Legislature(2019 - 2020)BELTZ 105 (TSBldg)

02/27/2020 01:30 PM Senate LABOR & COMMERCE

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01:30:47 PM Start
01:32:15 PM Confirmation Hearings
01:43:45 PM SB182
02:29:16 PM Presentation: Alaska Hire
02:50:32 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
Workers' Compensation Board
- Nancy Shaw
Board of Architects, Engineers & Land Surveyors
- Catherine Fritz
-- Public Testimony on All Appointees --
Heard & Held
-- Testimony <Invitation Only> --
"Alaska Hire: Zones of Underemployment" by
Dan Robinson, DOLWD Research & Analysis
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                       February 27, 2020                                                                                        
                           1:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Chair                                                                                                     
Senator Gary Stevens, Vice Chair                                                                                                
Senator Elvi Gray-Jackson                                                                                                       
MEMBERS ABSENT                                                                                                                
Senator Mia Costello                                                                                                            
Senator Joshua Revak                                                                                                            
COMMITTEE CALENDAR                                                                                                            
CONFIRMATION HEARINGS                                                                                                           
Alaska State Board of Architects, Engineers, & Land Surveyors                                                                 
Catherine Fritz - Juneau                                                                                                        
     - CONFIRMATION ADVANCED                                                                                                    
Alaska Workers' Compensation Board                                                                                            
Nancy Shaw - Anchorage                                                                                                          
     - CONFIRMATION ADVANCED                                                                                                    
SENATE BILL NO. 182                                                                                                             
"An Act raising  the minimum age to purchase,  sell, exchange, or                                                               
possess tobacco, a product containing  nicotine, or an electronic                                                               
smoking product;  relating to the taxation  of electronic smoking                                                               
products; and providing for an effective date."                                                                                 
     - HEARD AND HELD                                                                                                           
PRESENTATION: ALASKA HIRE                                                                                                       
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 182                                                                                                                  
SHORT TITLE: AGE FOR NICOTINE/E-CIG; TAX E-CIG.                                                                                 
SPONSOR(s): SENATOR(s) STEVENS                                                                                                  
02/10/20       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/10/20       (S)       L&C, FIN                                                                                               
02/27/20       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
CATHERINE FRITZ, Appointee                                                                                                      
Alaska State Board of Architects, Engineers and Land Surveyors                                                                  
Division of Corporations, Business and Professional Licensing                                                                   
Department of Commerce, Community and Economic Development                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified as an appointee to the Alaska                                                                   
State Board of Architects, Engineers and Land Surveyors.                                                                        
NANCY SHAW, Appointee                                                                                                           
Alaska Workers Compensation Board                                                                                               
Department of Labor and Workforce Development (DOLWD)                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified as appointee to the Alaska Workers                                                              
Compensation Board.                                                                                                             
TIM LAMKIN, Staff                                                                                                               
Senator Gary Stevens                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Delivered a presentation and the sectional                                                                
analysis for SB 182.                                                                                                            
MARGE STONEKING, Executive Director                                                                                             
American Lung Association of Alaska                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 182.                                                                           
JOE DARNELL, Chief Investigative Officer                                                                                        
Tobacco Youth Education & Enforcement Program                                                                                   
Division of Behavioral Health                                                                                                   
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 182.                                                                           
DAN ROBINSON, Chief                                                                                                             
Research & Analysis (R&A)                                                                                                       
Division of Administrative Services                                                                                             
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Participated in  the presentation  on Alaska                                                             
ROB KREIGER, Economist                                                                                                          
Research & Analysis (R&A)                                                                                                       
Division of Administrative Services                                                                                             
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Delivered the presentation on Alaska Hire.                                                                
ACTION NARRATIVE                                                                                                              
1:30:47 PM                                                                                                                    
CHAIR CLICK BISHOP called the  Senate Labor and Commerce Standing                                                             
Committee meeting to order at 1:30  p.m. Present at call to order                                                               
were Senators Gray-Jackson, Stevens, and Chair Bishop.                                                                          
^Confirmation Hearings                                                                                                          
                     CONFIRMATION HEARINGS                                                                                  
1:32:15 PM                                                                                                                    
CHAIR  BISHOP announced  the  first order  of  business would  be                                                               
consideration of governor appointees.  He asked each appointee to                                                               
place  their name  and affiliation  on the  record, give  a brief                                                               
introduction, and  discuss the reason  they want to serve  on the                                                               
board or  commission. He advised  that public testimony  would be                                                               
taken after all  appointees had testified and the  names would be                                                               
forwarded to  the full  body for  consideration. The  hearing was                                                               
not a recommendation on any subsequent vote.                                                                                    
1:33:07 PM                                                                                                                    
CATHERINE  FRITZ, Appointee,  Alaska State  Board of  Architects,                                                               
Engineers and Land Surveyors,  Division of Corporations, Business                                                               
and  Professional Licensing,  Department  of Commerce,  Community                                                               
and Economic Development (DCCED)  Juneau, Alaska, stated that her                                                               
consideration is  a reappointment to  a second term.  She advised                                                               
that  she  has  lived  in  Alaska  since  1983  and  has  been  a                                                               
registered architect since 1990. She said  she grew up in a blue-                                                               
collar family and  learned the value of  accomplishing things for                                                               
oneself and others; that dreaming  and problem solving go hand in                                                               
hand; and  that making  a great idea  a reality  takes compromise                                                               
and hard work. She lives by these principles.                                                                                   
MS. FRITZ  related that her  career in public service  provided a                                                               
good understanding of statutory  and regulatory processes as well                                                               
as  the role  of  this  board. This  has  helped her  effectively                                                               
respond to  the business  of the  board and  stay focused  on the                                                               
board's mission.  She said  she is  able to  objectively consider                                                               
the  regulatory needs  of the  profession. In  the last  year she                                                               
helped develop the  board's Strategic Plan to guide  its work and                                                               
she would  like to  continue to  work on  this and  several other                                                               
projects if reconfirmed.  She said it has been an  honor to serve                                                               
on the  AELS Board  and she  has demonstrated  this by  coming to                                                               
meetings  prepared,   engaging  in  committee  work,   and  being                                                               
responsive to the board's business.  She noted that she submitted                                                               
written testimony.                                                                                                              
SENATOR STEVENS asked  what has been the hardest  part of serving                                                               
on this board.                                                                                                                  
MS. FRITZ  replied it is a  matter of trying to  be understanding                                                               
and aware  of the different  but related disciplines  because the                                                               
board has to  make licensing decisions for 15  types of engineers                                                               
as well  as land surveyors  and architects. In some  places there                                                               
should be differences and others there should be similarities.                                                                  
CHAIR  BISHOP  asked  her  to  comment on  her  time  as  adjunct                                                               
professor at the university.                                                                                                    
MS.  FRITZ  said she  was  an  adjunct  professor for  a  project                                                               
management class  at UAS.  She found it  very fulfilling  to take                                                               
this aspect of her work and  apply it to young students trying to                                                               
find their path, not necessarily in architecture.                                                                               
CHAIR  BISHOP asked  if she  shared her  non-textbook, real-world                                                               
experience as  an architect  with her students  to help  put them                                                               
ahead when they enter the work world.                                                                                           
MS. FRITZ  said yes; it's nice  to give students a  small picture                                                               
of where they might go in the future.                                                                                           
CHAIR  BISHOP thanked  her  and  asked Ms.  Shaw  to provide  her                                                               
1:39:28 PM                                                                                                                    
NANCY  SHAW,   Appointee,  Alaska  Workers   Compensation  Board,                                                               
Department  of Labor  and  Workforce  Development (DOLWD),  Labor                                                               
Member,  Anchorage, Alaska,  stated that  she has  served on  the                                                               
board [in the labor seat] for  two years and was pleased to learn                                                               
the governor reappointed  her for an additional  three years. She                                                               
relayed that she was general  counsel for the Teamsters Union for                                                               
15 years and continues to do  a little work for the Teamsters and                                                               
Longshoremen in  Anchorage. She listed  her varied areas  of work                                                               
to demonstrate  that her background  relates to  workplace issues                                                               
across the state. She said her  service on the board has provided                                                               
an  opportunity  to look  at  workplace  safety issues  from  the                                                               
perspective  of employers  who have  to assist  employees recover                                                               
from injuries. She  said the learning curve for  board members is                                                               
very steep  and after  the training she's  received the  last two                                                               
years she feels she can now serve effectively.                                                                                  
CHAIR BISHOP found  no questions and applauded  her commitment to                                                               
CHAIR BISHOP  stated that  in accordance  with AS  39.05.080, the                                                               
Senate  Labor  and  Commerce   Standing  Committee  reviewed  the                                                               
following  and  recommends the  appointments  be  forwarded to  a                                                               
joint session for consideration:                                                                                                
Alaska State Board of Architects, Engineers, & Land Surveyors                                                                 
Catherine Fritz - Juneau                                                                                                        
Alaska Workers' Compensation Board                                                                                            
Nancy Shaw - Anchorage                                                                                                          
Signing  the   reports  regarding  appointments  to   boards  and                                                               
commissions in  no way reflects  individual members'  approval or                                                               
disapproval  of  the  appointees;   the  nominations  are  merely                                                               
forwarded to the full legislature for confirmation or rejection.                                                                
1:42:49 PM                                                                                                                    
At ease                                                                                                                         
            SB 182-AGE FOR NICOTINE/E-CIG; TAX E-CIG.                                                                       
1:43:45 PM                                                                                                                    
CHAIR BISHOP announced the consideration  of SENATE BILL NO. 182,                                                               
"An Act raising  the minimum age to purchase,  sell, exchange, or                                                               
possess tobacco, a product containing  nicotine, or an electronic                                                               
smoking product;  relating to the taxation  of electronic smoking                                                               
products; and providing for an effective date."                                                                                 
1:44:09 PM                                                                                                                    
SENATOR GARY STEVENS, speaking as  sponsor of SB 182, stated that                                                               
this  legislation  is  about protecting  children  from  becoming                                                               
addicted  to  nicotine by  restricting  sales  and possession  of                                                               
various tobacco  products to  young people,  including electronic                                                               
cigarettes.  He  said  scientific   evidence  and  public  health                                                               
advocates  have helped  to  put the  use  of traditional  tobacco                                                               
products on the decline and  tobacco manufacturers are responding                                                               
by offering new  and more fashionable smoking  options related to                                                               
e-cigarettes. These are designed  to be particularly appealing to                                                               
young people. He  said the claim that these products  are safe is                                                               
simply not true  and it is therefore important to  act quickly to                                                               
protect young Alaskans who are being targeted.                                                                                  
1:45:46 PM                                                                                                                    
TIM   LAMKIN,  Staff,   Senator   Gary   Stevens,  Alaska   State                                                               
Legislature,  Juneau, Alaska,  began the  presentation on  SB 182                                                               
with a  short video to  demonstrate the importance  of preventing                                                               
youth  from  accessing e-cigarettes  because  it  is becoming  an                                                               
MR.  LAMKIN  advised  that  the   committee  will  hear  that  e-                                                               
cigarettes  are  not  targeting  youth,  that  e-cigarettes  help                                                               
people quit  smoking, that these  products are safe  and healthy,                                                               
and  that taxation  will  kill  the industry.  He  said he  would                                                               
refute each claim.                                                                                                              
He related that  vaping started in the 1940s but  it was not seen                                                               
as a  fashionable form of  smoking. The practice  was revitalized                                                               
in the early 2000s and it  entered the U.S. market in early 2007.                                                               
The  federal  government has  scrambled  to  catch up  with  this                                                               
elusive industry  since then. These largely  unregulated products                                                               
contain   five  known   chemicals.  He   displayed  a   slide  to                                                               
demonstrate that these ultra-fine  particles that form an aerosol                                                               
are inhaled  into the  lungs. He  said it  would be  difficult to                                                               
suggest  that  they are  safe.  He  noted  that the  benefits  of                                                               
ingesting vitamin E have been  demonstrated but inhaling it as an                                                               
aerosol is very harmful.                                                                                                        
MR.  LAMKIN said  some people  argue  that the  expense of  these                                                               
products is a  barrier to youth access. He refuted  that claim by                                                               
displaying  a depiction  of  a  $50 JUUL  starter  kit and  $4-$5                                                               
refillable  cartridges. He  said  these  products are  advertised                                                               
with a multitude  of flavorings but it's  primarily nicotine that                                                               
keeps  customers  coming  back.  He  displayed  a  slide  showing                                                               
vintage  advertising   of  tobacco  products   alongside  current                                                               
advertising  of  vaping  products.  He  pointed  out  that  vapor                                                               
product marketing  is largely unregulated.  The next  slides show                                                               
different  celebrities  and   young  people  using  e-cigarettes,                                                               
including Donny Smokes,  a social media celebrity  who is alleged                                                               
to receive  $1,000 per  post. He  called it  a "youth  frenzy" as                                                               
demonstrated by the social media  postings and videos such as "My                                                               
First Time  Vaping With Friends!"  and "BAD IDEA Vaping  in front                                                               
of my mom  for the 1st time."  He noted that the  latter had more                                                               
than 1.5 million views.                                                                                                         
1:53:53 PM                                                                                                                    
MR. LAMKIN  displayed a slide  showing the wide array  of flavors                                                               
that are available for vaping  and notied that the bill addresses                                                               
this aspect  of e-cigarettes. The  images depicted on  this slide                                                               
refute the claim  that these products are not  marketed to youth.                                                               
This is  one avenue for  getting people addicted to  nicotine. He                                                               
pointed out that these nicotine  disguised flavors are completely                                                               
MR.  LAMKIN said  the argument  that these  products do  not have                                                               
nicotine and  are not addictive  is refuted  by a 2015  report by                                                               
the Food and  Drug Administration (FDA). Testing  found that over                                                               
99 percent of  the tested products contained  nicotine, even when                                                               
labeled nicotine free.  The risks of e-cigarettes  are not known,                                                               
but  the FDA  has not  found  that any  are safe.  They may  help                                                               
someone  stop  smoking, but  they  do  not treat  the  addiction.                                                               
Recent research indicates that more than half of adult e-                                                                       
cigarette users  also continue to use  traditional cigarettes. He                                                               
pointed  out  that  quitting  means  ending  the  addiction,  not                                                               
switching to another method of nicotine delivery.                                                                               
The 2017  Alaska Youth Risk  Behavioral Survey indicates  that 13                                                               
percent  of  high  school  youth currently  use  tobacco  and  16                                                               
percent use e-cigarettes while 34  percent have tried tobacco and                                                               
40 percent have tried e-cigarettes.  He offered his understanding                                                               
that the  most recent data  suggests that  the current use  of e-                                                               
cigarettes has almost  doubled, from 16 percent  to between 30-35                                                               
percent. Those numbers will be published in April.                                                                              
1:57:00 PM                                                                                                                    
MR. LAMKIN  pointed to the next  slide that shows a  wide variety                                                               
of  the  e-devices  that  have   been  confiscated  in  Anchorage                                                               
schools. He said  these devices are in children's  hands and they                                                               
are  aware  of  the  disparity between  state  and  federal  law.                                                               
Federal law prohibits, without exception,  the sale or possession                                                               
of e-cigarette  products to anyone  under the  age of 21.  SB 182                                                               
will bring state law in line  with federal law with the exception                                                               
of those in the military and  in prison. He said the sponsor will                                                               
introduce  amendments to  SB 182  to remove  those exceptions  to                                                               
conform to federal law. State  law currently allows those who are                                                               
age 19 to  buy, sell, or possess cigarette products.  He said the                                                               
federal government  relies on the  state for enforcement  but the                                                               
state's  enforcement  hands  are  tied because  of  the  conflict                                                               
between the laws. He reiterated that  SB 182 will align state law                                                               
with  the  federal law.  Furthermore,  the  bill will  tax  these                                                               
MR. LAMKIN concluded  the presentation by showing  a picture from                                                               
1994  when the  CEOs of  the major  U.S. cigarette  manufacturers                                                               
swore under  oath to  Congress that  their products  were neither                                                               
addictive  nor  harmful to  human  health.  He pointed  out  that                                                               
industry  advocates today  insist that  e-cigarettes are  neither                                                               
addictive nor harmful.  They maintain these products  are a safe,                                                               
healthy alternative to tobacco and  that more time, research, and                                                               
data is  needed to study  their effect  on human health.  He said                                                               
this is a  multibillion dollar business and lobbyists  are in the                                                               
committee room  and online right  now monitoring the  progress of                                                               
the bill.                                                                                                                       
CHAIR BISHOP asked him to go through the sectional analysis.                                                                    
2:00:16 PM                                                                                                                    
MR.  LAMKIN  summarized  that  SB 182  will  bring  all  statutes                                                               
related to buying, selling, or  possessing tobacco from a minimum                                                               
age  of 19  to the  age  of 21.  Further,  it will  bring all  e-                                                               
cigarettes under the existing tax code for tobacco.                                                                             
He paraphrased the sectional analysis for SB 182:                                                                               
     Sec. 1: AS 11.76.100(a),  relating to selling or giving                                                                    
     tobacco to a  minor, raises the minimum age  from 19 to                                                                    
     Sec. 2:  AS 11.76.100(b),  relating to  the requirement                                                                    
     for  vendors  to  supervise the  operation  of  tobacco                                                                    
     product  vending machines  (TVM), amends  the exemption                                                                    
     for  TVMs situated  in a  private break  room, provided                                                                    
     there is  signage posted indicating the  minimum age to                                                                    
     possess tobacco products is age 21 (from 19).                                                                              
     Sec.  3: AS  11.76.100(c),  provides  an exemption  for                                                                    
     selling  or  giving  tobacco products  to  incarcerated                                                                    
     minors, raising the minimum age  from 19 to 21 years of                                                                    
     Sec.  4:  AS  11.76.105,   relating  to  possession  of                                                                    
     tobacco,   electronic   smoking  products   (ESP),   or                                                                    
     products  containing nicotine,  raises the  minimum age                                                                    
     to possess from 19 to 21 years of age.                                                                                     
     Sec. 5:  AS 11.76.106(b),  relating to the  'behind the                                                                    
     counter'   control   provisions  of   selling   tobacco                                                                    
     products,  allowing  exemptions  for tobacco  shops  or                                                                    
     online sales, raising the minimum,  age to sell from 19                                                                    
     to 21 years of age                                                                                                         
     Sec.  6: AS  11.76.109(a), relating  to other  products                                                                    
     containing nicotine,  including chew, gum,  patches, or                                                                    
     E-cigarette products,  raises the  minimum age  to sell                                                                    
     or give such products from 19 to 21.                                                                                       
     Sec.  7: AS  11.76.109(b),  relating  to exemptions  to                                                                    
     selling products  containing nicotine to  persons under                                                                    
     the  age  of  21,   if  the  product  is  FDA-approved,                                                                    
     prescribed by a  doctor, or given by a  parent or legal                                                                    
     Sec. 8:  AS 11.76.109(d),  relating to  the requirement                                                                    
     for  vendors  to  supervise the  operation  of  ESP  or                                                                    
     nicotine  product vending  machines  (EVM), amends  the                                                                    
     exemption for  EVMs situated in  a private  break room,                                                                    
     provided  there   is  signage  posted   indicating  the                                                                    
     minimum  age  to possess  tobacco  products  is age  21                                                                    
     (from 19).                                                                                                                 
     Sec. 9:  AS 11.76.109(g),  relating to the  penalty for                                                                    
     selling or giving  ESP or nicotine products  to a minor                                                                    
     as being  a violation, raises  the minimum age  from 19                                                                    
     to 21 years of age.                                                                                                        
     Sec.  10:   AS  43.50.105(b),  relating   to  wholesale                                                                    
     tobacco  sales  and  licensees, to  restrict  licensees                                                                    
     from  selling  or   transporting  tobacco  products  to                                                                    
     persons that are at least 21 (from 19) years of age.                                                                       
     Sec. 11:  AS 43.50.150(c),  relating to state  being in                                                                    
     partnership  with  municipalities   in  taxing  tobacco                                                                    
     products, is amended to include taxing ESPs.                                                                               
     Sec.  12:  AS  43.50.300, relating  to  existing  state                                                                    
     excise tax  on tobacco products, is  amended to include                                                                    
     taxing ESPs.                                                                                                               
     2:04:54 PM                                                                                                               
     Sec.  13: AS  43.50.310(b) exempts  the excise  tax for                                                                    
     electronic  smoking   products  that  do   not  contain                                                                    
     nicotine, or those ESPs that are FDA-approved.                                                                             
MR. LAMKIN noted that there are no FDA-approved electronic                                                                      
smoking products at this time.                                                                                                  
     Sec. 14: AS 43.50.320(a),  includes a requirement to be                                                                    
     licensed as  a distributor  of ESPs for  those products                                                                    
     subject to an excise tax.                                                                                                  
     Sec. 15: AS 43.50.330(a),  relating to annual reporting                                                                    
     requirements for tax  purposes, amends existing tobacco                                                                    
     sales reporting to include ESP reporting.                                                                                  
     Sec.  16: AS  43.50.335, relating  to existing  tobacco                                                                    
     tax  credits  and  refunds   for  faulty  or  destroyed                                                                    
     products, to  include credits  for similarly  faulty or                                                                    
     destroyed ESPs.                                                                                                            
     Sec.  17: AS  43.50.340,  relating  to existing  record                                                                    
     keeping  requirements for  licensed businesses  selling                                                                    
     tobacco products,  to also be  required to  track sales                                                                    
     and product information on ESPs being sold.                                                                                
     Sec. 18:  AS 43.50.390(1),  relating to  the definition                                                                    
     of a  distributor of tobacco products,  to also include                                                                    
     ESPs, for  purposes of  identifying business  who bring                                                                    
     ESPs  in and  out of  state, manufactures  ESPs in  the                                                                    
     state, or ships ESPs to retailers in the state.                                                                            
     Sec.  19:   AS  43.50.390(5),  relating  to   the  term                                                                    
     "wholesale  price"  for   purposes  of  taxing  tobacco                                                                    
     products, includes  ESPs as  part of  wholesale pricing                                                                    
     and taxing.                                                                                                                
2:07:00 PM                                                                                                                    
     Sec.  20:   AS  43.50.390  provides  a   definition  of                                                                    
     "electronic  smoking product"  consistent  with use  of                                                                    
     the  phrase elsewhere  in  statute,  specifying an  ESP                                                                    
     means a:                                                                                                                   
          (A)component,  solution, vapor  product, or  other                                                                    
          related product that is  manufactured and sold for                                                                    
          use in an  electronic cigarette, electronic cigar,                                                                    
          electronic  cigarillo, electronic  pipe, or  other                                                                    
          similar  device  for  the  purpose  of  delivering                                                                    
          nicotine  or   other  substances  to   the  person                                                                    
          (B) product  under (A) of  this paragraph  that is                                                                    
          sold  as  part  of a  disposable  integrated  unit                                                                    
          containing a power source and delivery system or                                                                      
          as a kit containing a refillable electronic                                                                           
          smoking system and power source.                                                                                      
     Sec. 21: AS 43.70.075(f),  relating to business license                                                                    
     endorsements for  selling tobacco products,  amends the                                                                    
     existing  requirement  for  signage  to  be  posted  on                                                                    
     vendor  premises,  stating  it being  illegal  to  sell                                                                    
     tobacco or  ESPs to  minors under the  age of  21 (from                                                                    
     Sec. 22:  AS 43.70.075(m), relating to  the process for                                                                    
     suspending   business  licensees   holding  a   tobacco                                                                    
     endorsement,  amends  existing   statute  referring  to                                                                    
     tobacco or ESPs  being sold to minors under  the age of                                                                    
     21 (from 19).                                                                                                              
     Sec.  23: AS  43.70.075(t), relating  to penalties  for                                                                    
     licensees  violating  the  T21  laws,  amends  existing                                                                    
     statute  for  lessening  the  penalties  if  a  license                                                                    
     holder has  a written tobacco  or ESPs sales  policy to                                                                    
     include  employees  not  selling  tobacco  or  ESPs  to                                                                    
     minors under the age of 21 (from 19).                                                                                      
     Sec. 24:  AS 43.70.075(w),  relating to the  appeal and                                                                    
     administrative process of  license suspension, conforms                                                                    
     existing law regarding tobacco and  ESP sales, to apply                                                                    
     to sales to minors under the age of 21 (from 19).                                                                          
     Sec.  25: AS  47.12.030(b),  relating  to the  juvenile                                                                    
     justice  system,  and   minors  accused  of  possessing                                                                    
     tobacco, confirms  existing law to apply  to possession                                                                    
     by minors under the age of 21 (from 19).                                                                                   
     Sec. 26: Applies an effective date of January 1, 2021.                                                                     
2:08:35 PM                                                                                                                    
CHAIR  BISHOP said  he would  hold his  questions until  the next                                                               
hearing so there was time to hear from the invited testimony.                                                                   
2:09:16 PM                                                                                                                    
MARGE  STONEKING, Executive  Director, American  Lung Association                                                               
of Alaska, Anchorage, Alaska, reported  that Alaska achieved a 70                                                               
percent reduction  in cigarette smoking among  youth between 1995                                                               
and  2013  by  following  the Centers  for  Disease  Control  and                                                               
Prevention's  (CDC) comprehensive  tobacco  control program  that                                                               
includes a  strong public media  component, cessation  systems, a                                                               
smoke-free  workplace  law,  and  increasing  tobacco  taxes.  E-                                                               
cigarettes threaten  that progress but raising  the minimum sales                                                               
age to 21 is  a tool to help stem this  epidemic. She pointed out                                                               
that youth are particularly vulnerable  to the impacts of tobacco                                                               
use  and that  the tobacco  industry has  long targeted  this age                                                               
group.  In fact,  big tobacco  spends  about $17  million a  year                                                               
marketing their products in Alaska  while smoking costs the state                                                               
about $438  million annually in  healthcare costs, 93  million of                                                               
which are Medicaid dollars.                                                                                                     
MS.  STONEKING said  the data  shows that  95 percent  of current                                                               
tobacco or e-cigarette users started  using tobacco before age 21                                                               
so it's particularly important to  prevent teens from starting to                                                               
smoke.  She  described the  spending  bill  that President  Trump                                                               
signed in  December 2019  that raised the  legal age  for tobacco                                                               
products  from 18  to 21  as  a major  accomplishment. It  became                                                               
effective on the  date it was signed and there  are no exemptions                                                               
anywhere in  the U.S. She  described the federal  Synar Amendment                                                               
that  requires states  to enforce  the minimum  age laws  or risk                                                               
losing substance abuse grant funds,  and reported that Alaska has                                                               
been 95  percent compliant. She  said SB 182 updates  the statute                                                               
to reflect the  age requirements in the new federal  law and adds                                                               
electronic  smoking devices  to the  definition of  other tobacco                                                               
products  so that  they are  taxed  fairly along  with all  other                                                               
tobacco products.  She said  this will also  reduce use  by young                                                               
people  because  a ten  percent  increase  at the  cash  register                                                               
reduces consumption among youth by about seven percent.                                                                         
MS.  STONEKING  reported  that  a 2019  statewide  poll  for  the                                                               
American Lung Association  found that 73 percent  of Alaskans who                                                               
were polled  supported taxing e-cigarettes and  vaping devices at                                                               
the same, 75  percent of wholesale, rate as  cigarettes. She said                                                               
this is  consistent with  the $2  per pack  tax on  cigarettes so                                                               
$3.75  would be  added  to a  $10 pack  of  Juul cartridges,  for                                                               
MS. STONEKING  said the  Alaska 2019  Youth Risk  Behavior Survey                                                               
results have  not been  released but the  expectation is  that it                                                               
will show  a drastic  increase in  the prevalence  of e-cigarette                                                               
and vape  usage, which is  reflective of the 78  percent national                                                               
increase  of youth  vaping between  2017 and  2018. She  said the                                                               
American  Lung  Association and  its  partners  are working  with                                                               
school districts  to update policies  and programs to  respond to                                                               
this increase  in youth  vaping but the  legislature needs  to do                                                               
its part by passing SB 182.                                                                                                     
2:19:10 PM                                                                                                                    
SENATOR  STEVENS   expressed  appreciation  that   her  testimony                                                               
touched on  both the age  and taxation  issues and the  idea that                                                               
education  is necessary  for children  and adults.  He noted  his                                                               
surprise to learn  from students and teachers  that parents often                                                               
supply their kids with vaping products. He asked her to comment.                                                                
MS.  STONEKING  replied the  American  Lung  Association is  also                                                               
fighting the battle  of misinformation about the  safety of these                                                               
products  and is  encouraging parents  to  educate themselves  by                                                               
looking at the video at thevapetalk.org.                                                                                        
CHAIR BISHOP suggested  she leave her written  testimony with the                                                               
committee aide.                                                                                                                 
2:21:03 PM                                                                                                                    
JOE   DARNELL,  Chief   Investigative   Officer,  Tobacco   Youth                                                               
Education &  Enforcement Program, Division of  Behavioral Health,                                                               
Department of Health and Social  Services (DHSS), Juneau, Alaska,                                                               
said  he would  touch on  what  is happening  in enforcement.  He                                                               
explained  that the  youth enforcement  program  started in  2003                                                               
when underage sale of tobacco to  minors was 36 percent. That has                                                               
dropped to  the 4-6 percent  range with education and  changes in                                                               
the licensing laws.                                                                                                             
When  vaping   became  popular,  baseline  studies   showed  that                                                               
underage use of  vaping products over a three year  period was 37                                                               
percent   statewide.  When   data  from   Anchorage  was   viewed                                                               
independently,  it showed  the sell  rate of  vaping products  to                                                               
youth  was  50  percent.  Every other  vape  shop  was  blatantly                                                               
selling to kids, he said. The  numbers started to drop once SB 15                                                               
went into effect on January  1, 2019. In Anchorage, sales dropped                                                               
from 50 percent to 30 percent.                                                                                                  
He said  SB 182 would align  state law with the  new federal law,                                                               
which would help  both the state and businesses  because the laws                                                               
conflict and this puts merchants in  limbo. He said 95 percent of                                                               
the tobacco  and e-cigarette vendors  want to do the  right thing                                                               
and follow the law but it's difficult when the laws don't jibe.                                                                 
MR. DARNESS noted  that the ads in convenience  store windows now                                                               
feature e-cigarettes  more frequently  than tobacco. He  said the                                                               
effort to  reduce tobacco  smoking in  youth has  been successful                                                               
and an equally robust effort is needed for electronic products.                                                                 
2:24:48 PM                                                                                                                    
CHAIR BISHOP asked if the  youth enforcement program receives any                                                               
federal money.                                                                                                                  
MR.  DARNELL  replied  the   program  receives  money  indirectly                                                               
through the Tobacco Master Settlement Agreement.                                                                                
CHAIR  BISHOP  said  he  wanted   to  know  if  the  state  would                                                               
jeopardize receipt  of federal  funds if it  did not  comply with                                                               
the new federal law.                                                                                                            
2:25:40 PM                                                                                                                    
SENATOR STEVENS  asked Mr.  Darnell what  happens to  youths that                                                               
violate this law.                                                                                                               
MR.  DARNELL explained  that the  young people  who work  for the                                                               
enforcement  program are  interns  with the  state. They  receive                                                               
several days  of training and  then visit tobacco/vape  shops and                                                               
try  to  purchase  product.  If   the  intern  is  successful  in                                                               
purchasing  tobacco  or  e-cigarettes,   the  vender  receives  a                                                               
citation that requires a court  appearance and a fine that ranges                                                               
from  $300 to  $500. Any  convictions are  sent to  licensing and                                                               
that is  used to  suspend the tobacco  endorsement. On  the first                                                               
offense the retailer can show  seven things they were doing ahead                                                               
of  time  to   mitigate  their  suspension  time.   There  is  no                                                               
opportunity to mitigate a suspension after the first offense.                                                                   
2:27:28 PM                                                                                                                    
CHAIR BISHOP held SB 182 in committee for future consideration.                                                                 
2:28:09 PM                                                                                                                    
At ease                                                                                                                         
^Presentation: Alaska Hire                                                                                                      
  Presentation: Calculating Zones of Underemployment and Other                                                              
  Measures Used in Alaska Employment Preference Determinations                                                              
2:29:16 PM                                                                                                                    
CHAIR BISHOP reconvened the meeting  and announced the last order                                                               
of  business  would be  a  presentation  on  Alaska Hire  by  the                                                               
Research and Analysis Section of DOLWD.                                                                                         
2:29:39 PM                                                                                                                    
DAN  ROBINSON,  Chief, Research  &  Analysis  (R&A), Division  of                                                               
Administrative  Services,  Department   of  Labor  and  Workforce                                                               
Development  (DOLWD),  Juneau,  Alaska,  introduced  himself  and                                                               
advised  that   Mr.  Kreiger  would   talk  about   the  detailed                                                               
computations  that are  done in  support of  Alaska statutes  and                                                               
regulations   that  historically   have   been   used  to   grant                                                               
preferential hire for Alaska residents.                                                                                         
He  noted that  the role  of R&A  is primarily  computational and                                                               
does  not  change  with different  administrations.  Among  other                                                               
things, they produce  an annual report on  nonresident workers in                                                               
Alaska that  has specifics by  industry and occupation  which may                                                               
be relevant to the discussion today.                                                                                            
MR.  ROBINSON said  R&A's role  in the  process of  determining a                                                               
zone of  underemployment is  to demonstrate  the need  by showing                                                               
that parts  of Alaska  have a higher  unemployment rate  than the                                                               
nation  and  that  Alaska  has an  available  supply  of  trained                                                               
workers  if   a  preferential   determination  is  made   by  the                                                               
2:31:32 PM                                                                                                                    
ROB KREIGER,  Economist, Research  & Analysis (R&A),  Division of                                                               
Administrative  Services,  Department   of  Labor  and  Workforce                                                               
Development  (DOLWD), Juneau,  Alaska,  stated that  he has  been                                                               
with  Research &  Analysis  (R&A)  for almost  20  years and  has                                                               
worked specifically on the resident hire process since 2013.                                                                    
MR. KREIGER stated  that R&A was asked to provide  details on how                                                               
zones of  underemployment are calculated.  Their role  is limited                                                               
to  running an  established  series of  calculations every  other                                                               
fiscal  year.   The  commissioner  uses  these   calculations  to                                                               
determine zones of underemployment  and which occupations qualify                                                               
for resident hire preference.                                                                                                   
He  displayed  slide  3  that lists  the  relevant  statutes  and                                                               
regulations.  He  noted  that  the  committee  heard  a  detailed                                                               
discussion of Title 36 during the  last hearing. He noted that AS                                                               
36.10.150 is  specific to resident hire  determinations. It gives                                                               
the commissioner of labor broad  discretion in determining a zone                                                               
of underemployment.  Regulations specifically  called out  in the                                                               
statute include:                                                                                                                
   • 8 AAC 30.064 - Hiring preference for residents of zone of                                                                  
     underemployment, which gives guidance on the numbers used                                                                  
     in the calculations and provides some examples of how to                                                                   
     run the calculations                                                                                                       
   • 8 AAC 30.068 - Determination that lack of employment                                                                       
     opportunities  has  substantially   contributed  to  serious                                                               
     social  or  economic  problems.  This  must  be  taken  into                                                               
     consideration in the  process but is not  something that R&A                                                               
     provides  as  a  number.  Past public  testimony  and  other                                                               
     published works have established a link between high                                                                       
     unemployment and social & economic problems and are                                                                        
     generally used in consideration of this regulation.                                                                        
   • 8 AAC 30.069     Determination of peculiar source of                                                                       
     unemployment is often referred to as the percent of                                                                        
     nonresident. It provides R&A with more specifics when                                                                      
     calculating the numbers.                                                                                                   
2:34:21 PM                                                                                                                    
MR. KREIGER  explained that R&A  uses two main  calculations. The                                                               
first  is  the  zone  of underemployment,  which  refers  to  the                                                               
geographic area  for which resident hire  preference applies. For                                                               
this purpose,  the term  refers to workers  in a  particular zone                                                               
that have the skill  to do a job if work  was available. The data                                                               
used to calculate the zone  of underemployment are the Alaska and                                                               
U.S. average seasonally adjusted  unemployment rates for the most                                                               
recent 12-month  period. The rates  of unemployment  are compared                                                               
to see  whether Alaska's rate was  higher or lower than  the U.S.                                                               
as  a  whole.  If  Alaska's  rate  was  10  percent  higher,  the                                                               
commissioner  generally   deems  the  entire  state   a  zone  of                                                               
MR. KREIGER displayed the calculation example on slide 6:                                                                       
   • For the 2019 determinations, unemployment rates were 6.8                                                                   
     percent for Alaska and 3.8 percent for the U.S.                                                                            
   • Alaska's unemployment rate was about 79 percent higher than                                                                
     the U.S. rate. That is well above the 10 percent threshold                                                                 
     for the commissioner to declare a statewide zone of                                                                        
The actual math calculations are as follows:                                                                                    
   • 6.8  3.8 = 3.0 percent                                                                                                     
   • (3.0 / 3.8 ) * 100 = 78.9 percent above the U.S. rate                                                                      
He noted that if the rate was 10 percent or lower, the                                                                          
initial test would not qualify and the commissioner would                                                                       
have the discretion to look at other methods.                                                                                   
MR. KREIGER  said the  second calculation  R&A uses  involves the                                                               
occupations within  the zone of underemployment  that qualify for                                                               
resident   hire  preference.   This  calculation   looks  at   23                                                               
occupations  and applies  formulas  using internal  data sets  to                                                               
determine  which occupations  do  and which  do  not qualify  for                                                               
resident  hire   preference.  The  same  occupations   have  been                                                               
evaluated for  at least 25  years and were probably  derived from                                                               
Davis  Bacon regulations  regarding prevailing  wages on  federal                                                               
and state  construction projects. He noted  that the occupations,                                                               
listed on slide 7, vary in  skill level from highly skilled craft                                                               
occupations to culinary workers.                                                                                                
2:39:05 PM                                                                                                                    
MR. KREIGER explained that for  an occupation to be eligible                                                                    
for resident  hire employment preference,  all three  of the                                                                    
following criteria must be met:                                                                                                 
   • Nonresident percentage in the occupation is over 10                                                                        
   • Percent of total residents in that occupation who are                                                                      
     unemployed is over 10 percent                                                                                              
   • Percent of unemployed residents with experience in                                                                         
     that occupation relative to its total workers is over                                                                      
     10 percent                                                                                                                 
MR.  KREIGER explained  that slide  9 is  an excerpt  of the                                                                    
actual table for employment  preference determinations for a                                                                    
zone of  underemployment. The example shows  just carpenters                                                                    
and engineers  & architects but  the actual table  lists all                                                                    
23  occupations.  Column 1  is  the  total resident  workers                                                                    
identified  in the  particular occupation;  column 2  is the                                                                    
total  nonresident workers  in the  occupation; column  3 is                                                                    
the percent nonresident workers  in the occupation; column 4                                                                    
is the  number of resident workers  identified as unemployed                                                                    
or  looking for  work in  the  occupation; column  5 is  the                                                                    
percent  of  unemployed  residents in  the  occupation;  and                                                                    
column 6  is the  percent of available  unemployed residents                                                                    
relative to total workers in  the particular occupation. For                                                                    
an  occupation  to  qualify for  resident  hire  preference,                                                                    
columns 3, 5,  and 6 must be over 10  percent. He noted that                                                                    
in this example, all the  criteria for carpenters are met so                                                                    
the  occupation  qualifies. In  the  case  of engineers  and                                                                    
Architects, column 3  qualifies but columns 5 and  6 do not.                                                                    
He  said he  selected  these occupations  because they  have                                                                    
similar  numbers of  total workers  and  similar numbers  of                                                                    
percent nonresident but the number  of workers identified as                                                                    
available  or looking  for work  in the  occupation is  much                                                                    
less for engineers and architects.  As a general rule, there                                                                    
are fewer people with architect  and engineering skills than                                                                    
people with carpenter skills.                                                                                                   
MR. KREIGER described the four  primary sources of data used                                                                    
in the occupational calculations:                                                                                               
   • Wage records used to calculate workers by occupation                                                                       
These  records  are  derived  from  reports  from  employers  who                                                               
participate in the unemployment  insurance program and file every                                                               
quarter. For every worker who  earned wages, the employer reports                                                               
the occupation, which  borough or census area  the person worked,                                                               
and the  total wage  they earned. From  this information,  R&A is                                                               
able  to  identify   the  people  working  in  each   of  the  23                                                               
occupations. He noted that information  is entered into columns 1                                                               
and 2 of the table described in slide 9.                                                                                        
   • Permanent Fund Dividend applications       used to                                                                         
     calculate Alaska residency columns 1 and 2                                                                                 
Someone who applies for a  Permanent Fund Dividend in either                                                                    
of the  two most recent  years is considered a  resident for                                                                    
the purpose of this analysis.                                                                                                   
   •  Claims for unemployment insurance  used to determine                                                                      
      number of unemployed workers available for work This                                                                      
     gets information for column 4                                                                                              
R&A  looks at  the work  history of  people who  have active                                                                    
claims for unemployment  insurance to see if the  work is in                                                                    
an area related to the 23  occupations listed on slide 7. If                                                                    
the person has  work experience in the  previous quarter but                                                                    
happens  to  be  collecting unemployment  insurance  in  the                                                                    
quarter  under  analysis  and  they   are  a  resident,  the                                                                    
information  goes  into column  4.  That  is the  supply  of                                                                    
unemployed residents available for work.                                                                                        
   • Active resumes and work history in ALEXsys  Used to                                                                        
        identify workers looking for work in particular                                                                         
In  addition  to the  people  who  have  a work  history  in                                                                    
ALEXsys and are  actively looking for work in any  of the 23                                                                    
occupations, R&A  also does general work  searches for those                                                                    
occupations  and adds  the information  to the  unemployment                                                                    
insurance claims.                                                                                                               
Cleanup and  checking is done  to ensure that  people aren't                                                                    
counted  more  than  once  and  the  result  is  two  unique                                                                    
datasets that are used for analysis.                                                                                            
2:44:42 PM                                                                                                                    
CHAIR BISHOP asked for a description of ALEXsys.                                                                                
MR.  KREIGER  explained  that it  is  an  online  job-seeker                                                                    
resource that allows someone to  set up an account, create a                                                                    
resume, search for  jobs, apply for jobs,  and receive labor                                                                    
market information for a certain area.                                                                                          
2:45:48 PM                                                                                                                    
MR. ROBINSON  added that  the broad  purpose is  to identify                                                                    
the  supply of  workers who  are qualified  and looking  for                                                                    
work in the relevant occupation.                                                                                                
MR. KREIGER said  what isn't known is the  percentage of the                                                                    
total people looking  for jobs who actually  use ALEXsys. He                                                                    
said  we suspect  it is  probably  a fraction  of the  total                                                                    
people  looking  for  work  so  the  numbers  R&A  uses  are                                                                    
probably conservative.                                                                                                          
CHAIR BISHOP suggested  the committee go to  the Job Service                                                                    
to   see  how   ALEXsys  works.   He  described   it  as   a                                                                    
comprehensive tool.                                                                                                             
MR. KREIGER said  the math that R&A uses  is not complicated                                                                    
but the  hard part  is how  to combine  the data  sources to                                                                    
come  up with  the numbers  in a  consistent and  defensible                                                                    
2:47:32 PM                                                                                                                    
SENATOR GRAY-JACKSON  said she  assumes the  two occupations                                                                    
shown on slide 9 are just a sample.                                                                                             
MR. KREIGER  said that's correct.  The calculations  are run                                                                    
for each of  the 23 occupations. He noted that  the chart on                                                                    
slide 9 shows the actual  data for those two occupations for                                                                    
the most recent quarter, which is always the third quarter.                                                                     
2:49:04 PM                                                                                                                    
CHAIR  BISHOP thanked  the  presenters  and reiterated  that                                                                    
Research  &  Analysis   is  one  of  the   best  assets  the                                                                    
Department of  Labor and Workforce Development  (DOLWD) has.                                                                    
He  said,  "I'll  put  them  up  against  any  research  and                                                                    
analysis department in any state in the union."                                                                                 
2:50:32 PM                                                                                                                    
There being no further business to come before the                                                                              
committee, Chair Bishop adjourned the Senate Labor and                                                                          
Commerce Standing Committee meeting at 2:50 p.m.                                                                                

Document Name Date/Time Subjects
L&C Workers Compensation Board Shaw #1.pdf SL&C 2/27/2020 1:30:00 PM
L&C Architects, Engineers, and Land Surveyors Fritz #1.pdf SL&C 2/27/2020 1:30:00 PM
SB182 Sponsor Statement ver. A.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 Sectional Analysis ver. A.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 DRAFT Fiscal Note DCCED-CBPL 02-21-2020.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 DRAFT Fiscal Note DHSS-BHA- 02-21-2020.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 DRAFT Fiscal Note DOR-TAX 02-21-2020.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 Presentation 02-27-2020.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 Backup Document FDA Youth Survey 11-11-2019.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 Backup Document DHSS Flyer 02-2020.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 Backup Document AK Tobacco Facts 2019.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
SB182 Backup Documents- Research- Links to Videos 02-26-2020.pdf SL&C 2/27/2020 1:30:00 PM
SB 182
Alaska Hire Zones of Underemployment.pdf SL&C 2/27/2020 1:30:00 PM
Alaska Hire