#sb368    SENATE BILL NO. 368  "An Act relating to taxes on cigarettes and tobacco  products; relating to tax stamps on cigarettes; relating to  forfeiture of cigarettes and of property used in the  manufacture, transportation, or sale of unstamped  cigarettes; relating to licenses and licensees under the  Cigarette Tax Act; and providing for an effective date."      This was the first hearing for this bill in the Senate Finance  Committee.    Co-Chair Wilken informed the Committee that this legislation  would increase the cigarette tax from the current one-dollar per  20-cigarette pack to two dollars per pack and would increase the  Other Tobacco Products tax from 75-percent to 100-percent of the  wholesale cost. Furthermore, he specified that the legislation  would allow the Department of Public Safety "to seize and  dispose of assets used in cigarette smuggling and tax evasion  activities." Co-Chair Wilken identified the bill version before  the Committee as SB 368, Version 23-GS2116\A.    JOEL GILBERTSON, Commissioner, Department of Health and Social  Services, stated that this legislation would increase the  cigarette tax from one dollar to two dollars per pack. He  explained that this legislation is being introduced "because  tobacco is the number one public health threat" for the State in  that it is the State's "leading cause of death, disability and  chronic illness."    Commissioner Gilbertson avowed that increasing the tax levy  would continue to produce health benefits to Alaskans, as he  noted, that since 1997 when the current one dollar tax went into  effect, tobacco consumption in the State has declined 30- percent. He informed that increasing this user tax would have  the most dramatic impact on young Alaskans, as increasing the  unit price on tobacco "is one of the most effective ways of  preventing that population from ever beginning a lifelong  addiction to smoking." He stated therefore that a substantial  increase in the tax would insure that Alaskans, particularly  young Alaskans, with limited resources would choose a more  healthy avenue in which to spend their money.    Commissioner Gilbertson declared that anti-smoking efforts have  been successful, as, he disclosed that statistics developed from  a recent youth behavior survey [copy not provided] indicate that  there has been a 50-percent decline in tobacco use in young  people. He declared that increasing the tax, as proposed in this  bill, would continue that trend.    Commissioner Gilbertson remarked that the State's tobacco  enforcement efforts have successfully lowered the number of  underage Alaskans illegally purchasing tobacco products in  retail establishments from 30.2 percent to ten percent in the  last year. This action, he shared, has brought the State into  compliance with federal mandates. He asserted that were tobacco  use to further decline by 15 percent as result of the proposed  tax, "1,800 lives would be saved from premature death due to  smoking."    Commissioner Gilbertson declared that, in addition to lowering  tobacco use in young Alaskans, the increased tax would be an  effective tool in changing behavioral patterns and improving the  health of adults in the State. He estimated that a tax increase  "would be the direct catalyst" in encouraging 3,500 Alaskan  adults to stop smoking, which he shared would save approximately  800 lives. He noted that in conjunction with other entities, the  Department provides opportunities for people to participate in  tobacco cessation programs.    Commissioner Gilbertson pointed out that included in the number  of individuals who would cease to smoke would be expectant  mothers. He stated that this would equate to assisting 850  babies from maternal tobacco exposure within the next five  years.    Commissioner Gilbertson reported that the Alaskan group having  the highest number of smokers, 44-percent verses the norm of 22- percent, is Alaska Natives. He commented that while the number  of Alaska Natives who smoke continues, "to be disproportionately  higher" than other groups, there has been a decrease in the  number smoking since the one-dollar tobacco tax was implemented.  He additionally noted that Alaska Native high school youth are  four times more likely to smoke that the general youth  population.    Commissioner Gilbertson informed that the Campaign for Tobacco  Free Kids compiled an analysis of health costs that indicates  that an increased tobacco tax would assist in reducing smoking  related health expenses by $1.6 million over the next five years  as a result of fewer smoking related heart attacks and $1.8  million would be saved from expenses associated with stokes. He  shared that information garnered from a [unspecified] 1998  comprehensive study denoted that smoking related medical  expenses amounted to $133 million in the State with $137 million  in lost productivity due to tobacco related deaths. Additional  expenses, he shared, were incurred by smoking related work  absences and such things as smoking breaks. He stated that  smoking related expenses have an "unfortunate" and "huge  economic impact on this State."    Commissioner Gilbertson stated that "17 large econometric  studies" have been utilized by the Department in order to  determine how pricing would affect the consumption of tobacco  products. He shared that all 17 studies reflect that there is "a  direct correlation between increase in tobacco price and a  decline in smoking." He stated that he would provide the  Committee with a copy of a recently completed Department's  Division of Public Health report titled "Tobacco in the Great  Land: A Portrait of Alaska's Leading Cause of Death" [copy not  provided] which substantiates the Department's position that  "tobacco is the number one public health threat facing the  State" as it is, he reiterated, the leading cause of death,  disability and chronic illness in the State. He concluded that  increasing the tobacco tax by one dollar per pack would be a  "prudent" thing to do, as it would prevent people from starting  to smoke and would assist in getting other to stop.    JOHANNA BALES, Program Manager, Cigarette and Tobacco Products  Excise Tax, Department of Revenue, testified via teleconference  from an offnet site and presented a technical overview of the  legislation in that it, in addition to increasing the current  cigarette tax from one dollar per pack to two dollars, would  increase the Other Tobacco Products tax from 75 percent to 100  percent of the wholesale cost. She informed that New Jersey  currently has the highest cigarette tax in the nation at $2.05  per pack, and that Rhode Island would soon implement a $2.45  cent per pack tax. In addition, she communicated that the state  of Washington has the highest Other Tobacco Products tax at 129  percent of the wholesale cost.    Ms. Bales noted that other provisions in the bill would increase  the annual direct buying retail license fee from $25 to $50 in  order to align these license fees with those currently paid by  distributors, as, she contended, these two entities more often  than not, "operate in the same business." She also noted that  the bill includes technical corrections that would eliminate the  double-taxation issue that might arise were in-State dealers to  purchase from out-of-state dealers who are licensed by the  State.    Ms. Bales continued that the bill would also allow distributors  dealing with recent manufacturers' returned goods policy changes  to possess unstamped cigarettes and it would also provide them  with credits for stamped cigarettes sold out-of-State. She  clarified, however, that the distributor must prove they "are  properly licensed in the other state where the cigarettes were  sold" before the credit would be issued.    Ms. Bales noted that, as reviewed by Commissioner Gilbertson,  the seizure section in the bill would allow the State to seize  assets that are in violation of the State's cigarette stamp tax  laws. She stated that this enforcement tool would assist in  promoting compliance.    Ms. Bales noted that the bill also includes "a floor stock tax  provision" which would require all entities selling cigarettes  in the State to conduct an inventory upon the enactment of the  new tax, and remit the difference between the old and new stamp  tax rate to the State within 30 days. She informed the Members  that approximately 200-million cigarettes were stockpiled,  primarily by retailers and distributors, prior to the State's  last cigarette tax increase. She estimated that scenario to have  resulted in approximately $7 million dollars in lost revenue to  the State. She also noted that the State received numerous  consumer complaints stating that they were charged the new tax  rate on the first day it was enacted, "when in fact, none of the  distributors or retailers had actually paid that increase."    Ms. Bales shared that the federal government and other states  commonly institute similar floor stock taxes.    Co-Chair Wilken noted that Ms. Bales' written testimony [copy  provided] is in the Members' packets.    Senator Bunde asked the Departments' positions on including  tobacco products such as smokeless tobacco in this bill.    Ms. Bales reminded that the tax on Other Tobacco Products was  increased in 1997 from 25 percent to 75 percent of the wholesale  cost. She noted that this bill would increase that level to 100  percent. However, she continued, when the Department conducted a  study specifically addressing chewing tobacco products such as  Copenhagen, for the Department of Health and Social Services, it  was determined that despite the tax increase implemented in  1997, there has been "a fairly significant increase in the use  of that product in the State." One of the problems, she pointed  out, is that, currently, Other Tobacco Products are not subject  to tax if an individual imports that product for personal  consumption. She stated that, even with the tax increase as  proposed in this legislation, individuals purchasing and  importing other tobacco products into the State through such  avenues as the Internet or other out-of-State purchases "would  not be subject to any of the tax, period."    Senator Bunde ascertained that this is good reason to include  those who import for personal consumption into this bill, as he  contended, not including them "would drive business out of  Alaska and puts retailers at a disadvantage."    Ms. Bales stated that the Department of Revenue would support  Senator Bunde's suggestion for two reasons: one, it would  support local business; and two, an increase in price might  curtail use of the product.    Senator Dyson understood that "the demonstrable health risks" of  non-smoked products "are significantly less" than the risks  associated with those that are inhaled.    Commissioner Gilbertson responded that, "it would be correct to  say that the health risks are not identical"; however, he stated  that, "the Department would not support a statement that the  health risks are so reduced as to be one that is diminished." He  shared that the Department could provide material attesting to  the health risks associated with both smokeless and smoked  tobacco products.    Senator Dyson agreed; however, he commented that smokeless  products pose "no risk to others from secondhand smoke and no  risk to a fetus from oxygen deprivation that happens with a  smoking mother." In addition to stating that its addiction rate  might be similar to that of cigarettes, he acknowledged that  chewing tobacco products does incur such things as gum and  throat cancer. However, he continued, its contribution to lung  cancer is minimal.    Senator Dyson asked how the legislation would affect those who  roll their own product from loose tobacco. He also noted that a  Surgeon General report, issued approximately 15 years earlier,  stated that pipe tobacco health risks are significantly less  than manufactured cigarettes. He pointed out that not all  tobacco products have the same cost impact and health risk and,  therefore, he attested they should not be treated the same.    Commissioner Gilbertson declared that, "varying tobacco products  have varying risks." He reiterated that the Department could  provide scientific study information to the Members. He noted  that, while he was unfamiliar with the pipe tobacco research  referred to, studies support the position that all tobacco  products "carry some health risks." Furthermore, he voiced that  the Department views all those health risks as negative health  risks, of which the State should discourage.    Senator Dyson asked whether the aforementioned impacts of the  tobacco tax increase on such things as mortality rates, were  annual projections.    Commissioner Gilbertson clarified that the aforementioned  results would be the accumulative affect of this tax increase.    Senator Dyson asked whether information could be provided  regarding annual death rates and usage effects of the tax.    Commissioner Gilbertson replied that the most noticeable long- term health benefit that would result from the tax increase  would be a reduction in the number of young Alaskans who would  choose not to smoke. He informed the Committee that the majority  of long-term tobacco addicts partake of their first tobacco  product before the age of 18.    Senator Dyson voiced that there is public discontentment  regarding how the money raised from this tax has been allocated,  as there is general perception that it should be used to promote  cessation and prevention programs. He asked for a recap of how  the current tobacco tax revenue is allocated; specifically the  amount spent on cessation and prevention programs, and whether  this legislation would alter the current scenario.    Commissioner Gilbertson stated that this legislation would not  dedicate its revenues for tobacco control programs. Continuing,  he informed that the Department, individually and in conjunction  with the Tobacco Control Alliance partners, manages a tobacco  control program. Furthermore, he explained that the majority of  the monetary support for these programs is supported by Tobacco  Master Settlement money with additional funding generated from  licensure fees. He noted that approximately $5 million would be  spent on these programs in FY 05.    Ms. Bales disclosed that currently 76-percent of the revenue  generated from the tobacco tax is distributed to the State's  School Fund and 24 percent is deposited into the general fund.  She explained that increasing the per pack tobacco tax from one  dollar to two dollars would generate double the revenue; and,  she attested that even though this legislation would reduce the  percentage allocation for the School Fund to 38 percent, the  money generated would remain constant. Continuing, she stated  that the amount allocated to the general fund would increase to  62 percent.    Ms. Bales noted that 100 percent of the revenue generated from  the tax on Other Tobacco Products is currently, and would  continue to be, deposited into the general fund.    Ms. Bales clarified that there is no language in the Master  Tobacco Settlement agreement specifying that it be used to fund  such things as tobacco cessation and education programs. She  voiced the understanding that the money could be used to  reimburse the State's general fund for such things as Medicaid  expenses. She concluded that it is the Legislature's decision as  to how to spend that money.    Senator Olson asked for assurance that language in the bill  pertaining to the seizure of assets as specified on page five,  line three and page six, line eight would not jeopardize such  things as aircraft and vehicles owned by common carriers who  might unknowingly transport cigarettes.    Ms. Bales understood that the forfeiture provisions which were  drafted by the Department of Law, would provide "innocent person  relief" in the case that their property were unknowingly used by  a cigarette tax violator. She assured that provisions are also  included to address situations, for example, in a village  wherein "a family's sole source of transportation would be  protected from seizure."    Ms. Bales reminded that violations of the tobacco tax would not  apply to personal cigarette consumption.    Senator Olson asked regarding the scenario in which a common  carrier who, as a means of business, transports cigarettes.    Ms. Bales clarified that a violation would not occur unless the  common carrier knowingly transported illegal cigarettes. She  noted that she would confirm this interpretation of the language  with the Department of Law.    Co-Chair Wilken asked Ms. Bales to review comments included in  an April 4, 2004 letter [copy on file] he had received from  wholesale distributor, Mike Elerding of Northern Sales, as well  as two proposed amendments that pertain to comments in that  letter.    Ms. Bales stated that she would review that information and  provide a response at the next hearing on this bill.    Senator Hoffman asked whether a portion of the revenue generated  from this tax increase would be used to support anti-smoking  advertising campaigns.    Commissioner Gilbertson responded that this bill specifies that  the revenue generated by this legislation would be deposited  into the general fund. He reiterated that the Department  operates a tobacco cessation and education program in  conjunction with the Tobacco Alliance.    Senator Hoffman reminded that the previous tobacco tax  legislation required funds to be spent on anti-smoking  advertisements, and he attested that that effort was responsible  for a downturn in cigarette consumption. Therefore, he  questioned the reason that a similar effort is not included in  this legislation.    Commissioner Gilbertson replied that a price increase is a  "tremendous deterrent" in that studies indicate that for every  ten percent price increase in the cost of a cigarette product,  there is a corresponding three-point-seven (3.7) percent  decrease in consumption. He concurred that the media campaign  was successful and would continue to be effective in reducing  general tobacco consumption; however, he stated that this  legislation does not allocate funds toward that effort. He  stated that the Governor could propose and the Legislature could  fund those efforts.    Senator Hoffman, referring to the high number of Native smokers,  asked what efforts would be exerted to reduce tobacco usage in  this group.    Commissioner Gilbertson responded that while there is a large  variety of health disparities in this State, the disparity  between cigarette consumption between Native and non-Native  populations is an important issue. He specified that the Tobacco  Control program has dedicated funds to target tobacco usage in  Natives via outreach efforts in conjunction with such groups as  the Alaska Native Tribal Health Consortium. Furthermore, he  stated, the Native Health Board, the Alaska Native Tribal Health  Consortium and other public health consortiums have been  supportive of this legislation and have agreed that increasing  the cost of tobacco products would be an effective public health  tool. He also noted that they have testified in support of this  legislation. He declared that while stronger efforts could be  exerted, efforts have been made in this regard.    Senator Hoffman understood therefore that this legislation does  not contain specific measures to address the Native tobacco use  issue.    Co-Chair Green communicated that dedicated funds should not be  an issue "at this table." On another note, she asked regarding  the success of "sting operation" efforts in urban and rural  areas.    Commissioner Gilbertson stated that tobacco enforcement efforts  have been successful throughout the State. He explained that  each state receives federal alcohol and mental health block  grant funds, the amount of which is contingent on the State's  successful implementation of a tobacco enforcement program. He  defined success "as a lower than 20 percent sales rate to  underage minors who attempt to purchase tobacco products." Were  this level of enforcement not obtained, he continued, the State  could loose up to 40-percent of its block grant funding. He  shared that the State has been non-compliant for last five years  in that its compliant rate has exceeded 30 percent per year. He  stated that this is unacceptably high and that as a result the  State has had to dedicate funds in the form of a cumulative  penalty, reaching approximately one million dollars in recent  years, so as not to loose the block grants in their entirety. In  the meantime, he communicated, the Department has worked with  retailers and others to raise awareness, improve training, and  improve enforcement efforts in this regard. He noted that, as a  result of these efforts, the illegal sales rate has recently  declined to ten percent.    Senator Olson noted that the graph titled "Cigarette  Importations FY 1996 - FY 2002 and Cigarette Stockpiling in FY  1998" [copy on file] reflects a dramatic decease in 1997 when  the cigarette tax was increased to one dollar per pack. However,  he noted that since 1997, the volume of cigarettes being  purchased has continued to increase. He questioned whether the  slope of the increase would indicate that over time, any  positive impact of the proposed two-dollar a pack tax would  diminish.    Commissioner Gilbertson responded that he could not adequately  provide a statistical answer; however, he noted that while the  number of cigarettes being imported into the State is  increasing, overall it is a minor issue as 95 percent of the  tobacco products consumed in the State are bought through local  licensed retailers in the State.    DORIS ROBBINS, Volunteer, Juneau Clean Air and Alaskans for  Tobacco Free Kids, noted that the Governor has requested that 20  percent of the Master Tobacco Settlement fund be spent on  education and cessation efforts in FY 05. On behalf of the  organizations she represents, she voiced support for the  proposed tobacco tax increase, as, she declared, it would assist  in stopping a large number of people, primarily youth, from  smoking. Were the legislation passed, she approximated that  9,100 kids would not start smoking. She stated that the majority  of smokers begin to smoke when they were children, and she  continued, were the price to deter youth from smoking, it would  serve to reduce the number of "next generation smokers." She  stated that other benefits would include a reduction in smoking  affected births; would save lives of numerous adults who  currently smoke; and would result in lowering long term medical  expenses. She noted that in order to adequately cover today's  medical expenses, the tax level should be $6.38 per pack, as she  shared that $60 million is required annually by Medicaid to  provide for tobacco related illness care. She stated that  efforts are being developed to educate children at an early age  of the health dangers associated with tobacco use. She also  stated that it is "a myth" that crewing tobacco would not affect  a baby. She recounted Doctor Robert Urata's testimony to a House  of Representatives committee in which he declared that tobacco  products are "so poisonous" that were they would fail to receive  federal Food and Drug Administration approval were they to apply  for authorization today. She stated that 82 percent of Alaskan  voters are very concerned about the use of tobacco products by  young people. She urged the Committee to pass this legislation  and also consider supporting the Governor's proposal to spend 20  percent of the Tobacco Settlement money on tobacco education  programs. In summary, she noted that the state of Mississippi  spends more on tobacco prevention that the State of Alaska does.    JENNFIER APP, Advocacy Director, American Heart Association,  testified via teleconference from an offnet site, and shared  that the American Heart Association's mission is to reduce  disabilities, cardiovascular disease and stokes. She reiterated  that tobacco use is the number one preventable cause of death in  the State, and she stated that it is also the number one  preventable cause of cardiovascular disease in the State. She  stated that the Association is in "very strong support" of an  increase in the tobacco tax because, she attested, as the price  increases, more adults attempt to quit.      SFC 04 # 69, Side B 09:51 AM      Ms. App continued that most smokers begin smoking between the  ages of ten and twenty, and she noted that the average smoker in  Alaska began at the age of 14.5 years. She attested that "this  is also the age group that is most sensitive to price  increases." Therefore, she stated that this price increase would  result, over the long-term, in a decline in smokers in the  State. Furthermore, she attested that the tax would also assist  in reducing the approximate $130 million a year the State spends  on direct costs associated with smoking, including approximately  $60 million the State pays in support of the Medicaid program.  She affirmed that Alaskan businesses are losing approximately  $130 million annually in lost productivity related to smoking.  She calculated that to cover these expenses, the tax should be  $6.38 per pack; therefore, she concluded that even with the  implementation of a two-dollar per pack tax, the State would  continue "to be subsidizing these costs." However, she stressed  that the proposed tax would be an improvement over the current  situation and would result "in a win/win situation" as it would  assist in saving lives by deterring youth from smoking and the  State would also save money through the reduction of smoking  related expenses.    RUTHAMAE KARR, Chair, Alaska Tobacco Control Alliance (ATCA),  testified via teleconference from Fairbanks and shared that  while more funding would be appreciated, the ATCA has  experienced success in the State in its efforts, via a good  media campaign, to publicize the negative affects of smoking  such as second hand smoke. She affirmed that Alaska is ranked  "very high" in its number of tobacco users, and she voiced  additional concern that even with the educational efforts,  smokeless tobacco rates are increasing because people believe  smokeless alternatives are safer than cigarettes. She agreed  that an increase in the Other Tobacco Products prices would also  result in a decrease in young smoker use and would assist  people's efforts to quit smoking. She also stated that this  would result in a win/win situation, as it would assist the  State in reducing smoking related health expenses and increase  revenues for the State. She expressed support for the  legislation.    PAT LUBY, AARP Alaska, testified via teleconference from  Anchorage and stated that this legislation is favored by AARP.  He shared that research supports the position that a higher tax  would assist in curbing youth from smoking and would encourage  existing smokers to stop. He shared that grandparents love,  support, and enjoy their grandchildren and are saddened to see  them smoke. Therefore, he stressed that any program that would  assist in preventing kids from smoking would be supported by  AARP. He voiced concern regarding the information in the  Governor's transmittal letter that denotes that Alaska Natives,  and particularly Alaska Native youth, are smoking in numbers  higher than the State's norm, and he urged that some of the  anticipated revenue from this tax be used to address this issue.  He shared that a recent Medicare Trustees annual report stated  that the State's health care costs rose "significantly beyond  expectations," primarily as a result of smoking related  illnesses. Therefore, he surmised, that were fewer kids to  smoke, the long-term affect on lowering Medicare and Medicaid  expenses "would be significant." He stated that this legislation  is both "good economic policy and good health policy, it makes  sense and it's fair." On behalf of AARP, he urged passage of the  bill.    Co-Chair Wilken noted that the April 4, 2004 letter [copy on  file] from AARP is included in Members' packets.    MICHELLE TOOHEY, Director of Public Advocacy, American Lung  Association of Alaska, testified via teleconference from  Anchorage and addressed Ms. Bales' comments regarding the  Tobacco Master Settlement Agreement (MSA) by stating that "it is  true" that the agreement does not require that money be  allocated toward tobacco prevention "because Attorneys General  have no power of appropriation; however, there was absolutely an  intent in the settlement for these dollars to go to programs to  prevent kids from smoking and to help adults quit." Furthermore,  she attested that "this commitment was stated publicly when  Alaska settled, in fact, Alaska's Attorney General was  successful in negotiating an extra $200 million for our State in  consideration of the vastness of Alaska and the logistic  complications associated with administering tobacco prevention  programs in Rural Alaska. Further, in 2001, the Legislature  created the Tobacco Use Education and Cessation Fund to set  aside the remaining non-securitized 20-percent of the MSA funds  to provide a source to finance comprehensive smoking education,  tobacco use prevention, and tobacco control programs."  Therefore, she concluded that while the agreement does not  specify a requirement to fund prevention programs, "public  commitment has been made from the beginning to use these funds  in this manner."    Senator Hoffman commented that while there might have been  "public commitment to spend those dollars," the Commissioner of  the Department of Health and Social Services has communicated  that, "there are no additional dollars in the budget for that  effort." Continuing, he calculated that 20-percent of $40  million would amount to $8 million in additional funding that  should be specified for cessation efforts.    EMILY NENON, Alaska Advocacy Manager, American Cancer Society,  testified via teleconference from Anchorage that the American  Cancer Society (ACS) "recognizes tobacco taxes as one of the  most effective ways to reduce youth smoking and save lives." She  stressed that both State and national studies support this  claim. She stated that the mission of ACS "is to eliminate  cancer as the major health problem by preventing cancers, saving  lives, and diminishing suffering from cancer." She noted that  cancer is the second leading cause of death for Alaskans and the  leading cause of death for Alaska Natives, and she attested that  one-third of all cancers are tobacco related. She affirmed that  the majority of tobacco users become addicted as children.  Therefore, she supported testimony that increased taxes would  discourage youth from smoking. She stressed that this bill is  unique in that, in addition to having a tremendous health  impact, it has large public support throughout the State. She  urged the Committee to support this bill.    PATRICIA SENNER, Family Nurse Practitioner, testified via  teleconference from Anchorage in support of increasing the  tobacco tax in order to discourage youth from smoking. She  agreed with Senator Hoffman's comments that money be specified  for an anti-smoking advertising campaign as she attested that a  "two-pronged approach" must be taken to address the issue.  Furthermore, she informed that Committee that one of the most  common requests she experiences when working with homeless youth  is the request for assistance in stopping smoking. She noted  that Medicaid does not provide funding to assist people with  such cessation aides as nicotine patches. Therefore, she voiced  that access to such things would be helpful in this endeavor.  She also encouraged the Committee to address the illegal  bootlegging and importation of tobacco products.    JOELLE HALL, Parent, testified via teleconference from Anchorage  in support of the tax. She stressed that no one has more need  for this bill than "our children." She charged that parents'  role is to teach their children the dangers of smoking and that  the Legislature's role is to promote legislation such as this  tobacco tax increase in order to assist efforts to halting youth  from smoking. She voiced that while she is glad to have smokers  contribute via paying a tax toward the expenses incurred from  tobacco related expenses, her primary reason for support was to  discourage use. She urged the Committee to report the bill from  Committee.    KATTARYNA STILES, Representative, Alaska Native Health Board,  testified via teleconference from Anchorage in support of the  bill, as she attested, it "would save lives by reducing and  preventing tobacco use." Echoing Senator Hoffman's concerns, she  stated that the high percent of Native youth who smoke is  unacceptable. She stated that raising the price of tobacco  products would assist in the endeavor of discouraging youth to  smoke. She noted Commissioner Gilbertson's comments that the tax  would also alter smoking behaviors of adults. She stressed that  efforts to discourage pregnant women from smoking would be  important, as she noted that in western Alaska, there is an  "unacceptable" smoking rate of up to 67-percent among pregnant  women. She stated that by using Tobacco Master Settlement  Agreement Funds, grants, and other funds, a multitude of  agencies are working together to educate Native Alaskans to the  dangers of smoking. She stated that adoption of this legislation  would only increase the success of the efforts that are  currently in place to prevent use of tobacco in Native Youth.    Senator Hoffman asked whether the Alaska Native Health Board  could utilize additional dollars to assist in prevention  efforts.    Ms. Stiles replied in the affirmative; however, she clarified  that the purpose of her testimony today is to support this bill,  "not for the money, its because the goal of the tobacco tax  itself is to prevent use."    Senator Bunde questioned whether any polls have been conducted  to gauge public support for this tobacco tax; and if so, he  asked whether a one-dollar or a $1.50 tax increase was  preferred.    Ms. Nenon responded that the American Cancer Society conducted a  poll with the result being equal support for either a $1.00 or  $1.50 increase.    Senator Bunde asked the level of support favoring an increase.    Ms. Nenon relied that 67-percent of those polled supported a tax  increase.    Senator Bunde reiterated that an amendment should be considered  to incorporate all tobacco products into the bill.    Co-Chair Wilken suggested that Senator Bunde develop an  amendment and present it at the bill's next Committee hearing.    There being no further testimony, Co-Chair Wilken ordered the  bill HELD in Committee.    AT EASE 10:14 AM / 10:16 AM