to the  department to                                                                    
administer the credit  was minimal and could  be absorbed by                                                                    
the  department. All  the required  tasks like  updating tax                                                                    
forms  on  the Tax  Revenue  Management  System (TRMS),  and                                                                    
updating  Revenue  Online     the  public  taxpayer  portal,                                                                    
could  be  administered  with  the  resources  currently  in                                                                    
JOY  HARTLIEB,  DIVISION  OF   LABOR  STANDARDS  AND  PUBLIC                                                                    
SAFETY, DEPARTMENT  OF LABOR AND WORKFORCE  DEVELOPMENT (via                                                                    
teleconference),  reported that  the  published zero  fiscal                                                                    
note [FN 2  ((LWF)] showed there were zero  costs related to                                                                    
the bill.                                                                                                                       
1:49:55 PM                                                                                                                    
GREG  CASHEN,   ASSISTANT  DIRECTOR,   EMPLOYMENT  SECURITY,                                                                    
DEPARTMENT   OF  LABOR   AND   WORKFORCE  DEVELOPMENT   (via                                                                    
teleconference),  commented that  the published  fiscal note                                                                    
was zero.  The department collaborated with  DEED regularly.                                                                    
He added that DLWD and  the University of Alaska created the                                                                    
CTE plan  in 2010,  updated it in  2018, included  school to                                                                    
apprenticeship pathways from  career and technical education                                                                    
to  post-secondary education  and registered  apprenticeship                                                                    
programs that DLWD administered.                                                                                                
Representative Carpenter  cited page 4,  line 2 of  the bill                                                                    
and  read   using  funds available  for  that  purpose    He                                                                    
wondered  what funds  the bill  referred to.  Representative                                                                    
Fields  responded that  there were  ongoing federal  funding                                                                    
streams through  DLWD. Some  of the  streams were  grants to                                                                    
organizations   such   as    the   American   Apprenticeship                                                                    
Initiative.  He  noted  that   other  funding  streams  like                                                                    
Workforce  Innovation and  Opportunity  Act  (WIOA) went  to                                                                    
individuals  to  support  training [through  local  programs                                                                    
providing youth  services] in partnership with  American Job                                                                    
Centers. He expected more funding  would be available in the                                                                    
future  and  reiterated  that  the  primary  funding  stream                                                                    
currently was the Perkins grants.                                                                                               
1:52:32 PM                                                                                                                    
Representative Carpenter  asked if  any of the  funding went                                                                    
directly   to   school  districts.   Representative   Fields                                                                    
answered  that the  Perkins funds  went  directly to  school                                                                    
districts.  Most of  the DLWD  funds  historically, had  not                                                                    
gone  directly   to  the   school  districts   with  limited                                                                    
1:53:16 PM                                                                                                                    
Representative Carpenter  felt that  he had to  protest what                                                                    
he was  hearing. He voiced  that tasks like  develop, create                                                                    
and, expand  cost money and  he found the zero  fiscal notes                                                                    
 unbelievable.   Representative  Fields provided  background                                                                    
history on  DLWD involvement in  supporting apprenticeships.                                                                    
He shared that  the Commissioner at the  time [Click Bishop,                                                                    
former commissioner,  DLWD] trained department  employees to                                                                    
become  apprenticeship specialists.  He elaborated  that the                                                                    
specialists worked  closely with  the federal  Department of                                                                    
Labor that regulated and  oversaw apprenticeships. The state                                                                    
specialists  started apprenticeship  programs and  supported                                                                    
employers.   The   infrastructure  continued   across   many                                                                    
administrations.     When    additional     federal    grant                                                                    
opportunities became available,  the department utilized the                                                                    
federal apprenticeship  grant money  and distributed  it. He                                                                    
shared  that he  had worked  for DLWD  and administered  the                                                                    
grants at  a time  when DLWD experienced  significant budget                                                                    
reductions.  He  deduced  that   by  looking  back,  it  was                                                                    
possible  to see  that the  department could  expand support                                                                    
for  apprenticeships  when  federal funds  became  available                                                                    
even with  reduced Undesignated  General Funds  (UGF). There                                                                    
had  been proposals  put forward  by  the administration  to                                                                    
further  expand  federal  grant dollars  and  the  bill  was                                                                    
targeting the opportunity for  when additional grant dollars                                                                    
were received.                                                                                                                  
1:55:27 PM                                                                                                                    
Representative  Carpenter  asked  if  the  school  districts                                                                    
could  absorb the  burden of  creating additional  programs.                                                                    
Representative  Fields  replied  that   he  asked  the  same                                                                    
question to school districts when  crafting the bill. He had                                                                    
discussions   with  the   career  and   technical  education                                                                    
directors at  several school districts who  wanted to expand                                                                    
school apprenticeship  programs. He had inquired  about what                                                                    
could be  done to  support the  districts to  strengthen the                                                                    
programs   thus,  creating   more   opportunities  for   the                                                                    
students. He relayed that the  answer was they needed school                                                                    
apprenticeship  coordinators who  worked under  the schools                                                                     
CTE  directors.   The  coordinators  would   strengthen  the                                                                    
programs   and   create    more   apprenticeship   placement                                                                    
opportunities for  students. He referred to  prior testimony                                                                    
from  Trish Zugg,  Information Technology  Instructor/Grants                                                                    
Administration,  Matanuska-Susitna Borough  School District,                                                                    
who hoped the  state would secure more of  the federal grant                                                                    
funding and fund  the positions in the  school districts. He                                                                    
ascertained that  the school districts needed  more capacity                                                                    
and he hoped that through  the collaboration with DEED, some                                                                    
of the funds could be used for the positions.                                                                                   
1:57:11 PM                                                                                                                    
Representative Thompson  referred to page 5  lines 6 through                                                                    
11 and read the following:                                                                                                      
     (f) In this section,  "veteran" means an individual who                                                                    
     was honorably discharged from service  in the (1) armed                                                                    
     forces of  the United States, including  a reserve unit                                                                    
     of  the  armed forces  of  the  United States;  or  (2)                                                                    
     Alaska  Territorial  Guard,  the Alaska  Army  National                                                                    
     Guard,  the Alaska  Air National  Guard, or  the Alaska                                                                    
     Naval Militia.                                                                                                             
Representative  Thompson  asked   whether  the  Coast  Guard                                                                    
should  be  included  on  the  list.  Representative  Fields                                                                    
answered in the affirmative.                                                                                                    
Co-Chair Merrick  noted amendments  for HB  132 were  due by                                                                    
6:00 p.m. on Monday, May 10, 2021.                                                                                              
1:58:17 PM                                                                                                                    
Representative Rasmussen  believed that high  school seniors                                                                    
should have  more options upon  completing high  school. She                                                                    
related  that a  college  degree was  not  required for  her                                                                    
career  as a  residential appraiser.  She did  not have  the                                                                    
kind of college  debt that others had making  the same level                                                                    
of  income.  She thought  that  the  districts were  already                                                                    
anticipating   the  shift   toward   career  or   vocational                                                                    
programs. She  did not view the  bill as a means  of forcing                                                                    
an  unfunded  mandate.  She thought  that  there  was  broad                                                                    
consensus  in   the  legislature   to  support   career  and                                                                    
vocational opportunities. The state had  a higher need for a                                                                    
skilled  labor workforce.  She suggested  that  even if  the                                                                    
bill did have  a cost to it, the state  would benefit in the                                                                    
long term.  She supported  the legislation and  relayed that                                                                    
school  districts   embraced  the  concept  of   career  and                                                                    
vocational education.                                                                                                           
Representative   Carpenter  took   offense   to  the   prior                                                                    
comments.  He   believed  that   Representative  Rasmussens                                                                     
comments were addressed to him, and he felt lectured to.                                                                        
2:01:04 PM                                                                                                                    
AT EASE                                                                                                                         
2:01:51 PM                                                                                                                    
Representative Johnson  referred to page  4, lines 22  to 24                                                                    
which she read the following:                                                                                                   
     To qualify as a  registered apprentice for the purposes                                                                    
     of  the  credit  under  this  section,  a  person  must                                                                    
     participate  in  a  registered  apprenticeship  program                                                                    
     recognized  by the  Department of  Labor and  Workforce                                                                    
Representative Johnson  asked if there was  a list available                                                                    
of  registered   participants  in  the   committee  members                                                                     
packets. Representative Fields answered  in the negative. He                                                                    
indicated  that   there  were  several   hundred  registered                                                                    
apprenticeship programs  in the state sponsored  by hundreds                                                                    
of employers.  He offered to  follow up with the  full list.                                                                    
Representative Johnson thanked the sponsor.                                                                                     
HB  132  was  HEARD  and   HELD  in  committee  for  further                                                                    
2:03:13 PM                                                                                                                    
AT EASE                                                                                                                         
2:09:05 PM                                                                                                                    
HOUSE BILL NO. 110                                                                                                            
     "An  Act raising  the minimum  age  to purchase,  sell,                                                                    
     exchange,  or  possess  tobacco, a  product  containing                                                                    
     nicotine,  or an  electronic smoking  product; relating                                                                    
     to   transporting   tobacco,   a   product   containing                                                                    
     nicotine,  or an  electronic smoking  product; relating                                                                    
     to  the taxation  of electronic  smoking products;  and                                                                    
     providing for an effective date."                                                                                          
2:09:15 PM                                                                                                                    
Co-Chair Merrick OPENED public testimony.                                                                                       
2:09:48 PM                                                                                                                    
JASON JONES,  SELF AND OWNER,  LEGION VAPOR,  ANCHORAGE (via                                                                    
teleconference),  opposed  HB  110 as  it  would  negatively                                                                    
affect  his business.  He believed  that vaping  changed his                                                                    
life because it  helped him quit smoking. He  stated that he                                                                    
vigilantly enforced the  21 year old age limit  in his shop.                                                                    
The Anchorage  municipal tax had  impacted his  business. He                                                                    
felt that  the tax would harm  adults 21 and over  that vape                                                                    
instead  of  smoke. He  believed  that  tax would  ruin  his                                                                    
2:12:56 PM                                                                                                                    
ALYSSA KEILL,  SELF,     FAIRBANKS   (via   teleconference),                                                                    
spoke  in favor  of HB  110.  She was  a part-time  swimming                                                                    
coach for  teens. She relayed  that when she asked  the team                                                                    
about vaping  many admit to  having tried vaping  and raised                                                                    
doubts about  the health risks.  She deduced that  the doubt                                                                    
sprang  from  the  assertion  that  vaping  was  safer  than                                                                    
smoking.  She  asserted  that  safer   did  not  mean  safe.                                                                    
Nicotine  addiction was  an addiction  regardless of  how it                                                                    
was ingested. She thought the  legislation showed that vapor                                                                    
products  were nicotine  products and  should be  treated as                                                                    
any  other product  containing nicotine.  She felt  that the                                                                    
bill was a step in the right direction.                                                                                         
2:14:55 PM                                                                                                                    
ROYCE WALSTON, SELF,     KETCHIKAN   (via   teleconference),                                                                    
spoke in support of HB 110.  He was a sophomore at Ketchikan                                                                    
High School.  He related that  he saw fellow  students using                                                                    
Jule pods and vaping in school  and out of school. It caused                                                                    
the schools   bathrooms to be  shut down. He shared  that he                                                                    
worked for  the Ketchikan  Youth Alliance that  was combined                                                                    
with  the Ketchikan  Wellness Coalition  and was  working to                                                                    
build a safer community. He  thought the issue was important                                                                    
because nicotine was  a very addictive drug.  He shared from                                                                    
personal experience the way  nicotine addiction had affected                                                                    
people close  to him who  lost scholarships or  their lives.                                                                    
He spoke  of his cousin  being plagued with asthma  that had                                                                    
tried vaping and it caused  his lung to collapse. His cousin                                                                    
currently, better  understood that vaping was  dangerous. He                                                                    
emphasized  his  support  for  taxing  vaping  products  and                                                                    
thought  that   it  created  equity  amongst   all  nicotine                                                                    
products. He  asserted that individuals that  vape influence                                                                    
others to vape.                                                                                                                 
2:18:03 PM                                                                                                                    
Vice-Chair Ortiz  asked if it  was Mr. Walston's  first time                                                                    
testifying  before  a  legislative  committee.  Mr.  Walston                                                                    
responded in  the affirmative. Representative  Ortiz praised                                                                    
and appreciated his involvement.                                                                                                
Representative    Rasmussen   appreciated    Mr.   Walstons                                                                     
testimony. She asked  how his friends under 19  years of age                                                                    
had  been  influenced  and  how  they  obtained  the  vaping                                                                    
products. Mr. Walston stated that  his peers were influenced                                                                    
by older peers. He thought  that those engaged in vaping who                                                                    
were underage   obtained  the products through  older peers,                                                                    
or randomly found  the products. He was  uncertain about the                                                                    
Co-Chair   Merrick    commended   Mr.   Walston    for   his                                                                    
participation and testimony.                                                                                                    
2:19:43 PM                                                                                                                    
CARRIE NYSSEN, AMERICAN    LUNG   ASSOCIATION,    VANCOUVER,                                                                    
WASHINGTON (via teleconference),  strongly supported HB 110.                                                                    
She  voiced that  increasing  prices decreased  consumption,                                                                    
discouraged, and delayed use of  the dangerous products. She                                                                    
offered that 95 percent of  adult tobacco users began before                                                                    
the age of  21. A delay in  age for the first  use of vaping                                                                    
and  tobacco products  reduced the  risk of  addition. Youth                                                                    
exposure  to   nicotine  during  critical  years   of  brain                                                                    
development  could cause  lasting adverse  consequences. She                                                                    
indicated that  nicotine addition could occur  after minimal                                                                    
exposure  to tobacco  products.  Lung development  continued                                                                    
into the teen years and  exposure to toxins impaired healthy                                                                    
lung   development.  She   advocated  for   a  comprehensive                                                                    
approach   to  decrease   the   youth   use  of   electronic                                                                    
cigarettes.  Raising  the age  and  the  cost were  evidence                                                                    
based policies  that would protect youth.  The American Lung                                                                    
Association  supported removing  the  penalty provisions  in                                                                    
the bill.                                                                                                                       
2:21:54 PM                                                                                                                    
Representative  Josephson asked  Ms.  Nyssen  to repeat  her                                                                    
last sentence. Ms.  Nyssen replied that she  referred to the                                                                    
penalty for  possession of tobacco use.  She elaborated that                                                                    
the  penalty  had no  evidence  that  it worked  and  harmed                                                                    
2:22:26 PM                                                                                                                    
JAY OKU, SELF, CALIFORNIA  (via  teleconference),  spoke  in                                                                    
strong opposition  to HB  110 primarily  due to  the dangers                                                                    
posed  by black-market  activity.  He  believed that  vaping                                                                    
helped  offset the  leading cause  of preventable  death. He                                                                    
alleged   that  the   negative   effects   of  vaping   were                                                                    
 hyperbole.  He claimed  that no one was  dying from vaping.                                                                    
He  listed some  statistics  on the  topic  of children  and                                                                    
vaping  and stated  that less  than one  percent of  current                                                                    
young vapors had not first  experienced nicotine by smoking.                                                                    
He argued that  by attributing harmful affects  to vaping it                                                                    
discouraged some smokers from  using vaping products to quit                                                                    
smoking.  He  indicated that  the  current  federal age  for                                                                    
vaping  was 21  and should  be strictly  enforced, and  that                                                                    
enforcement  efforts  should  be  increased.  He  felt  that                                                                    
specialty vape shops were compliant  and not the problem. He                                                                    
believed that the black-market was the problem.                                                                                 
2:25:23 PM                                                                                                                    
TERRANCE  ROBBINS,  SELF,  KETCHIKAN  (via  teleconference),                                                                    
spoke in support  HB 110. He believed that  raising taxes on                                                                    
nicotine  products resulted  in a  reduction in  the use  of                                                                    
smoking  products,  especially  among  the  most  vulnerable                                                                    
populations that included youth.  He relayed that 90 percent                                                                    
of  all  adult tobacco  users  became  addicted to  nicotine                                                                    
before  the age  of  18. On  January 1,  2017,  the City  of                                                                    
Ketchikan  enacted an  excise tax  on tobacco  products that                                                                    
included  vape   devices.  He   shared  that   results  were                                                                    
positive, and a survey showed  a reduction in adults smoking                                                                    
rates declined by 24 percent  in 2017. He cited limited data                                                                    
that   concluded  the   Ketchikan  Gateway   Borough  School                                                                    
District experienced a 63 percent  decrease in cigarette use                                                                    
from 2015 to 2019 and  youth vaping increased by 51 percent.                                                                    
He found data that did  not favor fines or punitive measures                                                                    
for youth as a deterrent to tobacco use.                                                                                        
2:28:43 PM                                                                                                                    
CHARLES EDGE,  SELF,  FAIRBANKS (via  teleconference), spoke                                                                    
to HB 110. He shared that he  was 20 when he enlisted in the                                                                    
armed forces and  felt the bill needed  a military exemption                                                                    
clause and  did not favor the  age increase to 21.  He noted                                                                    
that he was  always carded when purchasing  vape products in                                                                    
Fairbanks stores.  He believed that underage  children would                                                                    
obtain vaping products regardless of  the law. It would take                                                                    
away the choice  of legal law-abiding adults.  He noted that                                                                    
the bill  allowed adults to purchase  e-cigarettes for their                                                                    
children and felt that the bill sent mixed signals.                                                                             
2:31:43 PM                                                                                                                    
Representative  Rasmussen thanked  Mr. Edge.  She encouraged                                                                    
him to continue to call-in and testify.                                                                                         
2:32:10 PM                                                                                                                    
ALEX   MCDONALD,  SELF,   FAIRBANKS  (via   teleconference),                                                                    
opposed HB  110. He pointed  out that the subject  of taxing                                                                    
vaping  products  had  been brought  up  during  the  Walker                                                                    
Administration and  did not pass  at the time.  He suggested                                                                    
that  a tax  under the  present pandemic  situation was  not                                                                    
favored.  He  also  noted  that  the  Fairbanks  North  Star                                                                    
Borough and  Fairbanks City Council had  recently voted down                                                                    
a  similar tax.  He cited  a study  that concluded  that the                                                                    
combustible  delivery system  of nicotine  posed the  danger                                                                    
and that  non-combustible methods  posed less risk  and cost                                                                    
that state  less in  healthcare costs.  He urged  members to                                                                    
oppose the bill.                                                                                                                
2:35:01 PM                                                                                                                    
PATRICIA  PATTERSON,  SELF, SOLDOTNA  (via  teleconference),                                                                    
opposed the bill  because she wanted it  amended. She shared                                                                    
that she  owned a tobacco  store and a marijuana  store. She                                                                    
voiced that many  of electronic devices sold  in tobacco and                                                                    
marijuana stores  were  empty.   She believed that  the bill                                                                    
would cause confusion and possibly  apply the 75 percent tax                                                                    
in  the marijuana  store. She  advised only  taxing nicotine                                                                    
and   to  omit   the   provisions   taxing  the   electronic                                                                    
2:37:55 PM                                                                                                                    
ROBIN   MINARD,  MATSU   HEALTH  FOUNDATION,   WASILLA  (via                                                                    
teleconference),  spoke in  favor  of  the legislation.  The                                                                    
bill aligned  state law  to federal  statute by  raising the                                                                    
minimum  age from  19 to  21  for all  tobacco products  and                                                                    
taxed  e-cigarettes  at  the  same  rate  as  other  tobacco                                                                    
products.  She was  already aware  of  the effectiveness  of                                                                    
tobacco  taxes,  which  fostered non-use  of  tobacco  among                                                                    
youth, encouraged  smokers to quit, and  reduced the overall                                                                    
consumption of tobacco. Increased  taxes also had a positive                                                                    
effect  on  non-smokers  with less  exposure  to  secondhand                                                                    
smoke. She  furthered that e-cigarette vapor  had been found                                                                    
to  contain    flavors, propylene  glycol,  glycerin,  heavy                                                                    
metals, carcinogens, and metal  nano particles and could not                                                                    
be  regarded as  harmless. She  indicated that  inconsistent                                                                    
research had  been attributed to  much of the  vape research                                                                    
proponents  touting   its  safe  use.  She   encouraged  the                                                                    
committee to move HB 110 forward.                                                                                               
2:40:24 PM                                                                                                                    
SHAUN D'SYLVA, ALASKA SMOKE  FREE TRADE ASSOCIATION, SEATTLE                                                                    
(via  teleconference), owned  stores in  Fairbanks, Wasilla,                                                                    
and Anchorage. He opposed the  bill. He stated that research                                                                    
suggested that  vaping was clearly  better than  smoking. He                                                                    
asserted that  in Minnesota  and Massachusetts  increased e-                                                                    
cigarette  taxes encouraged  people  to  smoke tobacco  over                                                                    
vaping. He noted  that in some places in Alaska  there was a                                                                    
55 percent tax on e-cigarettes.  He stated that the industry                                                                    
did not  advertise any longer.  He noted another  study that                                                                    
claimed  the air  inside of  a vape  store was  cleaner than                                                                    
outside   air.  He   urged  members   to  look   at  studies                                                                    
encouraging vaping as a method to stop smoking.                                                                                 
2:44:17 PM                                                                                                                    
JESSI WALTON, SELF,  FAIRBANKS (via teleconference), opposed                                                                    
HB   110.  She   considered  vaping   a   consumer   created                                                                    
alternative.   She  believed that  a  75  percent tax  would                                                                    
force  her to  turn to  the black  market. She  thought that                                                                    
people would  return to  smoking combustible  cigarettes and                                                                    
that the bill was  bad  policy.  She urged members to oppose                                                                    
HB 110                                                                                                                          
2:45:34 PM                                                                                                                    
EMILY NENON, ALASKA  GOVERNMENT RELATIONS DIRECTOR, AMERICAN                                                                    
CANCER SOCIETY,  ANCHORAGE (via teleconference),  had worked                                                                    
on cancer  prevention policy for  20 years. She  shared that                                                                    
she worked  on the tobacco  tax legislative effort  in 2004.                                                                    
She  noted that  tax  statutes had  not  changed since  that                                                                    
time,  but  the markets  had  with  the introduction  of  e-                                                                    
cigarettes in 2007.  She thanked the bill  sponsor and staff                                                                    
for bringing  the bill  forward. She  indicated that  it was                                                                    
noteworthy   that  e-cigarettes   were   not  considered   a                                                                    
cessation product  nor had  any company  applied to  the FDA                                                                    
for them  to be  classified as such.  Combustible cigarettes                                                                    
had  over 3000  chemical compounds  of which  70 were  known                                                                    
human carcinogens.  She reasoned  that it was  not difficult                                                                    
for  a vape  product  to be  less  harmful than  combustible                                                                    
cigarettes.  Tobacco  use cost  the  state  $438 million  in                                                                    
healthcare costs. She was available for questions.                                                                              
2:47:49 PM                                                                                                                    
DON ENSLOW,  SELF, ANCHORAGE (via teleconference),  spoke in                                                                    
strong support of  HB 110. He was a  safety professional for                                                                    
43 years  and had to  measure air contaminants  for exposure                                                                    
limits on job sites. He  indicated that chemical products in                                                                    
e-cigarettes  included propylene  glycol, which  when heated                                                                    
turned  into formaldehyde  and acetaldehyde  that were  both                                                                    
carcinogens. In the workplace, the  OSHA exposure limits for                                                                    
propylene  glycol   was  .05  parts  per   million  and  for                                                                    
formaldehyde  it  was  .5  parts  per  million.  Very  small                                                                    
amounts  of  the chemicals  could  be  detrimental to  human                                                                    
health. He furthered that even  though the FDA had not begun                                                                    
its  review of  e-cigarettes, researchers  know that  vaping                                                                    
devices contained propylene  glycol and related carcinogens,                                                                    
diacetone,  diethylene  glycol,   metals,  and  benzene.  He                                                                    
believed  that   increasing  taxes   would  be   a  monetary                                                                    
deterrent to the use of vaping products.                                                                                        
2:50:55 PM                                                                                                                    
JAMIE MORGAN,  GOVERNMENT RELATIONS REGIONAL  LEAD, AMERICAN                                                                    
HEART     ASSOCIATION,    SACRAMENTO,     CALIFORNIA    (via                                                                    
teleconference),   indicated   that   the   American   Heart                                                                    
Association fully supported HB  110. She believed that there                                                                    
was an epidemic  in the use of vaping  products among youth.                                                                    
She  relayed that  current or  prior cigarette  smokers were                                                                    
more prone to becoming ill  with Covid-19. She declared that                                                                    
e-cigarettes  were  not  safe  and  increased  the  risk  of                                                                    
stroke,  heart attack,  and  coronary  heart disease.  Young                                                                    
adults  using  e-cigarettes experienced  arterial  stiffness                                                                    
and  blood  vessel  damage  similar   to  smokers.  The  AHA                                                                    
supported public policy that regulated and taxed e-                                                                             
cigarettes  similarly  to  all other  tobacco  products  and                                                                    
favored raising  the legal  age to  21. Studies  showed that                                                                    
youth were  price sensitive to  increased tobacco  taxes and                                                                    
costs.   She  advised   removing   the  language   regarding                                                                    
possession and punishment from the bill.                                                                                        
2:53:45 PM                                                                                                                    
Representative LeBon deduced  that marijuana vaping products                                                                    
were  not taxed.  He  asked if  AHA had  a  position on  the                                                                    
implications of  marijuana use. Ms. Morgan  relayed that the                                                                    
AHA did not  have a position on marijuana  use. However, AHA                                                                    
held  the   position  that   wherever  smoking   tobacco  is                                                                    
prohibited, smoking  marijuana should also be  prohibited to                                                                    
be consistent with smoke free air.                                                                                              
2:54:53 PM                                                                                                                    
REPRESENTATIVE    SARA    HANNAN,    SPONSOR,    spoke    to                                                                    
Representative     LeBon's     question.    She     informed                                                                    
Representative  LeBon   that  cannabis  vaping   was  taxed.                                                                    
Cannabis taxation happened  at the grow level  and was taxed                                                                    
at the same rate regardless of the method of ingestion.                                                                         
2:55:29 PM                                                                                                                    
Co-Chair Merrick CLOSED public testimony.                                                                                       
2:55:55 PM                                                                                                                    
NICOLE  REYNOLDS,  DEPUTY  DIRECTOR,  TAX  DIVISION  OF  THE                                                                    
DEPARTMENT  OF REVENUE  (via  teleconference), reviewed  the                                                                    
published zero fiscal  note [FN 3 (REV)]  for the Department                                                                    
of  Revenue.  She  indicated that  the  department  did  not                                                                    
anticipate a  revenue impact  from the  age change,  as most                                                                    
sellers have  already adjusted selling practices  to reflect                                                                    
federal law. She  explained that DOR did  not have statewide                                                                    
data regarding  the sales of  vaping products  therefore the                                                                    
division used data from  the Matanuska-Susitna Borough's tax                                                                    
on e-cigarette sales and updated  population data to develop                                                                    
an  estimated  tax  base  for  Alaska.  In  the  absence  of                                                                    
statewide data  on electronic cigarette  sales, there  was a                                                                    
wide range of uncertainty  around the revenue estimates. The                                                                    
division   estimated  that   the  tax   would  generate   an                                                                    
additional  $1  million  in  revenue in  FY  2022  and  $2.4                                                                    
million in  FY 2023, rising  with inflation to  $2.7 million                                                                    
in FY 2027. The reason for  the lower revenue estimate in FY                                                                    
2022 was twofold;  revenue would only be  collected for half                                                                    
of  the  fiscal year  because  the  bill would  take  effect                                                                    
halfway through FY 2022, and  it's assumed that distributors                                                                    
would stockpile  inventory before the tax  takes effect. The                                                                    
entirety of the revenue would  be deposited into the General                                                                    
Fund (GF).                                                                                                                      
2:58:47 PM                                                                                                                    
CLINT FARR,  OPERATIONS MANAGER, DIVISION OF  PUBLIC HEALTH,                                                                    
DEPARTMENT    OF   HEALTH    AND   SOCIAL    SERVICES   (via                                                                    
teleconference), discussed the publish  zero fiscal note [FN                                                                    
2 (DHS)] for  the Department of Health  and Social Services.                                                                    
He indicated  that there would  be no fiscal impacts  to the                                                                    
Division  of  Public Health  or  expected  to experience  an                                                                    
increased workload. He was available for questions.                                                                             
2:59:44 PM                                                                                                                    
SHARON  WALSH, DEPUTY  DIRECTOR,  DIVISION OF  CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,   COMMUNITY   AND    ECONOMIC   DEVELOPMENT   (via                                                                    
teleconference),  spoke to  the published  zero fiscal  note                                                                    
[FN  1 (CED)]  He commented  that there  would be  no fiscal                                                                    
impacts on the division.                                                                                                        
3:00:22 PM                                                                                                                    
Representative  Thompson  shared  a  concern.  He  indicated                                                                    
there were  about 2 dozen convenience-type  stores inside of                                                                    
gas  stations in  Fairbanks where  individuals that  were 19                                                                    
years of age  worked. He worried that they  would lose their                                                                    
income if the bill was adopted.                                                                                                 
Co-Chair Merrick voiced that amendments  were due for HB 110                                                                    
by  6:00  pm on  Tuesday,  May  11,  2021.  She also  set  a                                                                    
deadline for HB 85 on May 11, 2021, at 6 pm.                                                                                    
HB  110  was  HEARD  and   HELD  in  committee  for  further                                                                    
3:02:19 PM                                                                                                                    
The meeting was adjourned at 3:02 p.m.                                                                                          

Document Name Date/Time Subjects
HB 110 Public Testimony by 051021.pdf HFIN 5/7/2021 1:30:00 PM
HB 110
HB 132 Amendments 1-3 051121.pdf HFIN 5/7/2021 1:30:00 PM
HB 132