SB 221-ALCOHOLIC BEV. TAX/PREVENTION FUND    1:35:01 PM CHAIR DAVIS announced that the first bill before the committee would be SB 221. JAY LIVEY, staff to Senator Lyman Hoffman, introduced SB 221 on behalf of the Senate Finance Committee, sponsor of SB 221. He began by saying that SB 221 is a relatively simple bill. It states that the legislature should allocate 100 percent of existing alcohol tax revenues to fund substance abuse treatment prevention programs. This allocation is intended to supplement and not supplant existing money that has been appropriated for treatment programs. He explained that the bill proposes a significant change in thinking about funding alcohol and drug abuse programs. It does not create a dedicated fund, as money still has to be appropriated before it can be spent. But it does send the signal that as a state we do understand the great need for more alcohol and drug abuse treatment. MR. LIVEY reported that during the current fiscal year, the revenue to the fund was approximately $19.8 million. This accounts for half of the alcohol taxes collected. Expenditures from the fund during this fiscal year total approximately $19.6 million. He related that the bulk of this expenditure is for behavioral health grants - this category of funding accounts for almost 80 per cent of the expenditures - with the bulk of the rest going to rural services and suicide prevention, and small portions to administration and Medicaid. He referred to a list of grantees in members' packets. MR. LIVEY pointed out that if this bill were to pass, an additional $20.4 million would be available for appropriation. He opined that everyone could suggest areas in which to spend the money - domestic violence programs, child abuse treatment and prevention, corrections, fetal alcohol syndrome, and others. He said many would agree that there is a need in all of these areas for expanded or new programs. He believed that between the advocates, the experts in the department, and the legislature, a rational plan for determining the most cost-effective use of this money can be crafted. 1:38:41 PM SENATOR MEYER said he looked at the list of items under behavioral health and saw the inclusion of the FASD Program. MR. LIVEY agreed it was there. He said he thought a little over $2 million went to that program. SENATOR MEYER wanted to be sure that education was included along with prevention and intervention of FASD. He summarized that a separate prevention fund would be set up from which amounts could be appropriated. MR. LIVEY said that was correct. He explained that the fund already exists. Currently, half of all alcohol tax revenues go into that fund and 50 percent of the fund is available to be appropriated by the legislature. CHAIR DAVIS opened public testimony. 1:41:28 PM KATE BURKHART, Executive Director, Advisory Board on Alcoholism and Drug Abuse, Division of Behavior Health, Department of Health and Social Services, testified in support of SB 221. She referred to a letter of support from the Board in members' packets that included strong support that all of the money from the alcohol excise tax be allocated to substance abuse prevention and treatment services. She said the legislative intent behind the increase in the alcohol tax is to supplement, not supplant general funds. She addressed ways the funding could be used. She shared statistics about youth drinking. This legislation would make additional resources available for prevention, as well as for treatment services. The Alaska Judicial Council released a report on the impact of the Therapeutic Justice program, which showed a lower rate of recidivism after participation in the process. She concluded that an investment in treatment will reap savings. 1:45:04 PM DALE FOX, President, Alaska CHARR, testified in support of SB 221. He urged the committee to provide more funds for detox and rehab services. One challenge is having programs available when people are ready to receive help. Frequently, citizens look for help and are unable to find the services they need. He said the alcohol industry supports SB 221. He made three recommendations: the state should study available programs to determine which ones are producing results, fund more beds, doctors, and nurses at detox facilities, and assist more people get help from rehab services. 1:48:21 PM CHRISTY LAWTON, Director, Office of Children's Services (OCS), Department of Health and Social Services, spoke of her role in working with alcohol abuse issues. She reported that most of the cases reported to OCS are related to substance abuse and due to neglect, sexual abuse, physical abuse, and mental injury. Neglect is the prevailing issue. Western Alaska has the highest number of substance abuse cases. OCS connects families to state resources statewide. She noted that sometimes alcohol abuse is the prevailing issue that brings families to OCS's attention, and other times another issue unveils a substance abuse problem in the family. She did not have data that provided the number of cases that are as a direct result of substance abuse; however, she said her personal experience shows that substance abuse is a daily challenge. JEFF JESSEE, Chief Executive Officer, Alaska Mental Health Trust Authority, testified in support of SB 221. He termed it an important first step in trying to get a handle on some of the alcohol problems in the state. He reported that several years ago the Trust funded a study on what the cost of alcohol was to the state and to the state budget. Overall, alcohol abuse and problems related to alcohol abuse cost the state over $700 million. Alcohol abuse costs the state budget hundreds of millions of dollars in terms of abuses and crimes and lost productivity. MR. JESSEE stressed that AMHTA is in total agreement with CHARR on this issue. He suggested that the next steps are to get a good evaluation of current programs and share which ones are successful with the public. The second goal is to determine where the unmet needs are. Next, the legislature and the executive branch should set some goals. For example, one might be to provide treatment for domestic violence and sexual assault victims. Other examples might be treatment for parents who are involved with OCS or treatment for those who are incarcerated and support services upon release from prison. He emphasized how important it is to provide treatment immediately for those who need it. He suggested setting goals in these areas and working with multiple agencies to develop policies in order to improve the quality of life and to reduce the costs of alcoholism in Alaska. 1:55:43 PM KAREN EAKES, Chair, Ketchikan Wellness Coalition, testified in support of SB 221. She shared the results of a community survey which showed that substance abuse had the highest needs in Ketchikan. She said that 37 percent of the respondents viewed substance abuse as one of the three biggest health issues in Ketchikan. She stated the benefits of funding prevention programs. MARILEE FLETCHER, Behavioral Health Specialist, Division of Behavioral Health, Department of Health and Social Services (DHSS), answered questions related to SB 221. 1:58:31 PM SENATOR DYSON asked what was behind the policy decision to not put all the proceeds from the alcohol tax into alcohol treatment. MS. FLETCHER said she understood that they were used for alcohol treatment. SENATOR DYSON pointed out that only 50 percent of the receipts go towards treatment. JOANNA BALES, Deputy Director, Tax Division, Department of Revenue (DOR), addressed Senator Dyson's question. She recalled that 50 percent of the alcohol tax revenue went into the fund when it was first created in 2002. At that time the alcohol tax was bringing in between $12 million and $13 million each year. She said she understood that when alcohol tax revenues increased to about $30 million a year, 50 percent of the tax exceeded what was currently going into the fund - about $19 million. It was a policy call to continue to contribute 50 percent to the prevention fund. SENATOR DYSON understood that it was an executive branch decision, not a legislative decision. MS. BALES clarified that the legislation was sponsored by then- Representative Lisa Murkowski. SENATOR DYSON stated that he supports expanding the amount of money that goes into treatment. He asked if there was any discussion of deducting administrative costs from alcohol tax receipts. MS. BALES replied that she was not aware of that discussion. She explained that most DOR programs are not receipt driven, but are funded by general funds. 2:01:21 PM SENATOR DYSON asked if DHSS uses a percentage of the receipts to cover the administration of the fund. MS. FLETCHER said she believed a small percentage does go toward administering the fund. CHAIR DAVIS noted that Senate Finance will hear SB 221 next. She reported numerous letters of support for the bill and said she has received no opposition to the bill. 2:02:23 PM SENATOR EGAN moved to report SB 221 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, SB 221 was reported out of the Senate Health and Social Services Standing committee.