Number 377 HB 37-CIGARETTES:SALES/ EDUC & CESSAT'N PROGRAM SENATOR ELLIS moved to adopt a proposed SCS CSHB 37(JUD), labeled version Y. There being no objection, the motion carried. REPRESENTATIVE ROKEBERG, sponsor of HB 37, said that on page 2, line 20, after the word "is" the word "not" was deleted, and "any health warning, including" was added to the sentence. The new wording is: (B) any health warning, including a health warning that is specified in 15 U.S.C. 133 (Federal Cigarette Labeling and Advertising Act). On page 3, line 20, "required to be" was added. The new wording is: (g) A person who is required to hold a business license endorsement under this section, or who is required to be licensed or agrees to be licensed under AS 43.50.010, or an agent or employee of the person, may not...." Page 5 contains the outline of what a tobacco control and cessation program should do and more emphasis on youth was added. REPRESENTATIVE ROKEBERG noted that, in large part, the bill includes a provision prohibiting grey market sales, the sale of export cigarettes for manufacture for export. HB 37 also has a provision prohibiting the sale of loose cigarettes, and a provision that applies to the duty-free shop at the Anchorage airport. HB 37 does have a fiscal note that will be addressed by the Senate Finance Committee. That fiscal note reflects the need for HB 37 to be in compliance with the Master Smoking Agreement. Over the years Alaska should receive around $680 million from that settlement so the fiscal note represents a mere token of that amount. The Center for Disease Control recommends that the State of Alaska spend as much as $8 million to add a comprehensive smoking control program. REPRESENTATIVE ROKEBERG said the primary thrust of HB 37 is the provision on page 5 that dictates the state shall administer the program by grant or contract. He emphasized that he sees no need to create a bureaucracy to do that as DHSS will only be passing money to other agencies. The wording for that provision reads: (15) a comprehensive smoking education, tobacco use prevention, and tobacco control program; to the maximum extent possible, the department shall administer the program required under this paragraph by grant or contract with more than one organization in the state; the department's program must include. Representative Rokeberg explained that his intention is to send a policy statement from the legislature saying there is no need for the bureaucracy to administer these programs, there are existing organizations in the state that have that capability. Number 634 CHAIRMAN TAYLOR asked for the meaning of the phrase "an enforcement component." He wondered if this will enable a review of the grants and programs. REPRESENTATIVE ROKEBERG said an evaluation component is essential to make sure the program is working. The enforcement provision contains broad language intended for follow-up. CHAIRMAN TAYLOR asked what the penalties are for grey market sales. REPRESENTATIVE ROKEBERG said there is no penalty, the department confiscates and destroys the cigarettes. A provision on page 4, line 8, (h) A violation of (g) of this section is an unfair or deceptive act or practice under AS 45.50.471, makes grey market sales a violation. CHAIRMAN TAYLOR said that his only concern with HB 37 is that the crime is not even a class B misdemeanor. He noted that he would like to hold the bill in committee just long enough to get an amendment for the purpose of stiffening the penalty provision. Number 835 SENATOR HALFORD said that on page 2 the bill reads, "the commissioner shall treat as confidential certain information," and he wondered what the information is and why it has to be confidential. REPRESENTATIVE ROKEBERG replied it is marketing information. SENATOR HALFORD noted that on page 3, line 7, the language says "for personal use free of federal tax or duty," and it looks like this only applies to importation for sale. He asked if there is a penalty in existing law for importation of large quantities not for sale. Number 925 REPRESENTATIVE ROKEBERG said he can only answer in part, cigarettes cannot be brought in from a foreign country. SENATOR HALFORD said his real concern is with importation from a state that has a lower tax rate than Alaska. REPRESENTATIVE ROKEBERG said he believes that is prohibited but he is not certain. SENATOR HALFORD asked if HB 37 creates an exemption that does not exist or if a penalty that exists is being reduced. REPRESENTATIVE ROKEBERG said he would get back to the committee with that information. Number 992 CHAIRMAN TAYLOR asked if there was an objection to the adoption of Version Y. There being no objection, Version Y was adopted. MR. ELMER LINDSTROM, Special Assistant for the Department of Health and Social Services (DHSS), said he has been working with Section 3 of HB 37 and recommends two minor changes. First, DHSS suggests deleting the word "tobacco" on page 5, line 7, and inserting the word "nicotine" prior to the word "gum." The new wording will read: (A) a community-based tobacco use prevention and cessation component addressing the needs of youth and adults that includes use of cessation aids such as a nicotine patch or a nicotine gum tobacco substitute;". REPRESENTATIVE ROKEBERG agreed with the amendment. SENATOR DONLEY moved to adopt amendment 1. There being no objection, amendment 1 was adopted. MR. LINDSTROM said the other change DHSS suggests is on page 5, line 12; delete the word "smokers" and insert "tobacco users." The new language will read: (C) anti-tobacco counter-marketing targeting both youth and adult populations designed to communicate messages to help prevent youth initiation of tobacco use, promote cessation among current tobacco users, and educate the public about the lethal effects of exposure to secondhand smoke;. REPRESENTATIVE ROKEBERG agreed with the amendment. SENATOR DONLEY moved to adopt amendment 2. There being no objection, amendment 2 was adopted. Number 1138 MS. CHRISTIE MCINTIRE, Executive Director of the American Lung Association of Alaska (ALA), said she supports CSHB 37. The ALA supports the prohibition of the sale of single cigarettes or "LUCYS", as they are commonly known. LUCYS are easier and cheaper to purchase; requiring cigarettes to be purchased in packs of 20 will limit the number of cigarettes that end up in the hands of children. Laws which limit the supply of tobacco is one strategy for reducing addiction. ALA supports DHSS administering a comprehensive tobacco prevention, cessation, and control program in Alaska. As a leading cause of preventable death in Alaska, tobacco addiction needs to be specifically identified and recognized as the tragic epidemic that it is. Other states have made significant improvements in reducing tobacco use. These improvements are only effective if three conditions are met. They must be comprehensive, sustained over time, and well funded. The cost to Alaska will be about $8 million dollars annually. MS. MCINTIRE noted that during the last legislative session, $1.4 million was allocated to a startup effort aimed at reducing tobacco addiction. There are now several components in place for that program: counter-marketing advertising, media campaigns, theater slides, and bus panels. The theme of this advertising campaign is cessation and environmental tobacco smoke, and currently a program is being developed around youth prevention. There are also four other pilot projects for cessation. ALA is also working with the Alaska Tobacco Control Alliance (ATCA) to develop goals and objectives for future programs, as well as evaluation measures. ALA has received 22 proposals totaling over $1.1 million for cessation needs alone. The current level of funding is inadequate for the job at hand. Number 1367 CHAIRMAN TAYLOR asked Ms. McIntire if she is employed by the Lung Association as part of the $1.1 million grant. MS. MCINTIRE replied that she is the executive director of ALA and the $1.4 million grant is to her organization. CHAIRMAN TAYLOR asked if any other organization has applied for this grant. MS. MCINTIRE replied that last year it was a designated grant to the ALA and they are serving on behalf of the Alaska Tobacco Control Alliance. Many health partners throughout Alaska are working on the goals and objectives that ALA is pursuing in this grant. Last June the ALA met and defined the goals and objectives for this money. Number 1447 MS. DELISA CULPEPPER, Chair of the Alaska Tobacco Control Alliance (ATCA), explained that ATCA is a statewide alliance of non-profit and governmental agencies that work toward reducing tobacco-related disease in Alaska. ATCA is not a non-profit group and, therefore, when the settlement money came through they were not able to accept it. This is why ATCA organizations got together and chose ALA. It was thought that ALA was the best non-profit organization to implement the program. ATCA works with ALA in an advisory capacity on an ongoing basis and is developing a comprehensive tobacco plan for Alaska. That plan will delineate ideas of where ATCA thinks things will need to go in the future and how to measure progress. MS. CULPEPPER said that ATCA supports HB 37 and she urged committee members to move the bill on today.