Legislature(2009 - 2010)CAPITOL 106
04/09/2009 03:00 PM House HEALTH & SOCIAL SERVICES
Audio | Topic |
---|---|
Start | |
HB188 | |
HB168 | |
HB223 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+= | HB 188 | TELECONFERENCED | |
*+ | HB 168 | TELECONFERENCED | |
*+ | HB 223 | TELECONFERENCED | |
HB 188-TAX ON MOIST SNUFF 3:06:01 PM CO-CHAIR KELLER announced that the first order of business would be HOUSE BILL NO. 188, "An Act relating to the taxation of moist snuff tobacco, and amending the definition of 'tobacco product' in provisions levying an excise tax on those products." 3:07:08 PM CO-CHAIR HERRON moved to adopt the proposed Committee Substitute (CS) for HB 188, Version 26-LS0714\N, Bullock, 4/9/09, as the working document. CO-CHAIR KELLER objected for the purpose of discussion. CO-CHAIR HERRON said that his intent was to reduce the use of snus and moist snuff tobacco, especially by young people, and to increase the revenue for cessation grants. He said that this Committee Substitute, Version N, changed the tax on moist snuff tobacco to a weight based tax, and changed the tax on snus to an ad valorem tax of 100%. He shared his desire to craft legislation that impacted the smokeless products, which he opined was a crisis in his district. 3:09:28 PM ROB EARL, Staff to Representative Bob Herron, Alaska State Legislature, read from a prepared statement: Currently in state law, cigarettes are taxed at 10 cents per cigarette ($2 a pack) and all other tobacco products (OTP) are taxed ad valorem at 75% of their wholesale price. Moist snuff tobacco (more commonly called "dipping tobacco") presently falls under the OTP tax regime. HB 188 distinguishes between two types of moist snuff tobacco (MST): spitless MST and all other MST. Spitless MST are these new light-weight products that come in teabag-like pouches and obviate the need for spitting. (Like the Camel Snus tin we saw a couple weeks ago when this bill was first heard.) HB 188 taxes this spitless MST at 100% ad valorem. All other MST (mostly the circular tins) will be taxed on a weight-based system of $1.88 per ounce. All other OTPs (everything besides cigarettes and both types of MST) will remain taxed at an ad valorem rate of 75%. Taxing MST (excluding spitless MST) at a $1.88 per ounce is designed to reduce the price disparity between discount and premium MST products. $1.88 per ounce is currently roughly equal to what the premium brands currently pay under the ad valorem system. With HB 188, the tax on discount brands will increase dramatically and the tax on premium brands will initially be about the same. The bill does include a sunset provision, whereby the $1.88 per ounce tax on non-spitless MST products, barring further legislative action, would revert back to a 75% ad valorem rate after 3 years. This new taxation system will produce additional state revenue, mostly by raising the taxes paid by discount MST brands. The Dept. of Revenue has estimated tax revenue would increase by $1.1 million, although that's assuming the same amount of product is purchased as before the tax increase. Also, some popular MST companies lowered prices recently, having the net effect that this bill might result in as much as $1.8 million in additional revenue. This bill also increases funding for the tobacco education and cessation fund by sending 25% of the annual tax revenue collected on all MST products to this fund, which may be used for tobacco education and cessation programs. Currently, if you order cigarettes for personal use over the Internet, you must pay state taxes on those purchases. But in current state law, you do not have to pay taxes on any OTP products imported for personal use. HB 188 closes that loophole. The bill also requires that cigars be sold in packages of at least five; that loose tobacco be sold in packages weighing at least one ounce; and that single dose units be sold in original manufacturer's packaging. 3:13:34 PM CO-CHAIR HERRON said that snus was only available on military bases in Alaska. He said that it was outlawed everywhere in the European Union, except Sweden. 3:14:55 PM REPRESENTATIVE SEATON introduced three amendments for discussion. He began discussion of the first amendment, which read [original punctuation provided]: Page 3, line 19 following "sold only in" insert "no less than units of 10" He said that this would eliminate very small packages of smokeless tobacco. He discussed the second amendment, which read [original punctuation provided]: Page 3, line 1 following "subsection is" delete "75" insert "100" Page 3, line 10 following "subsection is" delete "75" insert "100" He referred to this second amendment and explained that this was an increase to the tax rate from 75 percent of the wholesale price of the tobacco product to 100 percent of the wholesale price. He brought attention to the third amendment, which read [original punctuation provided]: Page 1 line, 10 insert: Sec. 11.76.100. Selling or giving tobacco to a minor. (a) A person commits the offense of selling or giving tobacco to a minor if the person (1) negligently sells a cigarette, a cigar, tobacco, or a product containing tobacco or nicotine to a person under 19 years of age; (2) is 19 years of age or older and negligently exchanges or gives a cigarette, a cigar, tobacco, or a product containing tobacco or nicotine to a person under 19 years of age; (3) maintains a vending machine that dispenses cigarettes, cigars, tobacco, or products containing tobacco or nicotine ; or (4) holds a business license endorsement under AS 43.70.075 and allows a person under 19 years of age to sell a cigarette, a cigar, tobacco or a product containing tobacco or nicotine. He explained that this would regulate products that contained either tobacco or nicotine. He said that the issue revolved around two methods for taxes on tobacco, and he asked the sponsor to formulate a per nicotine dose tax, so that the committee could achieve a balanced discouragement to each nicotine delivery system. 3:19:21 PM CO-CHAIR KELLER closed testimony. [HB 188 was held over. Co-Chair Keller's objection to the motion to adopt the committee substitute (CS) for HB 188, Version 26-LS0714\N, Bullock, 4/9/09, as the working document, was left pending.]
Document Name | Date/Time | Subjects |
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CSHB 188 Sponsor Summary version N.doc |
HHSS 4/9/2009 3:00:00 PM |
HB 188 |
CSHB 188 Version N.PDF |
HHSS 4/9/2009 3:00:00 PM |
HB 188 |
HSS188pkt.PDF |
HHSS 3/26/2009 3:00:00 PM HHSS 4/9/2009 3:00:00 PM |
|
HB223pkt.PDF |
HHSS 4/9/2009 3:00:00 PM |
HB 223 |
HB168pkt.PDF |
HHSS 4/9/2009 3:00:00 PM |
HB 168 |
HB 188 Sectional Version N.PDF |
HHSS 4/9/2009 3:00:00 PM |
HB 188 |