Legislature(1997 - 1998)
01/16/1998 09:00 AM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
January 16, 1998
9:00 a.m.
MEMBERS PRESENT
Senator Gary Wilken, Chairman
Senator Loren Leman, Vice-Chairman
Senator Jerry Ward
Senator Johnny Ellis
MEMBERS ABSENT
Senator Lyda Green
COMMITTEE CALENDAR
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 189(JUD) am
"An Act relating to sale, gift, exchange, or distribution of
tobacco and tobacco products."
HEARD AND HELD
SENATE BILL NO. 197
"An Act relating to health care services provided by, and practices
of, a health maintenance organization; and prohibiting health
maintenance organizations from limiting free speech of health care
providers."
HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
HB 189 - See Rules minutes dated 5/10/97.
SB 197 - See HESS minutes dated 1/14/98.
WITNESS REGISTER
Gordon Evans
Health Insurance Assn. of America
318 4th Street
Juneau, Alaska
POSITION STATEMENT: Commented on SB 197.
Representative John Cowdery
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of HB 189.
Anne Marie Holen
Alaska Native Health Board
Anchorage, Alaska
POSITION STATEMENT: Supports some provisions of HB 189.
Michael Livingston
P.O. Box 112612
Anchorage, Alaska 99511
POSITION STATEMENT: Commented on HB 189.
Joyanne Bloom
Juneau Tobacco Prevention Network
883 Basin Road
Juneau, Alaska
POSITION STATEMENT: Commented on HB 189.
Dean Guaneli
Assistant Attorney General
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: Commented on HB 189.
Jennifer Strickler
Division of Occupational Licensing
Department of Commerce and Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
POSITION STATEMENT: Answered questions about license suspension.
Marco Pignalberi
Staff to Representative Cowdery
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Commented on HB 189.
Bob Bartholomew
Income & Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, Alaska 99811-0420
POSITION STATEMENT: Commented on HB 189.
ACTION NARRATIVE
TAPE 98-2, SIDE A
Number 001
SB 197 - REGULATING HEALTH MAINTENANCE ORGS.
CHAIRMAN WILKEN called the Senate Health, Education and Social
Services (HESS) Committee to order at 9:06 a.m. Present were
Senators Wilken, Ward and Leman. Chairman Wilken announced the
first order of business was to continue taking public testimony on
SB 197, which would also be heard in committee on Wednesday,
January 21, at the sponsor's request.
GORDON EVANS, representing the Health Insurance Association of
America (HIAA), clarified HIAA's position on SB 197. In previous
testimony, Mr. Evans stated that HIAA believed SB 197 is
unnecessary; opposed Section 2 which mandates certain benefits for
chiropractors; and did not oppose the provisions in Sections 1 and
3. HIAA believes Section 1, which proposes to amend current law to
require a carrier to include, in its evidence of coverage,
guidelines explaining when treatment may be denied, is unnecessary
because managed care plans are currently required to file a
Schedule of Benefits with the Division of Insurance when
establishing plans in Alaska. The Schedule of Benefits, which is
provided to encourage active enrollment, is a legal document that
describes in detail what the plan does and does not cover, and
rules and procedures governing eligibility. Instead, HIAA would be
willing to provide to the patient or health care provider, upon
request, a written explanation of an adverse determination.
Regarding Section 3, MR. EVANS said three of the five parts impose
limits on communication between a health care provider and the
enrollee, and require written notification of cause for termination
of a health care provider. HIAA believes those provisions are
contractual matters. Most managed care firms guard their current
customers and information about their plan for purposes of
confidentiality. Consequently, plans will include contractual
provisions asking the health care provider to agree to not
disparage the health plan to enrollees or attempt to induce the
enrollees to leave a plan or join another. These types of
contractual provisions are not unique to HMOs; they are imposed by
other employers through contracts or employment manuals: no
business can tolerate its employees driving customers away. As the
general contractor employing the provider, health plans could be
held jointly liable for libelous statements by a provider or
spurious claims which may impact another provider's business.
Also provider's who might have multiple contractual arrangements
with health facilities and plans could attempt to steer patients to
facilities in which they have a personal financial interest.
Finally, the medical community has protected itself against
disclosure of data which compares physicians and facilities based
upon clinical outcomes. The same level of analytical objectivity
should be required in any qualitative statements made by physicians
who are in a contractual relationship with an HMO.
MR. EVANS read part of the written testimony he submitted for the
committee file and concluded his remarks by saying insurers should
not be required to subject every denial of health care coverage to
a second provider's opinion. HIAA always opposes mandating
benefits because that practice will drive up costs and ultimately
limit the affordability of quality care for consumers. Mr. Evans
stated he would be willing to work with the sponsor on changes to
SB 197 that HIAA could support.
Number 140
SENATOR WARD asked if the sponsor requested that SB 197 be held in
committee. CHAIRMAN WILKEN repeated the bill would be held until
Wednesday at the sponsor's request.
HB 189 - RESTRICT TOBACCO SALES
REPRESENTATIVE JOHN COWDERY, sponsor of HB 189, announced that he
would first discuss the original version of HB 189 and then the
proposed committee substitute. HB 189 prohibits self-service
displays of tobacco products in retail stores. Self-service
displays are notoriously susceptible to shoplifting and impulse
buying by minors. Their elimination has proven to be a popular
means of removing access by minors to cigarettes. More than 180
cities throughout the U.S. have already implemented prohibitions on
self service tobacco displays. Sixty days ago the Municipality of
Anchorage (MOA) unanimously passed an ordinance modeled after HB
189 and last year the House unanimously passed HB 189. The
operative statement of the bill is found is Section 3 and requires
sales to occur in a manner that allows only sales clerks to control
access to tobacco products.
REPRESENTATIVE COWDERY discussed the remaining sections of the
bill. Section 2 changes the penalty provision from a violation
punishable by $300 to a class B misdemeanor punishable by a fine of
not more than $1000. Section 1 of the bill establishes the offense
of selling or giving tobacco to a minor and contains the
culpability standard necessary to prosecute an offense under this
act. By changing the penalty level of the offense from a violation
to a class B misdemeanor, the culpability standard must be
increased from negligent conduct to knowing conduct. The Attorney
General's Office prefers to keep negligent behavior as the standard
of culpability which is possible because of a court ruling in
October of 1997 in the Exxon-Valdez case. Representative Cowdery
said he favors maintaining the negligent standard if the stiffer
penalty can be imposed.
REPRESENTATIVE COWDERY continued. Section 4 of HB 189 applies to
businesses licensed as cigarette manufacturers, distributors,
direct-buying retailers, or vending machine operators, and allows
for the suspension or revocation of the license for authorizing the
sale of tobacco products to minors.
Section 5 repeals two subsections of the statute relating to the
regulation of cigarette vending machines because those subsections
were included in HB 159. REPRESENTATIVE COWDERY suggested
restoring those subsections in the proposed committee substitute.
This action would incorporate existing law related to vending
machines.
Section 6 notes the Legislature's intent that HB 159 and HB 189
both be given maximum effect. This section will become unnecessary
in the proposed committee substitute.
Number 226
SENATOR ELLIS asked if Representative Cowdery was referring to the
proposed committee substitute before the committee.
CHAIRMAN WILKEN noted he would entertain a motion to accept SCS
CSSSHB 189(HESS) (Ford 0-LS0711\K) as the working version before
the committee. SENATOR LEMAN so moved. There being no objection,
CHAIRMAN WILKEN announced SCS CSSSHB 189(HESS) was adopted as the
working document of the committee and explained that is the
committee substitute Representative Cowdery was referring to.
Number 237
SENATOR LEMAN said that while recently shopping at a "warehouse
buying club" he noticed a large section of tobacco products
displayed in a manner accessible to anyone. He asked if this bill
will preclude carton sales in those stores.
REPRESENTATIVE COWDERY answered that type of situation gets into
the question of wholesale and retail sales; it is his intent to
require that only clerks can access the product for the customer.
SENATOR LEMAN asked if the products would be caged. REPRESENTATIVE
COWDERY said that could be one way to isolate them.
SENATOR WARD said he introduced a similar piece of legislation to
raise the penalties for selling tobacco products to minors to that
for selling alcohol to minors. He noted the increase in tobacco
taxes was supposed to stop minors from smoking, and asked why this
legislation was necessary.
REPRESENTATIVE COWDERY answered he did not vote for the tax bill.
Regardless of the tax on cigarettes, HB 189 will restrict access to
tobacco by minors.
Number 285
SENATOR WILKEN noted two people were waiting to testify via
teleconference from Anchorage.
ANN MARIE HOLEN, representing the Tobacco Control Program with the
Alaska Native Health Board, and Citizens to Protect Kids from
Tobacco, gave the following testimony. Her groups are very pleased
to see continued interest among policy makers in reducing the
burden of tobacco-caused deaths in the State. Almost all nicotine
addicts get hooked in their teens, so it is extremely important to
make it harder to get tobacco during those vulnerable years. She
strongly supports the provision in HB 189 that would remove self-service tobacc
assisted. This is a simple measure that would eliminate
shoplifting of tobacco products if properly enforced. Right now
shoplifting is a major source of tobacco for young smokers as other
states' surveys have shown. Also, by removing self-service
displays, advertising methods that accompany those displays will be
eliminated. MS. HOLEN expressed concern about raising the
culpability standard to "knowingly" because enforcement officials
will have to prove that a clerk knew he or she was selling to an
underaged buyer. This standard would erect such an obstacle to
meaningful enforcement as to essentially eliminate it. The
standard was changed in 1992 from "knowingly" to "negligently"
because the law was unenforceable. Losing one's business license
for tobacco sales to minors is a severe consequence; current law
already provides for that. The most important thing is to actively
enforce the laws already on the books. She urged committee members
to support banning self-service displays, tightening vending
machine restrictions, and closing the loophole that allows minors
to sell to minors.
Number 337
SENATOR WARD asked Ms. Holen to submit documentation to
substantiate her comment that the tobacco tax has reduced teenage
smoking. MS. HOLDEN clarified that she did not refer to the
tobacco tax in her testimony but added she does expect the
increased tobacco tax to reduce youth smoking by about 20 percent.
She noted all tobacco control experts agree this problem needs a
comprehensive approach and the tobacco tax increase is one part of
a comprehensive strategy.
SENATOR WARD asked Ms. Holen to provide the committee with
information about the 20 percent reduction. She agreed.
Number 361
MICHAEL LIVINGSTON, a police officer, made the following comments
on his own behalf. The Alaska Police Standards Council says that
one of the fundamental duties of Alaska law enforcement officers is
to safeguard human lives and to protect the innocent against
deception. Most Alaskans become addicted to tobacco when they are
in their early teens when it is not even legal for them to possess
it. He has issued around 150 tickets to minors during the past
five years for possession of tobacco. In 1997 he issued 32
citations to store clerks for selling tobacco to minors. AS
11.76.100, written in 1992, does not need modification. If HB 189
is adopted, it will be unenforceable because police will have to
prove that clerks knowingly sold to minors. Of the 32 citations,
only one clerk admitted she knew the buyer was a minor. Mr.
Livingston believed the $300 fine is an adequate penalty and that
there is no reason to change the offense from a violation to a
misdemeanor. He agrees that the restriction on access is a good
idea, but HB 189 will be unenforceable if the "knowingly" standard
is required. He believes sales of tobacco to minors has already
been dramatically reduced in Anchorage as a result of enforcement.
He urged the committee not to adopt the "knowingly" standard
proposed under HB 189.
CHAIRMAN WILKEN asked Mr. Livingston if he is an Anchorage
policeman. MR. LIVINGSTON said he does work for the Anchorage
Police Department but he is not representing them today.
Number 401
SENATOR WARD applauded Mr. Livingston for his enforcement efforts
and asked if Mr. Livingston considers tobacco addiction to be on
the same level as alcohol addiction. MR. LIVINGSTON thought both
alcohol and tobacco are very serious concerns, and added that if
the State does not continue to reduce the sale of tobacco to
minors, hundreds of thousands of dollars under the SINAR amendment
for alcohol and drug counseling will be jeopardized.
JOYANNE BLOOM, representing the Juneau Tobacco Prevention Network,
thanked Chairman Wilken for hearing this measure which will help to
keep tobacco out of the hands of youth. The Network has been
offering smoking cessation classes in the high school and has been
educating vendors. She noted last Spring nine citations were
issued after a sting operation occurred in Juneau. Two of those
citations were thrown away because the clerks were under the age of
19. That loophole will be fixed by HB 189. She noted youth are
selling stolen cigarettes in the high school for $1 each.
Regarding the negligent versus knowingly standard, a clerk would
have to check a minor's ID and sell that person cigarettes anyway
to be charged with a misdemeanor under the knowingly standard.
SENATOR LEMAN said a person would be breaking current law if he/she
sold to a minor without checking an ID because of the negligent
standard. MS. BLOOM agreed and said during the arraignments at the
court, she learned that some asked for the ID and did not look at
it carefully enough, but more often the ID was not checked and the
minor lied about his/her age.
SENATOR WARD stated he believes tobacco kills more people than
alcohol, and that stiffening laws regarding alcohol has had a
favorable effect. He asked Ms. Bloom if she thought that if all
tobacco retailers were educated on its effects and also subject to
severe penalties, it would have a reducing effect. MS. BLOOM
agreed that tobacco kills far more people, but said the $300 fine
imposed during the arraignments really hurt the vendors. After
that occurred, the Network sent out forms to all vendors for their
employees' signatures, explaining the consequences of tobacco sales
by employees.
SENATOR WARD asked Ms. Bloom if she thought vendors would be more
careful about who they hire if they knew they might lose their
license to sell tobacco. MS. BLOOM thought they would.
Number 500
DEAN GUANELI, Assistant Attorney General, Department of Law,
addressed his comments to the committee substitute, which might
have the effect of limiting enforceability of the current statute.
The Alaska Supreme Court made a definitive ruling in October of
1997 regarding the minimum level of culpability necessary under the
Alaska Constitution to establish a criminal law violation: that
level is simple negligence. If one applies a knowingly standard of
mental culpability, it would be nearly impossible to enforce this
law because that would require a situation in which a clerk looked
at an ID, determined the buyer was under 19, and sold tobacco
products anyway. He recommended retaining the negligence standard
by amending the committee substitute on page 1, lines 7, 9, 12, and
page 2, line 24, by replacing the word "knowingly" with the word
"negligently," and on page 3, lines 2-3 by replacing the word
"knowing" with "simple negligence."
MR. GUANELI explained the second aspect of HB 189 that affects
enforceability goes to the penalty section. He agreed with Officer
Livingston that it is not necessary to make these offenses criminal
because a violation punishable by a fine is enough. Most violators
will be store clerks, who will risk losing their jobs for selling
to minors. In addition, when conduct is criminalized, the offender
has the right to a court-appointed attorney and jury trial, which
will delay the process. Most offenders to date were caught red-handed, pled gu
enforcement mechanisms, the business license endorsement of the
store owner can be suspended or revoked. Mr. Guaneli felt that is
the stronger deterrent and that employers will need to train
employees to ensure they are carefully checking IDs.
Mr. Guaneli stated the current statute, AS 43.70.075, provides that
a business license holder have a separate endorsement to sell
tobacco products. If a violation occurs, the Department of
Commerce can revoke the endorsement. For a first offense, the
maximum suspension is 45 days; for a second offense within two
years, the maximum is 90 days. Rather than reclassify the offense,
Mr. Guaneli said the amount of suspension time could be increased.
Number 564
SENATOR LEMAN agreed with Mr. Guaneli regarding reclassifying the
offense because he believes swift and predictable penalties are
more effective if enforced consistently than those that are drawn
out, even though they are more severe. He asked if the department
is enforcing the current law, and if not, why.
MR. GUANELI agreed with Senator Leman's point and noted a
representative from the Department of Commerce and Economic
Development was available to answer that question.
CHAIRMAN WILKEN asked if Representative Cowdery agreed to the four
proposed changes to the committee substitute. REPRESENTATIVE
COWDERY said he did.
CHAIRMAN WILKEN commented that being involved in the wholesale food
business, he is aware of the efforts stores are trying to make to
restrict tobacco sales. He noted one of the cardinal rules of the
business is to never be out of anything, especially tobacco, and
believed a 45 day suspension would be a serious deterrent.
SENATOR LEMAN stated under current law the minimum fine is $300.
He asked what the maximum amount of that fine could be. MR.
GUANELI answered there are certain violations under Alaska law that
carry up to a $1,000 fine and do not trigger the right to a jury
trial and counsel. That right is triggered by offenses that denote
criminality. He thought the maximum fine imposed for this offense
could be as high as $1,000. SENATOR LEMAN noted his interest in
working with the sponsor to retain the offense as a violation, and
possibly increase the fine.
JENNIFER STRICKLER, Administrative Manager of the Division of
Occupational Licensing and Business License Administrator,
Department of Commerce and Economic Development, gave the following
testimony. Suspension of endorsements to sell tobacco was enforced
for the first time in 1997. In order for the department to take
action in these cases, the statute requires a conviction. The
department gets those records from the court system. To date, five
businesses have had their endorsements suspended for 45 days.
Those businesses were hurt by the suspension. Currently, one
business has a license suspended, and 20 cases are under review by
the Attorney General's Office.
Number 549
SENATOR LEMAN thought that publicity about the suspensions can be
an effective tool to change behavior. He asked if any of these
cases were publicized. MS. STRICKLER said several newspaper
articles have been published and some businesses are watching each
other for compliance.
CHAIRMAN WILKEN asked if license revocation is limited to the
particular site where the violation occurred, even though the
licensee might own ten stores. MS. STRICKLER said that was
correct.
SENATOR ELLIS asked if Chairman Wilken's intention was to work with
the sponsor on the negligence standard and the penalty section. He
commented he is undecided on the proposal to raise the penalty
amount. He asked if the vending machine provisions were put back
into the committee substitute, and noted his concern that that
language may not be expansive enough. He explained that vending
machines can be located in employee break rooms, which is
reasonable when the employees are all adults. A problem does
arise, however, if the employer also employs minors.
MARCO PIGNALBERI, staff to Representative Cowdery, stated the same
vending machine issue has been raised with the Municipality of
Anchorage, in regard to its ordinance. He noted his intent to
discuss the problem with the MOA to determine a solution, as the
concern is a legitimate one.
SENATOR ELLIS asked if a business is both a retailer and a
wholesaler, such as COSTCO, whether it would be exempt from the
restriction on self-serve tobacco displays.
BOB BARTHOLOMEW, Assistant Director of the Income and Excise Tax
Division of the Department of Revenue, said that Section 4, line
28, of the proposed committee substitute, provides for an exemption
if the sale is a wholesale transaction and the person is licensed
as a distributor. He interpreted that to mean if a business
conducts retail transactions, and is licensed as a distributor, the
exemption would not apply, requiring that business to keep tobacco
products segregated.
SENATOR ELLIS asked if the Department of Law agrees with that
interpretation. CHAIRMAN WILKEN noted he would ask a
representative of the Department of Law to discuss that issue at
the next meeting. He announced the committee would reschedule HB
189 at the sponsor's request.
SENATOR LEMAN clarified he was not necessarily supporting an
increased fine for the violation; he was suggesting it as an
alternative to the creation of a misdemeanor. He suspected a $300
fine would be a deterrent.
CHAIRMAN WILKEN added one could also lose his/her opportunity to
remain employed. He announced Barbara Brink, of the Alaska Public
Defender's Office was available to answer questions via
teleconference. There being no questions, and no further testimony
on HB 189, CHAIRMAN WILKEN made the following announcements. Both
the House and Senate HESS committees have been invited to a
presentation on March 27 on child development during ages zero to
five. He introduced staff, and noted the next meeting would be
held on Wednesday, January 21.
(PLEASE NOTE: THE CORRECT DATE FOR THE PRESENTATION ON CHILD
DEVELOPMENT IS MARCH 26.)
There being no further business to come before the committee,
CHAIRMAN WILKEN adjourned the meeting at 10:20 a.m.
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