Chairman Odell and Honorable Members of the Ways and Means Committee, I am Tricia Lucas, Policy Director at New Futures.  New Futures is a nonpartisan, nonprofit advocacy organization working to reduce underage alcohol problems and to increase access to alcohol and other drug treatment in New Hampshire.  I come before you today to share our comments about SB 181 – referred to colloquially as the “Liquor Commission Modernization Bill.”  This testimony relates to the bill as introduced and does not address any changes contained in the amendment presented to the Committee by the Liquor Commission (“Commission”) today. If necessary, New Futures will submit revised testimony in response to the Commission amendment.  At the outset of my testimony, I note that several timing issues, notably the late release of the bill text and the scheduling of the hearing the day after a holiday, have made it difficult for community members and organizations working on underage alcohol problems to address the Committee today.  We look forward to working with the Committee to identify ways that these community voices can be heard. 

At the outset of this testimony, it is important for the Committee to know that New Futures works closely and cooperatively with the Commission on issues related to underage alcohol problems:  We collaborate on policy and legislative issues; the Commission recently provided enormous assistance in the development and conduct of a training for a group of New Futures’ advocates on how to work effectively with the Commission; and Commission staff is responsive to our requests for information and data to assist us in our policy work.  From this work together, we know that the Commission takes very seriously its statutory obligation to balance its responsibilities to maximize profits from the state sale of alcohol and to protect public health and safety by maintaining proper controls on the sale and distribution of alcohol.  I provide this background on this positive working relationship at the outset of my testimony so that my comments about specific provisions of SB 181 as introduced are not interpreted by the Committee as criticisms of the Commission and its leadership.

I will separate my comments on SB 181 as introduced into four (4) categories:  Advertising; Regulatory Authority; Expansion of Agency Stores; and the Impact of SB 181 on funding for the Alcohol Abuse Prevention and Treatment Fund. 

1. Advertising

• Section 21 of SB 181 makes several changes to current law governing the advertising of liquor and beverages:
  • SB 181 expressly permits on-premises and off-premises licensees to advertise their prices without suggesting any limitation on such advertising. 
  • SB 181 repeals all existing restrictions on the advertising of “Happy Hours” (those times when an on-premises licensee sells beverages and liquor at reduced prices). 
• New Futures strongly opposes both of these proposed changes because they will increase the exposure of underage youth to alcohol advertising and increase the risk of underage alcohol problems.
  • Recent research demonstrates that exposures to alcohol advertising affects the age at which underage youth begin to drink.
  • Numerous long – term studies have found that youth who see, hear, and read more alcohol ads are more likely to drink and drink more heavily than their peers. 
  • Underage drinking has profound consequences for youth, including interference with normal brain development, increased likelihood of developing alcohol dependency, injuries from motor vehicle or other accidents, risky sexual behavior, and violence.
  • In New Hampshire, where numerous community groups work every day to  prevent and reduce both underage drinking and over consumption by legal drinkers, why would we want to enact provisions that convey a message so obviously contrary to the goal of legal, responsible alcohol use.   

• We note that last session the Senate considered and killed HB 1197, which proposed the elimination of all restrictions on Happy Hour advertising.  The bill was opposed by Dover Youth to Youth, the Liquor Commission, law enforcement, DHHS, representatives of the university community, New Futures and the New Hampshire Public Health Association.  The vote of the Commerce Committee to kill the bill was 6 – 0. 

 2. Regulatory Authority

• Section 12 of SB 181 creates a new section RSA 178: 17-a related to “conditional” or “combination” licenses which appears to grant very broad and unrestricted authority to the Commission:
  • “The commission at its discretion may combine any license types or issue with conditions a combination conditional license.”
  • “The commission may suspend or modify any licensing requirement established under title XIII.”

1. While New Futures looks forward to the Commission’s explanation of its need for and any proposed limitations on the broad authority quoted above, we are compelled to point out that authority to “suspend or modify any licensing requirement established under title XII” would effectively permit the commission to disregard any licensing standards in statute or administrative rule. 

 3. Expansion of Agency Stores

• Sections 8 – 11 of SB 181 grant the Commission broad authority to close exiting state stores and license new agency stores.  In his budget address, the Governor indicated that the Commission would likely close as many as 16 state stores.  While we have not seen the Commission’s strategic plan for the modernization of its distribution system through the closure of exiting state stores, the opening of new state stores and the licensing of additional agency stores, we wish to raise a number of concerns for the Committee’s consideration. 
• New Futures’ concerns about expansion of agency stores. 
  • SB 181 does not include criteria to guide the Commission in the determination of the number and location of any new agency stores. 
  • It is critical that local communities be involved in Commission decisions about expansion of the alcohol distribution system. 
  • Because we are aware that the NH Grocers Association has proposed expanding the distribution of spirits to all grocery and convenience stores, New Futures wishes to make very clear its strong opposition to any significant expansion of the distribution of spirits. 
    • Research shows that youth are increasingly exposed to advertisement for spirits.
    • Because of their alcohol content, spirits are high risk products for youth and are increasingly a product of choice.
    • To increase the distribution of these products without the controls provided in state stores is irresponsible. 

4. Impact of SB 181 on funding for the Alcohol Abuse Prevention and Treatment Fund (the “Alcohol Fund”). 

•  
  • The Alcohol Fund (RSA 176:16,II) was created in 2000 as a nonlapsing fund to support alcohol education and abuse prevention and treatment programs and requires that a portion of the gross profits from the sale of alcohol and other revenues be annually deposited into the fund.  The creation of the Alcohol Fund reflects the strongly held belief that if the State is going to sell and directly profit from the sale of alcohol, it has a responsibility to dedicate a portion of the profits from sale to address the well-documented harm that results from substance abuse and addiction. 
  • We are concerned that any changes in the way Liquor Commission operations are funded and accounted for as the result of SB 181 not adversely affect the ongoing funding of the Alcohol Fund.
  • Given that the Governor’s budget cut funding for the Alcohol Fund by 30% in SFY 2010/2011 while at the same time calling for increased revenues from the sale of alcohol, we call on the Committee to:
    • Pass SB 146 (relative to liquor profits deposited into the alcohol abuse prevention and treatment fund) which is now before the Committee and/or
    • Include the text of SB 146 in SB 181 so that the process of Liquor Commission modernization may include improvements and funding to address alcohol abuse prevention and treatment.

Thank you for the opportunity to present this testimony.