Legislature(1997 - 1998)

02/11/1997 03:05 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        JOINT SENATE/HOUSE HEALTH, EDUCATION AND SOCIAL                        
                  SERVICES STANDING COMMITTEE                                  
                       February 11, 1997                                       
                           3:05 p.m.                                           
                                                                               
                                                                               
 SENATE MEMBERS PRESENT                                                        
                                                                               
 Senator Gary Wilken, Chairman                                                 
 Senator Loren Leman, Vice Chairman                                            
 Senator Johnny Ellis                                                          
                                                                               
 SENATE MEMBERS ABSENT                                                         
                                                                               
 Senator Lyda Green                                                            
 Senator Jerry Ward                                                            
                                                                               
 HOUSE MEMBERS PRESENT                                                         
                                                                               
 Representative Con Bunde, Chairman                                            
 Representative Joe Green, Vice Chairman                                       
 Representative Al Vezey                                                       
 Representative Brian Porter                                                   
 Representative Fred Dyson                                                     
 Representative J. Allen Kemplen                                               
                                                                               
 HOUSE MEMBERS ABSENT                                                          
                                                                               
 Representative Tom Brice                                                      
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 ALASKAN CHILDREN'S TRUST FUND UPDATE                                          
                                                                               
 HOUSE BILL NO. 54                                                             
 "An Act establishing the Alaska education technology program; and             
 providing for an effective date."                                             
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE BILL NO. 1                                                              
 "An Act relating to taxes on cigarettes and tobacco products; and             
 providing for an effective date."                                             
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 (*  First Public Hearing)                                                     
                                                                               
 BILL:  HB 54                                                                
 SHORT TITLE: EDUCATION TECHNOLOGY PROGRAM                                     
 SPONSOR(S): REPRESENTATIVE(S) KOTT,Grussendorf,Kemplen                        
                                                                               
 JRN-DATE     JRN-DATE             ACTION                                      
 01/13/97        42    (H)   PREFILE RELEASED 1/10/97                          
 01/13/97        42    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/13/97        42    (H)   HEALTH, EDUCATION & SOCIAL SERVICES               
 01/30/97              (H)   HES AT  3:00 PM CAPITOL 106                       
 01/30/97              (H)   MINUTE(HES)                                       
 01/31/97       206    (H)   COSPONSOR(S): KEMPLEN                             
 02/05/97              (H)   HES AT  4:00 PM CAPITOL 120                       
 02/07/97              (H)   HES AT  4:00 PM CAPITOL 120                       
 02/11/97              (H)   HES AT  3:00 PM CAPITOL 106                       
                                                                               
 BILL:  HB 1                                                                 
 SHORT TITLE: CIGARETTE AND TOBACCO TAX                                        
 SPONSOR(S): REPRESENTATIVE(S) BUNDE,Ivan,Croft,Porter,Hudson                  
                                                                               
 JRN-DATE     JRN-DATE             ACTION                                      
 01/13/97        26    (H)   PREFILE RELEASED 1/3/97                           
 01/13/97        26    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/13/97        27    (H)   STATE AFFAIRS, HES, FINANCE                       
 01/21/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/21/97              (H)   MINUTE(STA)                                       
 01/28/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/28/97              (H)   MINUTE(STA)                                       
 01/30/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/30/97              (H)   MINUTE(STA)                                       
 02/04/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 02/04/97              (H)   MINUTE(STA)                                       
 02/05/97       237    (H)   STA RPT  CS(STA) 4DP 1DNP                         
 02/05/97       237    (H)   DP: JAMES, ELTON, BERKOWITZ, IVAN                 
 02/05/97       237    (H)   DNP:  VEZEY                                       
 02/05/97       237    (H)   FISCAL NOTE (STA CMTE/REV)                        
 02/05/97       237    (H)   REFERRED TO HES                                   
 02/07/97       276    (H)   COSPONSOR(S): HUDSON                              
 02/11/97              (H)   HES AT  3:00 PM CAPITOL 106                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 ARLISS STURGULEWSKI                                                           
 7957 Sheldon Jackson                                                          
 Anchorage, Alaska  99508                                                      
 Telephone:  (907) 561-5286                                                    
 POSITION STATEMENT:  Presented update on the Alaska Children's                
                      Trust                                                    
                                                                               
 MORRIS THOMPSON                                                               
 2008 Capitol Avenue                                                           
 Fairbanks, Alaska                                                             
 Telephone:  (907) 452-4955                                                    
 POSITION STATEMENT:  Presented update on the Alaska Children's                
                      Trust                                                    
 CAROL H. BRICE, President                                                     
 Family Training Associates                                                    
 P.O. Box 81016                                                                
 Fairbanks, Alaska  99708                                                      
 Telephone:  (907) 479-7461                                                    
 POSITION STATEMENT:  Presented update on the Alaska Children's                
                      Trust                                                    
                                                                               
 KAREN PERDUE, Commissioner                                                    
 Department of Health and Social Services                                      
 P.O. Box 110601                                                               
 Juneau, Alaska  99811-0601                                                    
 Telephone:  (907) 465-3030                                                    
 POSITION STATEMENT:  Presented update on the Alaska Children's                
                      Trust and testified in support of CSHB 1(STA)            
                                                                               
 REPRESENTATIVE PETE KOTT                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 204                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3777                                                    
 POSITION STATEMENT:  Sponsor of HB 54                                         
                                                                               
 PAT CARR, Health Programs Manager                                             
 Central Office                                                                
 Division of Public Health                                                     
 Department of Health and Social Services                                      
 P.O. Box 110610                                                               
 Juneau, Alaska  99811-0610                                                    
 Telephone:  (907) 465-8618                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 LOIS IRVIN                                                                    
 167 West Bayview Avenue                                                       
 Homer, Alaska  99603                                                          
 Telephone:  (907) 235-7172                                                    
 POSITION STATEMENT:  Testified in support of the concept of                   
                      CSHB 1(STA)                                              
                                                                               
 KEITH EVANS                                                                   
 Dillingham City Schools                                                       
 P.O. Box 170                                                                  
 Dillingham, Alaska  99576                                                     
 Telephone:  (907) 842-5223                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 VEVA BECKER, Educator                                                         
 American Cancer Society                                                       
 4137 Rosebud Lane                                                             
 Fairbanks, Alaska  99709                                                      
 Telephone:  (907) 479-6968                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
 ANNE HARRISON, Nurse Practioner                                               
 3270 Rosie Creek Road                                                         
 Fairbanks, Alaska  99709                                                      
 Telephone:  (907) 479-3594                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 REX GARVER                                                                    
 P.O. Box 1564                                                                 
 Sitka, Alaska  99835                                                          
 Telephone:  (907) 747-3304                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 SHARI SMOLE                                                                   
 2005 Tudor Hills Court                                                        
 Anchorage, Alaska  99507                                                      
 Telephone:  (907) 561-0517                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 DELISA CULPEPPER, President                                                   
 Alaska Public Health Association                                              
 1874 Wickersham Drive                                                         
 Anchorage, Alaska  99507                                                      
 Telephone:  (907) 563-7425                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 ANNE MARIE HOLEN, Member                                                      
 Alaska Native Health Board                                                    
 11241 Latta Circle                                                            
 Anchorage, Alaska  99516                                                      
 Telephone:  (907) 346-2789                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 ERIC MEYERS                                                                   
 2834 Knik Avenue                                                              
 Anchorage, Alaska  99517                                                      
 Telephone:  (907) 248-3366                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 PATTI TRUESDELL, Member                                                       
 Soldotna Middle School Parent Teacher Student Association                     
 P.O. Box 1452                                                                 
 Soldotna, Alaska  99669                                                       
 Telephone:  (907) 262-4404                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 JUDY DOWNS                                                                    
 1616 Tanaga                                                                   
 Kenai, Alaska  99611                                                          
 Telephone:  (907) 262-9137                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 ELI WAITE, Student                                                            
 825 A Street                                                                  
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 586-2064                                                    
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 CRISTIN MARTINEAU                                                             
 P.O. Box 21685                                                                
 Juneau, Alaska  99802                                                         
 Telephone:  No telephone number given                                         
 POSITION STATEMENT:  Testified in support of CSHB 1(STA)                      
                                                                               
 BOB BARTHOLOMEW, Deputy Director                                              
 Income and Excise Audit Division                                              
 Department of Revenue                                                         
 P.O. Box 110420                                                               
 Juneau, Alaska  99811-0420                                                    
 Telephone:  (907) 465-2320                                                    
 POSITION STATEMENT:  Testified on CSHB 1(STA)                                 
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-8, SIDE A                                                             
 Number 0000                                                                   
                                                                               
 CHAIRMAN CON BUNDE called the Joint House and Senate Health,                  
 Education and Social Services Committee meeting to order at 3:05              
 p.m.  Senate members present at the call to order were Senators               
 Wilken, Ellis and Leman. Representative members present at the call           
 to order were Representatives Bunde, Green, Vezey, Porter, Kemplen            
 and Brice.  Representative Dyson joined the committee meeting at              
 3:13 p.m.  Senator Ward, Senator Green and Representative Brice               
 were absent.  A quorum was present.  This meeting was                         
 teleconferenced to Homer, Dillingham, Sitka, Fairbanks, Anchorage             
 and Kenai.                                                                    
                                                                               
 CHAIRMAN BUNDE said the Joint committee would receive an update on            
 the Alaska Children's Trust Fund and afterward the House committee            
 would address a subcommittee report on HB 54 and then address HB 1.           
                                                                               
 ALASKAN CHILDREN'S TRUST FUND UPDATE                                        
                                                                               
 Number 0108                                                                   
                                                                               
 ARLISS STURGULEWSKI said the members of the Alaska Children's Trust           
 were here today to ask for the committee's general support for                
 issues affecting children, not to make a specific request.  She               
 said members of the trust include; Carol H. Brice, Family Training            
 Associates; Morris Thompson, President and CEO of Doyon Limited;              
 Mark Williams, Alaska Children's Trust Chair, Vice-Chair of Carr              
 Gottstein Foods Company; Attorney General Bruce M. Botelho;                   
 Commissioner Shirley Holloway of the Department of Education; and             
 Commissioner Karen Perdue of the Department of Health and Social              
 Services.  She said Nila Rinehart serves half time as staff for the           
 Children's Cabinet and half time as staff for the Alaska Children's           
 Trust and that she was here at today's meeting.  She said it is               
 great to have Ms. Rinehart work in the two sectors because it gives           
 an inter-relationship between the various programs.                           
                                                                               
 Number 0233                                                                   
                                                                               
 MS. STURGULEWSKI said the Alaska Children's Trust was formed back             
 in 1988, but it had a quiet life as it had no money.  Last year $6            
 million was made available to the trust and is now being managed by           
 the Department of Revenue (DOR) with Wilson Condon acting as                  
 treasurer for the Alaska Children's Trust.  She said the                      
 legislation mandates, through the retention of capital, that the              
 fund be inflation-proof.  The method DOR is using in investing will           
 give the Alaska Children's Trust slightly better interest than the            
 rate of inflation.  She said the corpus of the trust will be                  
 available for expenditure.                                                    
                                                                               
 MS. STURGULEWSKI said the primary purpose is to work in partnership           
 and collaboration with communities, private business and government           
 to reduce and prevent child abuse as well as promoting healthy                
 families and communities.  The Alaska Children's Trust will be                
 looking at collaborative efforts.  She said she would not go into             
 a lot of detail about the goals and how they were achieved, but               
 mentioned that a lot of thought was spent on what to do.  She said            
 the Alaska Children's Trust will be a year old in April and it has            
 taken a lot of time to get to this point.  The trust members were             
 careful as to selecting where the Alaska Children's Trust would be            
 heading and what they would do.                                               
                                                                               
 Number 0353                                                                   
                                                                               
 MS. STURGULEWSKI said currently under formation now, working for a            
 5013 status, is a group called the Friends of the Alaska Children's           
 Trust.  This group will be the major fundraising arm for the trust            
 and they have already received some private corporate grants;                 
 $50,000 in two year increments from Sohio and BP (Alaska) Inc.  She           
 said there is hope that this group will be able to raise major,               
 private funds from individuals, corporations and various endowment            
 trusts throughout the country.  This is an area where the                     
 legislature could assist the Alaska Children's Trust if there are             
 other additional funds that could be made available.  She said the            
 Alaska Children's Trust's budget will be proposed during this                 
 legislative session.  They are looking at $250,000 to $290,000                
 which will be put out in grants, but it will need action of the               
 legislative body as well as of the operating budget.                          
                                                                               
 Number 0458                                                                   
                                                                               
 MORRIS THOMPSON, President and CEO, Doyon Limited, spoke briefly              
 about why we need the Alaska Children's Trust and cited some                  
 statistics.  He said these numbers were unfortunate, but very real            
 and need to be addressed by communities, by families, individuals,            
 by leaders and hopefully by the state.  He referred to a handout,             
 located in the committee file, titled, "Alaska Children's Trust,              
 Annual Report 1996."  He said in the three categories of physical,            
 sexual abuse and neglect the state of Alaska is so far out in front           
 that it is horrendous.  He read, "In children substantiated                   
 indicated reports of abuse and neglect, Alaska is 36.6 per thousand           
 children in the population.  The median is 14, the low is 2."                 
                                                                               
 MR. THOMPSON said it is clear that this is a problem that needs to            
 be fixed by families, by communities, by citizens, by                         
 municipalities and by leaders.  He said every year 1,400 children             
 are arrested for offenses including assault, rape, robbery and drug           
 sales.  He said 2,200 children drop out of school and more than               
 10,000 preschoolers live below the poverty level.  Alaska leads the           
 nation in per capita cases of child sexual abuse and neglect.  He             
 said we must work collectively, hopefully with other agencies, to             
 reduce those numbers.  He said on social indicators, we do not want           
 to be constantly leading the nation in these areas.                           
                                                                               
                                                                               
 MR. THOMPSON said thanks to the legislature there is $6 million in            
 the corpus to be managed by the DOR as a trust fund.                          
                                                                               
 Number 0673                                                                   
                                                                               
 MS. STURGULEWSKI mentioned that Robert Storer, the investment                 
 officer for the DOR, was available to provide information on the              
 management of the trust fund.                                                 
                                                                               
 Number 0682                                                                   
                                                                               
 CAROL H. BRICE, President, Family Training Associates, said she has           
 been involved in parenting issues for almost 15 years and added               
 that it is the toughest job in town with little training available.           
 She said she is excited about where the Alaska Children's Trust can           
 go and wanted to tell the committee where they are today and what             
 they see happening in the next couple of months.  By March 1, 1997,           
 the first proposal, the first request for proposal (RFP), the first           
 invitation for people to look carefully at what is going on in your           
 community, what do you see that might be a solution dealing with              
 issues related to children and whether you want to talk with the              
 Alaska Children's Trust about them will occur.  She said the                  
 proposal is only going to be ten pages long, which is very                    
 different from a lot of RFPs.                                                 
                                                                               
 MS. BRICE said Alaska Children's Trust hopes to reach out to the              
 smaller communities, to the people that are right there in the                
 community, who are able to say what is going on with their kids and           
 what they think might be able to be done to help.  If it is a small           
 project, the Alaska Children's Trust is willing to give anywhere              
 from $10,000 to $50,000 to support it.  She said the Alaska                   
 Children's Trust will have between $250,000 and $290,000 to award.            
 She said they expected to have the RFPs back by mid-May, take a               
 look at them, address the issues, consider them and by July 1,                
 1997, the trust will give their first awards.  She said the Alaska            
 Children's Trust is not in competition with the state and other               
 programs.  Hopefully the Alaska Children's Trust will be                      
 supplemental by looking at issues that have never been able to be             
 funded and help people think creatively about what can happen.                
                                                                               
 Number 0811                                                                   
                                                                               
 MS. BRICE remembered, as an example, a situation that occurred when           
 she was serving on the Health and Social Services Commission in               
 Fairbanks a few years ago.  A young man came to their office and              
 said for almost a year he had been teaching school children boxing            
 in the Northrup Building.  He requested $10,000 to send some of               
 those kids to Juneau to compete in a boxing tournament.  It was a             
 very non-traditional proposal that he made, the paper work was not            
 adequate at all, but they went into session, considered it and gave           
 him his $10,000.  She said this is an example of somebody dealing,            
 in a practical way, with youth.  Youth that otherwise were on the             
 streets.  She said, today, that is an up and going organization               
 that has a lot of community support.                                          
                                                                               
 Number 0870                                                                   
                                                                               
 MS. BRICE said the Alaska Children's Trust will not fund any                  
 program 100 percent.  They will fund it 75 percent the first year.            
 If they come back to the Alaska Children's Trust for a second year            
 with another level of their program that they want the trust to               
 consider, again the trust will fund 75 percent.  The third and                
 fourth year the funding is down to 50 percent and the fifth and               
 sixth year the funding is down to 25 percent.  She said there is              
 going to have to be collaboration, networking in the programs and             
 that the Alaska Children's Trust is not a give-away program.  She             
 said there are people out there doing good things and we need to              
 collaborate and build on services that are already being offered.             
                                                                               
 Number 0911                                                                   
                                                                               
 MS. BRICE said, in her mind, children are the indicators of the               
 health of a community.  The statistics, Mr. Thompson referred to,             
 show us that we don't have a very healthy community and said it is            
 of great concern to her.  She hoped that when she came to Juneau in           
 succeeding years to talk about children's issues that when she                
 meets people in the hall they also are talking about children's               
 issues.                                                                       
                                                                               
 Number 0916                                                                   
                                                                               
 MS. STURGULEWSKI said the Alaska Children's Trust is on their way,            
 but want to keep in frequent communication with the legislature so            
 that it is known what is being done.  She said they don't want the            
 work of the Alaska Children's Trust duplicated in the                         
 Administration.  She said they'd like to see some innovative                  
 programs, people reaching out and finding ways to deal with some of           
 these issues.  She referred to articles in "Time", "U.S. News and             
 World Report" and said there is an explosion of what happens to               
 kids in that zero to two years of age.  She said these years                  
 determine what they are going to be intellectually for their life.            
                                                                               
 Number 0962                                                                   
                                                                               
 CHAIRMAN BUNDE thanked the witnesses and said the committee is                
 often faced with problems and challenges.  He said it is nice that            
 someone has taken the ball and started to run with it.  He added              
 that the committee is pleased that the trust is coming back in just           
 a year and given the committee some positive results.  He said, as            
 the legislature often does, the trust will be rewarded by being               
 given even higher expectations.                                               
                                                                               
 Number 0989                                                                   
                                                                               
 MS. STURGULEWSKI said in many of the communities, certainly in the            
 community that she is from, organizations are not seeing as many              
 federal or state dollars coming through.  She said, as a result,              
 there is a lot more collaboration and working together happening in           
 the community where the need is, a better utilization of resources.           
 She said the biggest challenge is how to get people more involved,            
 whether it is people in schools or getting them to help with other            
 existing programs.                                                            
                                                                               
 Number 1027                                                                   
                                                                               
 CHAIRMAN BUNDE thanked all three of the people who made the                   
 presentation for their time and energy because they have hit the              
 nail on the head when they said you do not solve these problems by            
 throwing money on them.  He said the personal involvement and the             
 buy-in is going to make progress in these type of problems.                   
                                                                               
 Number 1042                                                                   
                                                                               
 CHAIRMAN GARY WILKEN said he has been briefed on a lot of things              
 since November 5, 1996, and one of the most exciting ones was when            
 Ms. Brice came to him and discussed the Alaska Children's Trust.              
 He said he embraced the trust as an Alaskan and hoped that, through           
 the legislature, he can help.  He hoped that sometime in the future           
 he would be able to embrace the results as well.  He said he would            
 admonish them and encourage them, as they go through the selection            
 process for the first couple of years, to make sure that they make            
 the right choices.  He said the way we're going to measure the                
 results and the worth of their project is by what happens in those            
 first few years.  He said the first decisions will be the most                
 difficult as you are laying some new foundations for youth.  It is            
 an exciting concept and a lot of good things will come out of it if           
 it is handled right.                                                          
                                                                               
 Number 1095                                                                   
                                                                               
 MS. STURGULEWSKI said there is a self-evaluation within the Alaska            
 Children's Trust.  She said the toughest thing will be to prove               
 that the Alaska Children's Trust works because they are doing                 
 little things, spread broadly which can be more effective.                    
                                                                               
 Number 1115                                                                   
                                                                               
 REPRESENTATIVE FRED DYSON referred to the presentation done by the            
 Alaska Children's Trust at the Children's Caucus.  He wanted to               
 identify with both chairs' comments.                                          
                                                                               
 Number 1137                                                                   
                                                                               
 REPRESENTATIVE BRIAN PORTER also wanted to identify with the                  
 chairs' comments.                                                             
                                                                               
 Number 1165                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN said he hoped that in the Alaska                     
 Children's Trust presentation to the Children's Caucus the lack of            
 majority members was not a deterrent and said there was a prior               
 commitment.  He said the legislature takes these issues seriously.            
                                                                               
 REPRESENTATIVE GREEN said he watched a film by a psychologist which           
 said if we can change or help a child during their formative years,           
 we can save tons and tons of money because that child won't get               
 into a problem lifestyle.                                                     
                                                                               
 Number 1202                                                                   
                                                                               
 MS. STURGULEWSKI said the chairman of the Children's Caucus was               
 careful to point out that fact that not all of the legislators                
 could be there.  She said she was impressed by the number that                
 attended the caucus and added that it is a good way to get into a             
 number of these issues, not just the issues involving the Alaska              
 Children's Trust.                                                             
                                                                               
 Number 1228                                                                   
                                                                               
 CHAIRMAN BUNDE recognized Commissioner Perdue and asked her if she            
 wanted to make some comments.                                                 
                                                                               
 Number 1243                                                                   
                                                                               
 KAREN PERDUE, Commissioner, Department of Health and Social                   
 Services, said, because of her position, she appreciates the                  
 members of the Alaska Children's Trust and their efforts.  She said           
 the fact that the money is going to the communities instead of                
 state entities is doubly important.  She wanted to thank them for             
 all their work and apologized for not being at the Children's                 
 Caucus because there was a bomb scare at the state office building.           
                                                                               
 Number 1280                                                                   
                                                                               
 CHAIRMAN BUNDE thanked the trust members again and announced a                
 brief at ease at 3:27 p.m.  The committee meeting resumed at 3:28             
 p.m.  He stated that the Senate Health, Education and Social                  
 Services Committee members had left with the exception of Senator             
 Wilken and reconvened the House Health, Education and Social                  
 Services meeting at 3:28 p.m.                                                 
 HB 54 - EDUCATION TECHNOLOGY PROGRAM                                        
                                                                               
 Number 1280                                                                   
                                                                               
 CHAIRMAN BUNDE said that CSHB 54(HES), "An Act establishing the               
 Alaska education technology program; and providing for an effective           
 date.", was put into a subcommittee on Thursday.  He said it is the           
 chair's intention that the committee will hear the subcommittee               
 report as he is anticipating some amendments to come from this                
 report.  He said the committee will not act upon the bill today.              
                                                                               
 Number 1381                                                                   
                                                                               
 REPRESENTATIVE GREEN said Representative Kemplen and he met twice             
 last week in a subcommittee for CSHB 54(HES).  He said                        
 Representative Vezey was unable to attend either meeting.  At those           
 meetings representatives from the Department of Education (DOE),              
 Department of Revenue (DOR) and some non-agency people came to                
 discuss CSHB 54(HES).  He said they discussed many things and                 
 referred to a report titled, "HESS Subcommittee for HB 54 -                   
 Education Technology Program Summary."                                        
                                                                               
 REPRESENTATIVE GREEN said one of the questions they looked at was             
 what if companies, who are currently paying taxes in the state of             
 Alaska, were to make donations to this fund.  He referred to                  
 examples presented by Mr. Bartholomew from the DOR in a chart                 
 located in the committee file.  He said the first scenario looked             
 at was what if all 16 percent of Alaskan corporations, who paid               
 income tax, were to make contributions in the amount of $3.7                  
 million.  He said the result was that it would have a negative                
 impact on the general fund with a decrease of $220,440 per year.              
 Another scenario assumed half that much in contributions and said             
 there is almost a linear association between the two so that if               
 other people want to make other assumptions as to how much money              
 might be contributed, the adversity to the general fund could be              
 measured.                                                                     
                                                                               
 Number 1488                                                                   
                                                                               
 REPRESENTATIVE GREEN said an overall agreement from the                       
 participants in the subcommittee was that if an education                     
 technology fund was generated, any interest associated with the               
 education technology fund should stay with that fund rather than              
 going into the general fund.  He said there was an indication of              
 the possibility of local matching grants.  He said they checked               
 with Representative Kott, the sponsor of HB 54, who said this                 
 possibility was agreeable to him.                                             
                                                                               
 Number 1516                                                                   
                                                                               
 REPRESENTATIVE GREEN said the other discussions were covered in the           
 report.  He said there were two recommended changes to CSHB
 54(HES), listed on page two.  He said the subcommittee felt that              
 libraries should be included in the list of fund recipients and               
 that there would be investment earnings in the fund that should               
 stay in the fund.                                                             
                                                                               
 REPRESENTATIVE AL VEZEY asked for clarification on the table                  
 regarding the effect on the general fund.                                     
                                                                               
 Number 1556                                                                   
                                                                               
 REPRESENTATIVE GREEN said the amount of earnings that a company has           
 was broken down in this litany of four different types of                     
 corporations.  He said estimates were made that these companies               
 would make contributions to the fund.  He said there is no way to             
 know, in advance, how much money might be donated to a fund.                  
 Without this knowledge there was no way to know how the donations             
 to this fund would affect the general fund.  He said Mr.                      
 Bartholomew made two different assumptions and based on them he               
 determined the loss of taxes to the general fund.  He said this               
 chart indicated a nearly linear relationship so that you could                
 enter your estimate of what the contribution might be and come up             
 with the effect on the general fund.                                          
                                                                               
 Number 1638                                                                   
                                                                               
 CHAIRMAN BUNDE asked that these questions be addressed to the                 
 subcommittee members after the meeting.  He asked Representative              
 Kott to comment on the two proposed changes.                                  
                                                                               
 Number 1648                                                                   
                                                                               
 REPRESENTATIVE PETE KOTT, sponsor of HB 54, said he had been                  
 informed by his staff, who attended the subcommittee meeting, and             
 said he understands the changes that are being suggested.  He said            
 he has no problem with the changes as the intent of CSHB 54(HES)              
 remains, even with the suggested amendments.  He said the proposed            
 amendments clarify the intent and that he would go along with them.           
 Number 1690                                                                   
                                                                               
 REPRESENTATIVE VEZEY asked what can be accomplished with CSHB
 54(HES) that can't be accomplished under existing law.                        
                                                                               
 Number 1700                                                                   
                                                                               
 REPRESENTATIVE KOTT said, it was his understanding, that the DOE              
 needs a vehicle in which monies can be contributed.  He said the              
 whole purpose of CSHB 54(HES) is to provide that vehicle, that                
 platform, as well as articulating some of the requirements as to              
 how the money will be distributed or identifying some of the pre-             
 requisites for acquiring a grant from a library or a school                   
 district's perspective.                                                       
                                                                               
 Number 1725                                                                   
                                                                               
 CHAIRMAN BUNDE asked if there would be a parallel between CSHB
 54(HES) and the Alaska Children's Trust fund.  He asked if these              
 things were similar.                                                          
                                                                               
 Number 1733                                                                   
                                                                               
 REPRESENTATIVE KOTT said he felt they would be similar to a large             
 extent, with the exception that there is no certainty that there              
 would be any money contributed to the education technology fund.              
 He said, "Although I understand from staff that the Department of             
 Education has a grant in hand from the federal government.  That is           
 my understanding.  I'm not sure how they are going to execute the             
 grant.  I'm not sure the strings that might be associated with it.            
 I understand it is for technology."                                           
                                                                               
 Number 1764                                                                   
                                                                               
 CHAIRMAN BUNDE said he would want someone here from the DOE as it             
 would influence his opinion about CSHB 54(HES).                               
                                                                               
 Number 1783                                                                   
                                                                               
 REPRESENTATIVE GREEN said there was a question about payment of               
 staff services by the fund and said he could address this question            
 later.  He said the subcommittee found that they could go both ways           
 with this.  He presented information about a computer company and             
 said he would be happy to share it with the committee.                        
                                                                               
 Number 1881                                                                   
                                                                               
 CHAIRMAN BUNDE asked the committee to peruse the subcommittee                 
 report and asked them to be prepared to take action on CSHB 54(HES)           
 on Thursday, February 13, 1997.                                               
 HB 1 - CIGARETTE AND TOBACCO TAX                                            
 Number 1892                                                                   
                                                                               
 CHAIRMAN BUNDE said he was the sponsor of HB 1 and as such would              
 turn the chair responsibilities over to Vice-Chair Green in order             
 to present HB 1.  He said HB 1, "An Act relating to taxes on                  
 cigarettes and tobacco products; and providing for an effective               
 date.", now CSHB 1(STA) has the misfortune of being labeled the               
 tobacco tax bill.  He said CSHB 1(STA) uses the current tobacco tax           
 as a vehicle.  He wished he could call CSHB 1(STA) an economic                
 barrier user fee bill because this is how he views the bill.  He              
 hesitantly introduced this legislation, more than a year ago at the           
 request of some constituents, because of concerns over tax and                
 spend legislation and doubts about whether or not social                      
 engineering works.  He said he had the same concerns that probably            
 many others have shared.                                                      
                                                                               
 CHAIRMAN BUNDE said he needed to be educated as to the                        
 effectiveness of an increase in cost of nicotine.  He said he is              
 convinced that raising the cost of tobacco does work.  He said the            
 experience in Canada, particularly western Canada, has indicated              
 that the use goes down 4 percent overall for the every 10 percent             
 increase in price.  He said the use among young people goes down              
 even more dramatically than that, some say as high as 30 percent.             
 He said we can argue about decimal points but the use of nicotine             
 is related to price, it is price sensitive.                                   
                                                                               
 Number 2005                                                                   
                                                                               
 CHAIRMAN BUNDE said the other aspect of CSHB 1(STA) is the user               
 fee.  Tobacco products cost the state of Alaska about $200 million            
 a year.  He suggested that those who chose to use nicotine perhaps            
 have an obligation to help pay their expenses to the state.  He               
 said this is purely a voluntary task.  If you do not smoke, you do            
 not pay the tax.  If you do smoke, you do cost the state of Alaska            
 hundreds of thousands, if not millions of dollars.                            
                                                                               
 Number 2055                                                                   
                                                                               
 CHAIRMAN BUNDE said the evidence behind increasing the cost of                
 tobacco encouraged him to introduce CSHB 1(STA).  He wanted to                
 address a couple of items that people brought up which are valid              
 concerns, to share them for the committee's consideration.  One of            
 these concerns is that if we increase the cost on cigarettes                  
 particularly, although all tobacco products will be taxed, we will            
 be encouraging smuggling.  He heard people from Quik Stops suggest            
 that, when they are subjected to armed robbery, people will be                
 taking cartons and cartons of cigarettes instead of money.  He is             
 suggesting that if we have such a problem that armed robbery is one           
 of our concerns in dealing with the problem that the use of                   
 nicotine generates in our society, we have a bigger problem than              
 just the cigarette tax and maybe that needs to be addressed in                
 another area.                                                                 
 CHAIRMAN BUNDE referred to concerns about social engineering and              
 said many of those people would not suggest removing government               
 prohibition from every drug that is available to us.  He said,                
 admittedly, tobacco is a legal drug and we can debate whether or              
 not this should be the case.  He said removing prohibitions is not            
 going to decrease the cost of tobacco and its impact on our                   
 society, particularly on our young people.  Increasing prohibitions           
 has a chance of decreasing use.                                               
                                                                               
 CHAIRMAN BUNDE said another concern that was addressed is that CSHB
 1(STA) would simply increase the amount of mail order access to               
 nicotine.  He said this is a valid concern, particularly with other           
 tobacco products.   People who have small, specialty shops are                
 concerned that if we increase the price of a $10 cigar to a $14               
 cigar, then people who are already tempted to buy through mail                
 order businesses will simply buy through the mail order and the               
 small business will go out of existence.  He said he is sensitive             
 to this concern and would not want to penalize local businesses.              
 He said if people can currently buy any tobacco product that they             
 want via the mail and not even pay our existing, paltry 29 cent               
 tax, maybe we have some problems with our basic system now.  He               
 said this concern about people flocking to a mail order access                
 could be addressed in other legislation.                                      
                                                                               
 Number 2148                                                                   
                                                                               
 CHAIRMAN BUNDE said there are comments that we need not tax pipe              
 tobacco or cigars because young people do not use them and it is              
 not causing the huge health problem.  Certainly from the people he            
 talked to in the dental community that are concerned about oral               
 cancer and a personal experience he had with people who have had              
 oral cancer, this is not the case.  He said, of the figures that he           
 has received, there is only 30 percent of the health impact from              
 cigars and pipe tobacco than there is from cigarettes.  He said the           
 most dramatic figure he had heard, is that people who die                     
 nationwide everyday from the use of all tobacco products is                   
 equivalent to the number of people who would die if two 747 jets              
 full of people crashed into each other.  He said we kill about 800            
 people a day with tobacco.  If we had that type of problem going on           
 in our society with our aircraft industry we would make huge                  
 changes, immediately.  He said we have that type of problem going             
 on in the nicotine industry, but we don't make huge changes because           
 the gestation period is so long.                                              
                                                                               
 Number 2201                                                                   
                                                                               
 CHAIRMAN BUNDE said his mother started smoking when she was 16 and            
 was encouraged to smoke because for women it was sophisticated and            
 calmed their nerves.  Almost all the heros in the movies, those               
 days, smoked.  She started smoking when she was 16, but it took               
 until she was age 50 for nicotine to kill her.  He suggested that             
 if those people who smoked today, died within a month, we probably            
 would address this problem a little more seriously.  He said we               
 have more time fortunately and that is why he is here.  The CSHB
 1(STA) is only one way to help address the nicotine addiction                 
 problem in our country.  It isn't the only answer, but one of them.           
                                                                               
 CHAIRMAN BUNDE said a number of people have contacted him from                
 businesses that sell nicotine and have expressed concern about the            
 impact on their business by CSHB 1(STA).  He said this tells him              
 that CSHB 1(STA) will work.  They are going to lose business                  
 because people will not smoke as much.  Every one of those people             
 who contacted him have said they do not want kids to smoke and said           
 he believes they are genuine in the wish, they do not want kids to            
 smoke.  He said if that is the case and we know in excess of 90               
 percent of people, who are addicted to nicotine, began smoking as             
 kids then people in the nicotine industry better look for a new               
 job.  Because if they, through some magic bullet, can stop kids               
 from starting to smoke tomorrow they would be out of business.                
                                                                               
 TAPE 97-8, SIDE B                                                             
 Number 0000                                                                   
                                                                               
 CHAIRMAN BUNDE said the committee did not have to act on CSHB
 1(STA) today and that they could devote the rest of the meeting to            
 public testimony.  On Thursday, February 13, 1997, CSHB 1(STA)                
 would be brought back up for action.                                          
                                                                               
 Number 0010                                                                   
                                                                               
 KAREN PERDUE, Commissioner, Department of Health and Social                   
 Services, said in the interest of time she would defer testimony              
 but asked the committee to let Ms. Carr talk briefly about some of            
 the statistics.  She said the Knowles Administration supports a $1            
 a pack tax and is ready to work with the committee in any way they            
 can.                                                                          
                                                                               
 Number 0102                                                                   
                                                                               
 PAT CARR, Health Programs Manager, Central Office, Division of                
 Public Health, Department of Health and Social Services, said she             
 is also supervising the tobacco prevention and control program.               
 She said tobacco usage is the number one cause of preventable death           
 and disease in the United States, accounting for over 419,000                 
 deaths each year.  Over 23 percent of deaths of Alaskans 35 years             
 of age and older, in 1991, were attributable to smoking.  She                 
 referred to a handout packet titled, "Tobacco Tax Bill Analysis,"             
 which was located in the committee file.                                      
                                                                               
 MS. CARR referred to page 3 of the handout and said it shows the              
 percentage of deaths in the United States from cigarette use,                 
 accounting for over 400,000 deaths per year.  This figure is more             
 than the combined total of burns, AIDS, suicides and other common             
 causes of preventable death.  In Alaska there are over 1,400 deaths           
 per year from cigarette smoking which is higher than from many                
 other preventable cause of death.  She clarified that these deaths            
 were just from cigarette smoking, not other forms of tobacco                  
 products.                                                                     
                                                                               
 MS. CARR said, based on the youth behavior risk survey and the                
 adult behavior risk factor survey, 83 percent of adult smokers                
 report that they started smoking before the age of 20.  In this way           
 we see that nicotine addiction is a pediatric disease.  She said 21           
 percent of Alaskan high school students reported that they smoked             
 regularly in the last month, this means 20 out of the past 30 days.           
 She said 25 percent of Alaskan middle school age students reported            
 smoking at least one cigarette in the last month.                             
                                                                               
 Number 0249                                                                   
                                                                               
 MS. CARR said surveys, conducted in 1996 under the supervision of             
 the Department of Health and Social Services (DHSS), showed 64                
 percent of our vendors complied with tobacco restriction laws which           
 meant that 36 percent do not comply.  She said the federal                    
 government mandates an 80 percent compliance rate by the year 2000            
 under the Synar Amendment.  The state of Alaska stands to lose a              
 substantial amount of our substance abuse preventive and treatment            
 block grant if we do not comply with this amendment.  Tobacco                 
 vendors refused to sell to 14 to 15-year-olds 71 percent of the               
 time, while 16 to 17-year-olds were refused 58 percent of the time.           
                                                                               
 Number 0293                                                                   
                                                                               
 MS. CARR said DHSS is greatly concerned about the high rate of                
 tobacco use among Alaskan Natives.  Today Alaskan Natives have some           
 of the highest rates of tobacco use in the world with 47 percent              
 for men and 39 percent for women.  Alaskan Natives account for 23             
 percent of smoking related deaths while they account for only 17              
 percent of the state's population.  Alaskan Natives have the                  
 highest cancer mortality rate of any Indian Health Service Area in            
 the country.  The lung cancer rate among Alaskan Native women is              
 three times the national average and tobacco use among Alaskan                
 Native youth is higher than non-Native youth.                                 
                                                                               
 Number 0330                                                                   
                                                                               
 MS. CARR referred to page 9 of the handout and said it shows a                
 comparison between United States high school students, Alaskan                
 Native students and Alaskan students as a whole with comparative              
 use rates.  She said this again shows the high rate of youth use in           
 our state as well as an exorbitantly high rate among Alaskan Native           
 youth.  She said 41 percent of Alaskan Native boys and 32 percent             
 of Alaskan Native girls were using smokeless tobacco weekly.  Among           
 the boys, 45 percent started using tobacco before the age of 8.               
                                                                               
 MS. CARR said DHSS is concerned about the health impact as well as            
 the economic drain.  Total direct medical costs for smoking related           
 illnesses for Alaskans aged 35 years of age and older, in 1993, was           
 over $96 million.  She said $23 million of the direct medical care            
 costs for smoking related illness was paid by Medicaid in Alaska              
 which is a 50/50 match of state and federal monies.  Meanwhile, the           
 state collected only $15.6 million in cigarette tax revenues in               
 1993, this excludes the tax that currently exists on smokeless                
 tobacco.                                                                      
                                                                               
 MS. CARR said tobacco taxes are not new, the state of Alaska has              
 taxed tobacco since territorial days when there was a 5 cent per              
 pack tax levied on cigarettes to help fund school construction.               
 The current tax level of 29 cents per pack has been in place since            
 1989.  In 1989, Alaska ranked 17th among the 50 states including              
 the District of Columbia on the amount of tobacco tax levied.                 
 Currently, Alaska is ranked 28th among the states as other states             
 have increased their tobacco excise taxes.                                    
                                                                               
 Number 0427                                                                   
                                                                               
 MS. CARR referred to the chart on page 13 and said it shows the               
 comparative drop in use when the overall price on a pack of                   
 cigarettes increases.  She said the cigarette tax has not kept a              
 fair share of the total cost of cigarettes.  She said there is                
 currently a 24 cent federal tax on a pack of cigarettes.                      
                                                                               
 MS. CARR said tobacco taxes increase the overall cost of                      
 cigarettes, therefore it impacts consumption.  For every 10 percent           
 increase in cigarette prices, youth consumption will fall by at               
 least 10 percent.  For every 10 percent increase in cigarette                 
 prices, general consumption will fall by 4 percent.  At the current           
 adult smoking rates, approximately 18,000 of Alaskans currently               
 under the age of 18 will die prematurely of tobacco related                   
 illnesses.  All indications show that a $1.00 per pack tax increase           
 would reduce youth smoking in Alaska by an estimated 32 percent.              
 The tax would then prevent 5,700 premature deaths among Alaskans              
 under the age of 18.                                                          
                                                                               
 Number 0496                                                                   
                                                                               
 MS. CARR referred to the bar chart on page 16 and said it shows the           
 comparison of the United States current cigarette tax rates with              
 other industrial nations.  The United States having the lowest tax            
 rate at 57 cents, combined state and federal cigarette tax.  She              
 said the time is right for an increase in the cigarette tax, there            
 is broad public support, the groundwork is in place and 75 percent            
 of Alaskans surveyed in 1995 supported the $1.00 per pack tax.                
 This number reflected 75 percent of "conservatives", 75 percent of            
 "moderates", 73 percent of "liberals", and 55 percent of smokers.             
                                                                               
 MS. CARR  said this tax has wide national and state support.  Such            
 reputable individuals as C. Everett Koop, the former Surgeon                  
 General, the Alaska Tobacco Control Alliance which is made up of              
 over 200 individuals and represents over 50 organizations in the              
 state including membership from the Alaska Native Health Board, the           
 American Cancer Society and the American Heart Association, as well           
 as other well-known organizations.                                            
                                                                               
 Number 0569                                                                   
                                                                               
 VICE-CHAIR GREEN referred to testimony regarding the percentage of            
 tax in Canada with the correlating drop in youth smoking and then             
 referred to the chart that showed the Scandinavian countries having           
 a tax that is between six and eight times as expensive as the                 
 United States.  He asked if those countries showed a significant              
 reduction in youth smoking.                                                   
                                                                               
 Number 0600                                                                   
                                                                               
 MS. CARR said she is unfamiliar with those figures, but could get             
 them for him.  She said the chart he was referring to shows the               
 overall tax rate as compared to the actual cost of the cigarettes.            
                                                                               
 Number 605                                                                    
                                                                               
 LOIS IRVIN testified next via teleconference from Homer.  She said            
 a number of residents in Homer spoke in favor of HB 1 and HB 52.              
 She said she strongly supports the concept of CSHB 1(STA) and the             
 way in which it is presented, although she only found out a few               
 minutes ago that the bill was amended.  She asked what the change             
 was.                                                                          
                                                                               
 Number 0726                                                                   
                                                                               
 CHAIRMAN BUNDE said the bill number is the same, but CSHB 1(STA) is           
 a melding of HB 1 and HB 52.  The main difference of CSHB 1(STA) is           
 that it adopts the provisions of HB 52 as far as the dedication of            
 where the monies would go from the tax money raised.                          
                                                                               
 Number 0751                                                                   
                                                                               
 MS. IRVIN said the group she is involved in is anxious to get to              
 work to try and decrease access and tie it in to CSHB 1(STA).                 
                                                                               
 Number 0778                                                                   
                                                                               
 KEITH EVANS, Dillingham City Schools, testified next via                      
 teleconference from Dillingham.  He said people in the school do              
 not feel satisfied with the programs designed to help prevent                 
 students from starting to smoke.  It is obvious by the statistics             
 that the programs have not been successful.  He felt he could speak           
 on behalf of all the school administrators that whatever they could           
 do to prevent the problem would be time and money well spent.  In             
 Dillingham they are trying to focus on educating students on                  
 nicotine hazards and have worked with police to create something              
 quick and punitive in the way of fines for those who are caught.              
 Prevention, as far as they are concerned, is the best thing that              
 can be done.  He said the legislature is recognizing this through             
 their efforts.  He said while they encourage the $1.00 a pack                 
 increase, if the correlation is correct that increasing the cost of           
 tobacco decreases use, then he would strongly encourage the                   
 committee to amending the bill to tax at a higher rate.  He said              
 whatever can be done to prevent smoking should be done.  Education            
 programs can't compete with the glamour of the news media, so maybe           
 CSHB 1(STA) will be an answer to this problem.                                
                                                                               
 Number 0894                                                                   
                                                                               
 CHAIRMAN BUNDE stated that Representative Green and Representative            
 Porter are among the co-sponsors of CSHB 1(STA).                              
                                                                               
 Number 0922                                                                   
                                                                               
 VEVA BECKER, Educator, American Cancer Society, Fairbanks Interior            
 Unit, testified next via teleconference from Fairbanks.  She said             
 she is promoting a $1.00 per pack tax on tobacco.  The average age            
 that smokers first try a cigarette is at age 13, with many of them            
 becoming daily smokers by 14 or 15 years of age.  These kids who              
 might smoke one pack a day, can save $1,500 and could save twice as           
 much with the increased tax.  She said these young people have                
 undeveloped lungs and are having clogged arteries and respiratory             
 problems.  She made comparisons with tobacco use and the amount of            
 time that people are ill.                                                     
                                                                               
 MS. BECKER said tobacco companies spend $6 billion a year on                  
 advertising campaigns.  She mentioned that people with whom she               
 works with in the NorthStar Borough promote tobacco education,                
 smoking cessation classes and other attempts to decrease the amount           
 of smokers.                                                                   
                                                                               
 MS. BECKER said tobacco is the hardest drug to get off of.  She               
 said 80 percent of young people who smoke one pack or more of                 
 cigarettes will become regular smokers and 70 percent of youth who            
 smoke say that they would not have started if they could have a               
 choice today.  She said we must help parents stop smoking so that             
 they can help their child get off tobacco.  She said she is very              
 serious about this subject and CSHB 1(STA) will help her job as an            
 educator.                                                                     
                                                                               
 Number 1093                                                                   
                                                                               
 ANNE HARRISON, nurse practioner, testified next via teleconference            
 from Fairbanks.  She challenged the legislature to pass CSHB 1(STA)           
 without further ado.  She said the research couldn't be clearer,              
 tobacco companies will continue their unethical politicking and we            
 are all saturated with the quibbling surrounding this issue.  She             
 mentioned her work and experiences with people suffering from                 
 tobacco related illnesses.  She said we must do everything to                 
 prevent our youth from becoming addicted to this dangerous drug.              
 She asked that the legislature pass a high tobacco tax now in the             
 hope that it will discourage a few kids from using tobacco.                   
                                                                               
 Number 1139                                                                   
                                                                               
 REX GARVER testified next via teleconference from Sitka.  He said             
 nicotine is the most addictive drug known to our society and if it            
 was regulated there would be a lot of irritable tobacco users and             
 financially destitute manufacturers.  Although this would be best,            
 we are not ready for it.  He urged the committee to push forward              
 CSHB 1(STA) and pass the tax.  More people die from tobacco related           
 illness than any other preventable illness.  With over 500,000                
 people each year and tobacco manufacturers counting on 5,000                  
 underage smokers beginning their addiction every day, it is no                
 wonder that there are individuals wanting to curb tobacco                     
 consumption with the use of the increased tax.  With such a cost of           
 human life and Medicare dollars, it is high time that something be            
 done to compensate the healthy, who inevitably pay for their                  
 expenses.  Popularity, peer groups, power and prestige are all                
 elements of what the tobacco industry wants young people to                   
 associate with cigarettes.  In the shadow of this image, a dollar             
 a pack seems like a small price to pay.  Unfortunately it will be             
 for some, but for many others it won't be.                                    
                                                                               
 Number 1220                                                                   
                                                                               
 SHARI SMOLE, School Nurse, testified next via teleconference from             
 Anchorage.  She cited a personal experience with someone who                  
 suffered from a tobacco related illness.  She said the education              
 programs have not been successful.  Students she works with have              
 smoked for 5, 6, 7, and 8 years.  She said smoking cessation                  
 programs are an intervention when the dependence on nicotine is               
 already developed and it appears that it is too late.  She                    
 encouraged the committee to pass CSHB 1(STA) as it is one of the              
 most effective means to discourage use.  A dollar a pack tax                  
 strongly affects youth.  Tobacco related illnesses in adults start            
 with kids becoming addicted to nicotine.  She wished Alaska to be             
 number one in all of the states for this positive step of deterring           
 students.                                                                     
                                                                               
 Number 1336                                                                   
                                                                               
 DELISA CULPEPPER, President, Alaska Public Health Association,                
 testified next via teleconference from Anchorage.  She said the               
 public health community wanted to remind the committee that smoking           
 is the number one public health problem in the nation; it                     
 contributes to more heart disease, more cancer than any other thing           
 that can be changed by behavior and it contributes to more diseases           
 than can be attributed to genetic make-up.  She said we have a                
 chance to change these facts with this type of bill, an important             
 part of a multi-faceted plan.  She said CSHB 1(STA) is not the only           
 answer and the association is working on many other interventions             
 and prevention strategies.  She said CSHB 1(STA) can make a big               
 impact without spending a lot of money to do it.                              
                                                                               
 MS. CULPEPPER said the public health community across Alaska values           
 youth and urges the committee to pass a $1.00 a pack this year so             
 that we can begin our journey towards a healthy future.                       
                                                                               
 Number 1390                                                                   
                                                                               
 ANNE MARIE HOLEN, Member, Alaska Native Health Board and part of              
 the coalition spearheading this campaign, testified next via                  
 teleconference from Anchorage.  She said her parents were smokers             
 who quit after the surgeon general came out with the effects of               
 cigarette smoking.  Her parents also quit because they wanted to              
 use the money they saved to buy a camper.  She said the United                
 States is the only developed country which has allowed its                    
 cigarette taxes to fall in real terms since the dangers of smoking            
 were first revealed more than 30 years ago.  In 1966, federal and             
 state taxes together made up over 50 percent of the retail price of           
 cigarettes.  Today that amount has fallen to about 25 percent.  In            
 Alaska the state tax comprises 24 percent of the retail price of              
 cigarettes in 1964, today it is only 14 percent.  Meanwhile the               
 tobacco epidemic claims the lives of one out of five people in this           
 state.                                                                        
                                                                               
 MS. HOLEN said the tobacco industry is currently spending hundreds            
 of thousands of dollars to defeat the dollar per pack tobacco tax             
 increase and added that the reasons should be obvious.  She asked             
 the committee to support CSHB 1(STA) and help educate colleagues              
 about this opportunity to do the right thing for youth and                    
 families.                                                                     
                                                                               
 Number 1482                                                                   
                                                                               
 ERIC MEYERS testified next via teleconference from Anchorage.  He             
 said, "I am testifying today on my own behalf and as a member of              
 the public.  I would first like to comment on smokers' rights and             
 state that I am not a prohibitionist, nor do I support the ban of             
 tobacco products as is often alleged by members of the tobacco                
 industry.  I do believe that adults should have the right to smoke            
 cigarettes or to eat cigarettes for that matter.  But with regard             
 to smokers' rights, it must also be recognized that there are                 
 smoker responsibilities including responsibility for the enormous             
 economic cost that are not accurately reflected in the current low            
 price of tobacco products."                                                   
                                                                               
 MR. MEYERS continued, "Tobacco use costs the Alaskan economy                  
 hundreds of millions of dollars, while the current low level of               
 taxation only generates a tiny fraction of that.  So, when you hear           
 smokers' rights, you should think smokers' responsibility.  A $1.00           
 per pack tax being proposed is the very least we should insist                
 upon.  Also I would like to comment on the concern that has been              
 expressed by the tobacco industry, disingenously I would suggest,             
 about social engineering.  They offer that argument like a little             
 wind-up doll, but this argument doesn't really hold up well when              
 (indisc.--paper shuffling) consider (indisc.--paper shuffling)                
 closely. The legislature routinely uses tax policy to modify                  
 behavior.  There are any number of tax credits and tax incentive              
 proposals every year and every tax law has a behavioral effect.               
 Oil and gas taxes discourage oil and gas development.  Property               
 taxes discourage the buying and selling of real estate.  In light             
 of the fact that the enormous economic costs of tobacco use are not           
 currently reflected in the present price of tobacco is evident                
 that, in fact, the state already has in place a social engineering            
 policy regarding tobacco and that is because tobacco is undertaxed,           
 the effect is to artificially encourage the consumption by kids.              
 So, when you look, that when you hear the social engineering                  
 argument, you should look at it a little more closely and realize             
 that this is not really an argument that stands up well."                     
                                                                               
 MR. MEYERS said, "Finally, I'll simply say that in response to the            
 question, `Will it work?'  Yes, it will work.  It is very                     
 unambiguous, but the best testimony of all comes from the tobacco             
 industry itself.  If you look at their efforts and you look how               
 strongly they are fighting this, the fact that they have hired five           
 lobbyist who are spending hundreds of thousands of dollars to try             
 to kill this bill.  I would simply quote someone who is a long time           
 observer who says, who has observed the tobacco industry and its              
 practice when he states, `Only those measures which cause the                 
 tobacco industry to scream are likely to significantly reduce                 
 tobacco consumption.'  I urge you to support the $1.00 per pack tax           
 increase.  It is fair, it is reasonable, it will save thousands of            
 lives and has the overwhelmingly support of Alaska voters.  Thank             
 you very much."                                                               
                                                                               
 Number 1597                                                                   
                                                                               
 PATTI TRUESDELL, representing the Soldotna Middle School Parent               
 Teacher Student Association, testified next via teleconference from           
 Kenai.  She said the vote at the association meeting was that 100             
 percent supported CSHB 1(STA).  She said she sees this problem as             
 a four prong thing; as a parent she will do her job to educate her            
 daughter about the dangers of smoking, the schools will do what               
 they can, the local Tobacco Alliance will work on enforcement and             
 the legislature will do what they can to pass the tobacco tax.  She           
 said her daughter will have to fight peer pressure and pressure               
 from the media.  She said her daughter needs the adults to say what           
 they mean and mean what they say about tobacco.                               
                                                                               
 Number 1682                                                                   
                                                                               
 JUDY DOWNS testified next via teleconference from Kenai.  She said            
 she is a parent and works with the safe and drug free school                  
 program as well as the Tobacco Alliance and Big Brothers/Big                  
 Sisters.  She said CSHB 1(STA) is only one component of the effort            
 to stop kids from smoking.  The tobacco industry is targeting youth           
 as replacement smokers.  She mentioned the efforts at education in            
 her community and said we must work together, in collaboration, to            
 protect children.                                                             
                                                                               
 Number 1774                                                                   
                                                                               
 ELI WAITE, Student, was next to testify it.  He said passage of               
 CSHB 1(STA) will save lives.  He said he talked with other kids               
 that smoke right now who say they won't quit just because the tax             
 is raised $1.00 a pack.  Those kids do say that, when they were               
 starting, if there had been a higher price on cigarettes they                 
 wouldn't have continued smoking and wouldn't be addicted to the               
 tobacco right now.                                                            
                                                                               
 MR. WAITE referred to the statistics from Canada and said the same            
 thing can happen here in Alaska.  Tobacco is the only drug that               
 when used correctly will kill you and that is why he encouraged the           
 committee to pass CSHB 1(STA).                                                
                                                                               
 Number 1832                                                                   
                                                                               
 CRISTIN MARTINEAU said her brother is almost 14-years-old, which is           
 almost the average age of new smokers, and he has so little money             
 to spend on anything that she knows a dollar increase will                    
 influence his decision to smoke or not smoke.  Because when you're            
 14, a dollar is a lot of money.                                               
                                                                               
 Number 1869                                                                   
                                                                               
 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division,           
 Department of Revenue (DOR), was next to testify.  He said he would           
 comment on the fiscal note from the DOR and the smuggling issue.              
 He said DOR shows in the first full year, fiscal year 1999, that              
 $43 million of revenue would be raised.  He said there has been a             
 lot of analysis from the tobacco industry that DOR is overstating             
 the potential revenue.  He reiterated the comments from DHSS that             
 tobacco usage is really a health issue, and stated that we don't              
 want to get lost in the numbers.  He said DOR has gone back,                  
 reviewed the numbers based on some of the information presented by            
 the tobacco industry analysis and concluded that the DOR fiscal               
 note is a reasonable, sound estimate for the amount of revenue the            
 tax would raise.                                                              
                                                                               
 MR. BARTHOLOMEW said Washington State has raised their tax a number           
 of times over the past five or six years and has doubled their                
 tobacco revenue with an additional $100 million.  He said if we               
 were to apply the theory given out by the tobacco industry and                
 added that it was a sound theory, then the amount of taxes raised             
 in Washington State or to what happened in 1989, when the state of            
 Alaska last raised their tobacco taxes, the amount would be less              
 than what had been actually received last year.  He said the                  
 analysis the tobacco industry provided was that in the year 2000,             
 there would be 46 percent less packs of cigarettes sold than there            
 are today.  He said if this assumption was true, it would indicate            
 a big success in the health objective.  He said DOR has included,             
 in their revenue numbers, that there would be an 18 percent drop.             
 He said DOR rolled in a big drop in consumption.                              
                                                                               
 Number 1983                                                                   
                                                                               
 MR. BARTHOLOMEW said the other issue that was raised was smuggling            
 and added that this is really two issues; military bases and Indian           
 reservations.  He said a report was handed out in the House State             
 Affairs Standing Committee by the National Coalition Against Crime            
 and Tobacco Contraband which states their theory that there will be           
 mass smuggling off of military reservation.  This theory is based             
 on statements that 45 percent of all the current sales of                     
 cigarettes take place on a military base.  He said DOR sent written           
 letters to the military, who have been very cooperative in                    
 providing their sales figures.  He said the military has provided             
 numbers of who has commissary privileges in the state of Alaska.              
 Currently 9.7 percent of the entire Alaskan population have                   
 privileges to go on a base and purchase commodities at a commissary           
 or a PX.                                                                      
                                                                               
 MR. BARTHOLOMEW said the numbers show that military sales account             
 for just 7 percent of cigarette sales in Alaska.  He said, if you             
 went on just a straight proportional share of the population, they            
 are selling less.  He said the risk that people would use these               
 places is much smaller based on what is currently happening.                  
                                                                               
 MR. BARTHOLOMEW said DOR has been in touch with the U.S. Pacific              
 Command, the organization within the military that is responsible             
 for the operations of Alaska commissary, and they have been more              
 than willing to work with the state to address compliance issues.             
 In Hawaii, the command enacted controls to limit the number of                
 sales if they saw a problem.  He said DOR is encouraged that the              
 military is willing to work with the state and reiterated that the            
 numbers regarding the risk is small.                                          
                                                                               
 Number 2068                                                                   
                                                                               
 MR. BARTHOLOMEW said, regarding the Indian Country issue, there are           
 quite a few options.  It is clear from the Supreme Court that the             
 state has the authority to tax sales to non-tribal members.  The              
 feedback received from the Native Health Network, who have a huge             
 benefit in controlling cigarettes and sales, is that they would               
 work with the DOR.  He said several Supreme Court decisions give              
 the state authority, but the state wants to work cooperatively with           
 the Native Health organizations if there is the establishment of              
 tribal organizations to sell cigarettes.  Right now this is a                 
 limited thing, it is not a widespread option.                                 
                                                                               
 MR. BARTHOLOMEW said Washington does experience some problems with            
 sales on reservations.  It currently has 26 reservations selling              
 tobacco, 16 of those work cooperatively with Washington by filing             
 tax returns and paying taxes on a regular basis.  Ten of these                
 establishments are more inconsistent; sometimes they file,                    
 sometimes they pay.  He said Washington is continuing to work with            
 those sites and feel that they are making progress in increasing              
 the number of establishments who work cooperatively with the state.           
                                                                               
                                                                               
 TAPE 97-9, SIDE A                                                             
 Number 0000                                                                   
                                                                               
 VICE-CHAIR GREEN mentioned the fact that the military wanted to               
 work cooperatively and asked if they would be willing to impose a             
 lower limit on the numbers of cigarettes an individual might be               
 able to buy.                                                                  
                                                                               
 MR. BARTHOLOMEW said, at this point, DOR has not gotten into the              
 specifics.  The command did indicate that in Hawaii they initiated            
 a cap on how much could be purchased.  This cap was below what it             
 was before Hawaii raised the tax.  He said the military would                 
 provide DOR with sales information and if a significant change                
 occurred indicating a change in sales patterns, then it would be              
 addressed at that time.                                                       
                                                                               
 Number 0048                                                                   
                                                                               
 CHAIRMAN BUNDE mentioned that he hoped the tobacco industry was               
 correct when they claimed there would be a 46 percent decrease in             
 sales.  He asked about current taxing problem regarding cigarettes            
 coming into the state.  He said he heard that people can purchase,            
 via mail order, almost unlimited quantities of cigarettes and not             
 pay the current state excise tax.                                             
                                                                               
 Number 0091                                                                   
                                                                               
 MR. BARTHOLOMEW said discussions have been occurring at the DOR and           
 said the initial answer now is that the statute, as written,                  
 doesn't state that the DOR fully has the authority to tax those               
 sales for personal use.  He said DOR is looking at what other                 
 states have and they do have statutory language that makes that               
 subject to the tax.  He said our tax structure is a little bit                
 different than other states.  He said DOR does not have a specific            
 position or recommendation at this time, they don't think its                 
 taxable but reiterated that this is not an official position.  He             
 said DOR is looking at what updates, if any, they'd recommend to              
 address this.                                                                 
 Number 0152                                                                   
                                                                               
 CHAIRMAN BUNDE encouraged DOR to look at some procedure or stamp to           
 be able to tell what is contraband.  He referred to his testimony             
 that there are small, specialty shops that deal in tobacco which              
 are finding it difficult to remain profitable because so many                 
 people are ordering pipe tobacco and expensive, connoisseur kinds             
 of cigars from mail order businesses.  He said this seems like                
 unfair competition that these people can order via mail and not pay           
 the same sort of tax that people have to pay locally.                         
                                                                               
 MR. BARTHOLOMEW said DOR would look at this issue.                            
                                                                               
 Number 0215                                                                   
                                                                               
 REPRESENTATIVE PORTER clarified that if someone mail ordered                  
 cigarettes up to Alaska and then resold them, then they would be in           
 violation of existing law.                                                    
                                                                               
 MR. BARTHOLOMEW said it is very clear that if someone brought in              
 and resold cigarettes and didn't pay the tax, they would be in                
 violation with the current tobacco tax law.                                   
                                                                               
 Number 0241                                                                   
                                                                               
 REPRESENTATIVE PORTER asked what percentage of tax the state of               
 Washington had agreed to with the Indian Reservations.                        
                                                                               
 Number 0260                                                                   
                                                                               
 MR. BARTHOLOMEW said it was his understanding they paid the                   
 Washington tax for sales to non-members, that they are subject to             
 the same level of tax.  It is clear that sales to members are                 
 exempt and they are not paying a tax to the state of Washington on            
 those sales.  There are limits to what they can sell based on the             
 number of members in an organization.                                         
                                                                               
 Number 0291                                                                   
                                                                               
 CHAIRMAN BUNDE said, as he understood, that there are X number of             
 people on the reservation who are official members of that                    
 reservation and it can be assumed that if they smoked X quantity of           
 cigarettes that anything sold in excess of what would be the                  
 assumed consumption of the local residents was taxable.                       
                                                                               
 Number 0314                                                                   
                                                                               
 MR. BARTHOLOMEW said the Supreme Court has ruled that states have             
 the authority to do that as an enforcement mechanism, to establish            
 a cap based on the number of members of the tribe and what is a               
 normal consumption.  He said he was not sure if Washington had                
 enacted that measure yet.  He said the case evolved in New York.              
 It is a tool that is available for use, but he could not say which            
 states are or are not using it.                                               
                                                                               
 Number 0350                                                                   
                                                                               
 REPRESENTATIVE PORTER clarified that the only place in the state              
 where this could occur is Metlakatla.                                         
                                                                               
 Number 0362                                                                   
                                                                               
 CHAIRMAN BUNDE said people who suggest that someone would go to               
 Fort Yukon or Igiugig to purchase cigarettes don't have a real firm           
 grasp of Alaska geography.                                                    
                                                                               
 Number 0380                                                                   
                                                                               
 REPRESENTATIVE GREEN asked if there was enough of a deterrent to              
 prevent people from smuggling in cigarettes from other places with            
 a smaller tax.                                                                
                                                                               
 Number 0418                                                                   
                                                                               
 MR. BARTHOLOMEW said he couldn't quote what the penalties are,                
 there are penalties in statute, but he would have to look those up            
 in order to answer that question.                                             
 Number 0448                                                                   
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to conduct, VICE-CHAIR GREEN                  
 adjourned the meeting of the House Health, Education and Social               
 Services Standing Committee at 4:43 P.M.                                      
                                                                               

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