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HCS CSSB 84(FIN): "An Act relating to the improper sale of tobacco products and to the testing and packaging of cigarettes to be sold, offered for sale, or possessed in this state; relating to civil penalties for the improper sale of tobacco products and to suspension of business license endorsements and the right to obtain business license endorsements where the suspension is based on the improper sale of tobacco products; relating to citations for certain offenses related to tobacco; and providing for an effective date."

00                 HOUSE CS FOR CS FOR SENATE BILL NO. 84(FIN)                                                             
01 "An Act relating to the improper sale of tobacco products and to the testing and                                        
02 packaging of cigarettes to be sold, offered for sale, or possessed in this state; relating to                           
03 civil penalties for the improper sale of tobacco products and to suspension of business                                 
04 license endorsements and the right to obtain business license endorsements where the                                    
05 suspension is based on the improper sale of tobacco products; relating to citations for                                 
06 certain offenses related to tobacco; and providing for an effective date."                                              
07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
08    * Section 1. AS 11.76.100(a) is amended to read:                                                                   
09            (a)  A person commits the offense of selling or giving tobacco to a minor if the                             
10       person                                                                                                            
11                 (1)  negligently sells a cigarette, a cigar, tobacco, or a product                                      
12       containing tobacco to a person under 19 years of age;                                                             
13                 (2)  is 19 years of age or older and negligently exchanges or gives a                                   
01       cigarette, a cigar, tobacco, or a product containing tobacco to a person under 19 years                           
02       of age; [OR]                                                                                                      
03                 (3)  maintains a vending machine that dispenses cigarettes, cigars,                                     
04       tobacco, or products containing tobacco; or                                                                   
05                 (4)  holds a business license endorsement under AS 43.70.075 and                                    
06       allows a person under 19 years of age to sell a cigarette, cigar, tobacco, or a                               
07       product containing tobacco.                                                                                   
08    * Sec. 2. AS 18 is amended by adding a new chapter to read:                                                      
09                      Chapter 74. Cigarette Fire Safety.                                                               
10            Sec. 18.74.010. Requirement for sale. Except as provided by AS 18.74.060, a                              
11       person may not sell or offer to sell cigarettes in this state, or sell or offer to sell                           
12       cigarettes to another person located in this state, unless                                                        
13                 (1)  the cigarettes are tested under                                                                    
14                      (A)  AS 18.74.030 and satisfy the performance standard in                                          
15            AS 18.74.030(d); or                                                                                          
16                      (B)  AS 18.74.040 and satisfy an alternative performance                                           
17            standard under AS 18.74.040;                                                                                 
18                 (2)  the cigarettes have been marked as required by AS 18.74.130; and                                   
19                 (3)  a certification has been submitted by the manufacturer of the                                      
20       cigarettes under AS 18.74.080.                                                                                    
21            Sec. 18.74.030. Testing of cigarettes. (a) Cigarettes shall be tested under                                
22                 (1)  the ASTM International Standard E2187-04, entitled "Standard                                       
23       Test Method for Measuring the Ignition Strength of Cigarettes"; or                                                
24                 (2)  a test method established under (b) of this section.                                               
25            (b)  The state fire marshal may adopt an ASTM International standard test                                    
26       method that is adopted by the American Society of Testing and Materials after the                                 
27       standard test method identified under (a) of this section if the state fire marshal finds                         
28       that the method does not result in a change in the percentage of full-length burns                                
29       exhibited by any tested cigarette when compared to the percentage of full-length burns                            
30       that the same cigarette would exhibit when tested under                                                           
31                 (1)  the standard test method identified under (a)(1) of this section; and                              
01                 (2)  the criteria established under (c) and (d) of this section.                                        
02            (c)  The testing under this section shall be conducted on 10 layers of filter                                
03       paper. A complete test trial consists of 40 replicate tests of each cigarette. The                                
04       performance standard required by (d) of this section may only be applied to a                                     
05       complete test trial.                                                                                              
06            (d)  When tested under this section, not more than 25 percent of the cigarettes                              
07       tested in a test trial may exhibit full-length burns.                                                             
08            Sec. 18.74.040. Alternative test methods. (a) If the state fire marshal                                  
09       determines that cigarettes cannot be tested by a test method established in                                     
10       AS 18.74.030(a), a manufacturer of the cigarettes shall propose an alternative test                               
11       method and performance standard for the cigarettes to the state fire marshal. On                                  
12       approval of the proposed test method and a determination by the state fire marshal that                           
13       the performance standard proposed by the manufacturer is equivalent to the                                        
14       performance standard prescribed by AS 18.74.030(d), the manufacturer may employ                                   
15       the proposed alternative test method and performance standard to certify the cigarette                            
16       under AS 18.74.080.                                                                                               
17            (b)  Unless the state fire marshal demonstrates a reasonable basis why the                                   
18       alternative test method should not be accepted under this chapter, the state fire marshal                         
19       shall authorize a manufacturer to use an alternative test method and performance                                  
20       standard to certify cigarettes for sale in this state if the state fire marshal                                   
21                 (1)  determines that another state has enacted reduced cigarette ignition                               
22       propensity standards that include a test method and performance standard that are the                             
23       same as those contained in this chapter; and                                                                      
24                 (2)  finds that the officials responsible for implementing those                                        
25       requirements have approved a proposed alternative test method and performance                                     
26       standard for particular cigarettes proposed by a manufacturer as meeting the fire safety                          
27       standards of that state's law under a legal provision comparable to this section.                                 
28            (c)  All other applicable requirements of this chapter apply to the manufacturer                             
29       of the cigarettes tested under this section.                                                                    
30            Sec. 18.74.050. Testing laboratories. (a) Testing of cigarettes under this                                 
31       chapter shall be performed by a laboratory that has been accredited under standard                                
01       ISO/IEC 17025 of the International Organization for Standardization or by another                                 
02       comparable accreditation standard required by the state fire marshal.                                           
03            (b)  A laboratory that conducts cigarette testing under this chapter shall                                   
04       implement a quality control and quality assurance program that ensures the                                        
05       repeatability of the testing results. The repeatability value may not be greater than                             
06       0.19. In this subsection,                                                                                         
07                 (1)  "quality control and quality assurance program" means the                                          
08       laboratory procedures implemented to ensure that operator bias, systematic and                                    
09       nonsystematic methodological errors, and equipment-related problems do not affect                                 
10       the results of the testing quality control program;                                                               
11                 (2)  "repeatability" means the range of values within which the repeat                                  
12       results of cigarette test trials from a single laboratory will fall 95 percent of the time.                     
13            Sec. 18.74.060. Testing for another purpose. AS 18.74.030 and 18.74.040 do                                 
14       not require cigarettes to be tested if the cigarettes are tested for another purpose and                          
15       the testing is consistent with this chapter.                                                                      
16            Sec. 18.74.065. Testing by state fire marshal. The state fire marshal may                                  
17       perform testing of cigarettes to determine compliance with this chapter. If the state fire                      
18       marshal or a contractor of the state fire marshal performs testing to determine a                                 
19       cigarette's compliance with the performance standard in AS 18.74.030(d) or an                                     
20       alternative performance standard under AS 18.74.040, the testing shall be performed                               
21       under this chapter.                                                                                               
22            Sec. 18.74.070. Maintenance of records. A manufacturer shall keep for three                                
23       years copies of the reports of all tests conducted on all cigarettes offered for sale. The                        
24       manufacturer shall make copies of those reports available to the state fire marshal and                           
25       the attorney general on written request.                                                                          
26            Sec. 18.74.080. Certification requirement. (a) A manufacturer shall submit to                              
27       the state fire marshal a certification that each cigarette listed in the certification has                        
28       been tested under AS 18.74.030 and satisfies the performance standard in                                          
29       AS 18.74.030(d), or has been tested under AS 18.74.040 and satisfies an alternative                               
30       performance standard under AS 18.74.040.                                                                          
31            (b)  If a manufacturer has certified a cigarette under this section and                                      
01       subsequently makes a change to the cigarette that is likely to alter its compliance with                          
02       the performance standard under AS 18.74.030(d) or an alternative performance                                      
03       standard under AS 18.74.040, the cigarette may not be sold or offered for sale in this                            
04       state or sold to a person located in this state until the manufacturer retests the cigarette                      
05       under AS 18.74.030 or 18.74.040, the cigarette meets the performance standard under                               
06       AS 13.74.030(d) or the alternative performance standard under AS 18.74.040, and the                               
07       manufacturer maintains records of the retesting under AS 18.74.070.                                               
08            (c)  For each cigarette listed in a certification submitted under (a) of this                                
09       section, a manufacturer shall pay to the state fire marshal a fee of $250. The state fire                         
10       marshal may adjust this fee annually to ensure that it defrays the actual costs of the                            
11       processing, testing, enforcement, and oversight activities required by this chapter.                              
12            (d)  Each cigarette certified under this section shall be recertified every three                            
13       years.                                                                                                          
14            Sec. 18.74.090. Contents of certification. The certification required by                                   
15       AS 18.74.080 must provide the following information for each cigarette listed in the                              
16       certification:                                                                                                    
17                 (1)  the brand or trade name on the package;                                                            
18                 (2)  the style, such as "light" or "ultra-light";                                                       
19                 (3)  the length in millimeters;                                                                         
20                 (4)  the circumference in millimeters;                                                                  
21                 (5)  the flavor, if applicable;                                                                         
22                 (6)  whether the cigarette is filtered or nonfiltered;                                                  
23                 (7)  a description of the package;                                                                      
24                 (8)  the marking approved under AS 18.74.120;                                                           
25                 (9)  the name, address, and telephone number of the laboratory that                                     
26       conducted the test, if different than the manufacturer who conducted the test; and                                
27                 (10)  the date that the testing occurred.                                                               
28            Sec. 18.74.100. Banding requirement. Each cigarette listed in a certification                              
29       submitted under AS 18.74.080 that uses lowered permeability bands in the cigarette                                
30       paper to achieve compliance with the performance standard in AS 18.74.030(d) must                                 
31       have at least two nominally identical bands on the paper surrounding the tobacco                                  
01       column. At least one complete band must be located at least 15 millimeters from the                               
02       lighting end of the cigarette. For cigarettes on which the bands are positioned by                                
03       design, there must be at least two bands fully located at least                                                   
04                 (1)  15 millimeters from the lighting end; and                                                          
05                 (2)  10 millimeters from                                                                                
06                      (A)  the filter end of the tobacco column; or                                                      
07                      (B)  the labeled end of the tobacco column of a nonfiltered                                        
08            cigarette.                                                                                                 
09            Sec. 18.74.110. Availability of certifications. The certification required by                              
10       AS 18.74.080 shall be made available to the attorney general for purposes consistent                              
11       with this chapter and to the department for the purpose of ensuring compliance with                               
12       AS 18.74.080.                                                                                                     
13            Sec. 18.74.120. Packaging marking approval. (a) Before submitting a                                        
14       certification of a cigarette under AS 18.74.080, a manufacturer shall present its                                 
15       proposed packaging marking to the state fire marshal for approval. The state fire                                 
16       marshal shall approve or disapprove the proposed packaging marking. Proposed                                      
17       packaging marking shall be considered approved if the state fire marshal fails to act                             
18       within 10 business days after receiving a request for approval.                                                   
19            (b)  Notwithstanding AS 18.74.130, the state fire marshal shall give a                                       
20       preference to proposed packaging marking for a cigarette that is in use and approved                              
21       for the cigarette under the fire safety standards for cigarettes established by the law of                        
22       the state of New York, unless the state fire marshal demonstrates a reasonable basis                              
23       why the proposed packaging marking should not be approved under this chapter.                                     
24            (c)  Notwithstanding AS 18.74.130, the state fire marshal shall approve the use                              
25       of the letters "FSC" for "fire standards compliant" on proposed packaging marking to                              
26       indicate that the cigarettes comply with the performance standard in AS 18.74.030(d)                              
27       or an alternative performance standard under AS 18.74.040.                                                        
28            (d)  A manufacturer may not change its approved packaging marking unless                                     
29       the state fire marshal has approved the modification under this section.                                          
30            (e)  A wholesale dealer, an agent, and a retail dealer shall permit the state fire                           
31       marshal, the department, the attorney general, and the employees of those persons to                              
01       inspect packaging markings of cigarettes.                                                                       
02            Sec. 18.74.130. Marking of cigarette packaging. (a) The packaging                                        
03       containing a brand and style of cigarette that a manufacturer certifies under                                     
04       AS 18.74.080 must be marked to indicate compliance with the requirements of this                                  
05       chapter. The packaging marking must be in eight-point type or larger and consist of                               
06                 (1)  a modification of the universal product code to include a visible                                  
07       mark printed at or around the area of the code; the mark may consist of alphanumeric                              
08       or symbolic characters and must be permanently stamped, engraved, embossed, or                                    
09       printed in conjunction with the universal product code;                                                           
10                 (2)  any visible combination of alphanumeric or symbolic characters                                     
11       permanently stamped, engraved, or embossed on the package or wrapping; or                                         
12                 (3)  printed, stamped, engraved, or embossed text on the cigarette                                      
13       package that indicates that the cigarettes satisfy the requirements of this chapter.                              
14            (b)  A manufacturer shall use only one packaging marking and apply that                                      
15       packaging marking uniformly to all packaging and to all brands marketed by the                                    
16       manufacturer for sale in this state.                                                                              
17            Sec. 18.74.150. Copies. A manufacturer who certifies a cigarette under                                     
18       AS 18.74.080 shall provide a copy of the certification to each wholesale dealer and                               
19       agent to whom the manufacturer sells the cigarette. The manufacturer shall also                                   
20       provide the wholesale dealer and agent with sufficient copies of an illustration of the                           
21       cigarette packaging markings used by the manufacturer under AS 18.74.130 for each                                 
22       retail dealer to whom the wholesale dealer or agent sells cigarettes. A wholesale dealer                          
23       or an agent shall provide a copy of the cigarette packaging markings received from a                              
24       manufacturer to each retail dealer to whom the wholesale dealer or agent sells                                    
25       cigarettes.                                                                                                     
26            Sec. 18.74.160. Penalties for violations. (a) A manufacturer, a wholesale                                  
27       dealer, an agent, or another person who knowingly sells or offers to sell cigarettes                              
28       other than through retail sale and in violation of AS 18.74.010 is subject to a civil                             
29       penalty not to exceed                                                                                             
30                 (1)  $10,000 for a first violation;                                                                     
31                 (2)  $25,000 for each violation that is not a first violation.                                        
01            (b)  A retail dealer who knowingly sells or offers to sell cigarettes in violation                           
02       of AS 18.74.010 is subject, for each sale or offer to sell, to a civil penalty not to                             
03       exceed                                                                                                            
04                 (1)  $500 for a first violation in which the total number of cigarettes                                 
05       sold or offered for sale does not exceed 1,000 cigarettes;                                                        
06                 (2)  $2,000 for each violation that is not a first violation and in which                               
07       the total number of cigarettes sold or offered for sale does not exceed 1,000 cigarettes;                         
08                 (3)  $1,000 for a first violation in which the total number of cigarettes                               
09       sold or offered for sale exceeds 1,000 cigarettes;                                                                
10                 (4)  $5,000 for a violation that is not a first violation and in which the                              
11       total number of cigarettes sold or offered for sale exceeds 1,000 cigarettes.                                     
12            (c)  The penalties against                                                                                   
13                 (1)  one manufacturer, wholesale dealer, agent, or other person under                                   
14       (a) of this section may not exceed $100,000 for violations occurring during a 30-day                              
15       period; or                                                                                                        
16                 (2)  one retail dealer under (b) of this section may not exceed $25,000                                 
17       for violations occurring during a 30-day period.                                                                  
18            (d)  In addition to any other penalty prescribed by law, a person engaged in the                             
19       manufacture of cigarettes who knowingly makes a false certification under                                         
20       AS 18.74.080 is subject to a civil penalty of at least $75,000 for a first violation and a                        
21       civil penalty not exceeding $250,000 for each violation that is not a first violation.                            
22            (e)  A manufacturer who fails to make copies of reports available under                                      
23       AS 18.74.070 within 60 days after receiving a written request from the state fire                                 
24       marshal or the attorney general is subject to a civil penalty not to exceed $10,000 for                           
25       each day after the 60th day that the manufacturer does not make the copies available.                             
26            (f)  If a person violates a provision of this chapter and a civil penalty is not set                         
27       for the violation, the person is subject to a civil penalty not to exceed $1,000 for a first                      
28       violation and a civil penalty not exceeding $5,000 for each violation that is not a first                         
29       violation.                                                                                                        
30            Sec. 18.74.180. Separate accounting. The fee received under AS 18.74.080(c)                                
31       and the civil penalties imposed under AS 18.74.160 shall be deposited into the general                            
01       fund and separately accounted for under AS 37.05.142. The legislature may                                         
02       appropriate the money accounted for under this section to the fire prevention and                                 
03       public safety fund established under AS 18.74.210.                                                                
04            Sec. 18.74.190. Seizure of cigarettes. (a) If a person is offering for sale or has                         
05       made a sale of cigarettes in violation of AS 18.74.010, the state fire marshal, the                               
06       department, or a law enforcement agency shall seize and, subject to (b) of this section,                          
07       dispose of the cigarettes.                                                                                        
08            (b)  Before disposal of cigarettes under (a) of this section, the state fire marshal                         
09       or the department shall                                                                                           
10                 (1)  provide the person from whom the cigarette was seized with notice                                  
11       of the seizure and an opportunity for a hearing regarding the seizure; and                                        
12                 (2)  permit the holder of the trademark rights in the cigarette brand to                                
13       inspect the cigarettes.                                                                                           
14            Sec. 18.74.200. Other remedies. In addition to any other remedy provided by                                
15       law, the state fire marshal or attorney general may file an action in superior court for a                        
16       violation of this chapter, including an action for injunctive relief or to recover costs or                       
17       damages suffered by the state because of a violation of this chapter, including                                   
18       enforcement costs relating to the specific violation. Each violation of this chapter or of                        
19       the regulations adopted under this chapter constitutes a separate cause of action for                             
20       which the state fire marshal or attorney general may obtain relief.                                               
21            Sec. 18.74.210. Fire prevention and public safety fund. (a) The fire                                       
22       prevention and public safety fund is established. The fund consists of appropriations                             
23       made to the fund.                                                                                                 
24            (b)  The purpose of the fund is to pay the expenses of the state fire marshal and                            
25       the department for implementing and enforcing this chapter.                                                       
26            (c)  Money appropriated to the fund may be spent for the purposes of the fund                                
27       without further appropriation. Money appropriated to the fund does not lapse.                                     
28            Sec. 18.74.220. Implementation. The substance of the fire safety standards for                             
29       cigarettes established by the law of the state of New York and the implementation of                              
30       these standards by the state of New York shall be persuasive authority in the                                     
31       implementation of this chapter by the state fire marshal and the attorney general.                                
01            Sec. 18.74.230 Review by state fire marshal. The state fire marshal shall                                  
02       review the effectiveness of this chapter, report the state fire marshal's findings to the                         
03       legislature every three years on or by January 30 of the reporting year, and, if                                  
04       appropriate, recommend legislation to improve the effectiveness of this chapter.                                  
05            Sec. 18.74.240. Regulations. The state fire marshal may adopt regulations to                               
06       implement this chapter.                                                                                           
07            Sec. 18.74.250. Inspections. (a) The department may inspect cigarettes held by                             
08       wholesale dealers, agents, and retail dealers to determine if the cigarettes are marked                           
09       as required by AS 18.74.120 and 18.74.130. If the cigarettes are not marked as                                    
10       required, the department shall notify the state fire marshal.                                                     
11            (b)  To determine compliance with this chapter, the state fire marshal and the                               
12       attorney general may examine the books, papers, invoices, and other records of a                                  
13       person who possesses, controls, or occupies premises where cigarettes are placed,                                 
14       stored, sold, or offered for sale, and the stock of cigarettes on the premises.                                   
15            (c)  A person who possesses, controls, or occupies premises where cigarettes                                 
16       are placed, sold, or offered for sale, shall allow the state fire marshal and the attorney                        
17       general to make the inspections authorized by this section.                                                       
18            Sec. 18.74.260. Sale outside the state. This chapter may not be interpreted to                             
19       prohibit a person from manufacturing or selling cigarettes that do not meet the                                   
20       requirements of this chapter if the cigarettes are or will be stamped for sale in another                         
21       state or are packaged for sale outside the United States and the person has taken                                 
22       reasonable steps to ensure that the cigarettes will not be sold or offered for sale to                            
23       persons located in this state.                                                                                    
24            Sec. 18.74.270. Regulation by municipality. Notwithstanding any other                                      
25       provision of law, a municipality may not enact or enforce an ordinance or another law                             
26       of the municipality that conflicts with this chapter.                                                           
27            Sec. 18.74.280. Relationship to federal law. This chapter does not apply if a                              
28       federal law is enacted that establishes a reduced cigarette ignition propensity standard                          
29       and preempts this chapter.                                                                                        
30            Sec. 18.74.290. Definitions. In this chapter,                                                              
31                 (1)  "agent" means a person authorized by the department to purchase                                    
01       and affix stamps on packages of cigarettes under AS 43.50.500 - 43.50.700;                                        
02                 (2)  "cigarette" means a roll for smoking of any size or shape, made                                    
03       wholly or in part of tobacco, whether or not the tobacco is flavored, adulterated, or                             
04       mixed with another ingredient, if the wrapper or cover of the roll is made of paper or a                          
05       material other than tobacco;                                                                                      
06                 (3)  "department" means the Department of Revenue;                                                      
07                 (4)  "manufacturer" means                                                                               
08                      (A)  a person who manufactures or otherwise produces                                               
09            cigarettes, or causes cigarettes to be manufactured or produced anywhere, if                                 
10            the manufacturer intends the cigarettes to be sold in this state, including                                  
11            cigarettes intended to be sold in the United States through an importer;                                     
12                      (B)  the first purchaser anywhere who intends to resell in the                                     
13            United States cigarettes that are manufactured anywhere and that the original                                
14            manufacturer or maker does not intend to be sold in the United States; or                                    
15                      (C)  a person who becomes a successor of a person described in                                     
16            (A) or (B) of this paragraph;                                                                                
17                 (5)  "retail dealer" means a person, other than a manufacturer or                                       
18       wholesale dealer, who sells cigarettes or tobacco products;                                                       
19                 (6)  "sale" or "sell" means a sale, exchange, barter, and any other                                     
20       manner of transferring the ownership of personal property;                                                        
21                 (7)  "wholesale dealer" means a person who                                                              
22                      (A)  sells cigarettes or tobacco products to retail dealers or other                               
23            persons for resale; and                                                                                      
24                      (B)  owns, operates, or maintains cigarette or tobacco vending                                     
25            machines in, at, or on premises owned or occupied by another person.                                         
26    * Sec. 3. AS 37.05.146(c) is amended by adding a new paragraph to read:                                            
27                 (82)  fees collected under AS 18.74.080.                                                                
28    * Sec. 4. AS 43.70.075(d) is amended to read:                                                                    
29            (d)  If a person who holds an endorsement issued under this section, or an                                   
30       agent or an employee of a person who holds an endorsement issued under this section                               
31       acting within the scope of the agency or employment, has been convicted of violating                              
01       AS 11.76.100, 11.76.106, or 11.76.107, the department shall impose a civil penalty                            
02       as set out in this subsection. However, following a hearing under (m) of this                                 
03       section, and based on evidence admitted at that hearing concerning questions                                  
04       specified in (m)(4) and (6) of this section, the department may reduce by not                                 
05       more than 10 days a suspension under (1) of this subsection, or by not more than                              
06       20 days a suspension under (2) of this subsection, or increase by not more than 10                            
07       days a suspension under (1) of this subsection, or by not more than 20 days a                                 
08       suspension under (2) of this subsection. If a hearing is not requested, or if a                               
09       hearing is requested and the department determines that the evidence admitted                                 
10       does not support increasing or decreasing the suspension, the department shall                                
11       suspend the endorsement for a period of                                                                           
12                 (1)  20 days and impose a civil penalty of $300 if the person has not                                   
13       been previously convicted of violating AS 11.76.100, 11.76.106, or 11.76.107 and is                               
14       not otherwise subject to the sanctions described in (2) - (4) of this subsection;                                 
15                 (2)  45 days and impose a civil penalty of $500 if, within the 24 months                                
16       before the date of the department's notice under (m) of this section, the person, or an                           
17       agent or employee of the person while acting within the scope of the agency or                                    
18       employment of the person, was convicted once of violating AS 11.76.100, 11.76.106,                                
19       or 11.76.107;                                                                                                     
20                 (3)  90 days and impose a civil penalty of $1,000 if, within the 24                                     
21       months before the date of the department's notice under (m) of this section, the person,                          
22       or an agent or employee of the person while acting within the scope of the agency or                              
23       employment of the person, was convicted twice of violating AS 11.76.100, 11.76.106,                               
24       or 11.76.107, or a provision of this section or a regulation implementing this section                            
25       adopted under AS 43.70.090; or                                                                                    
26                 (4)  one year and impose a civil penalty of $2,500 if, within the 24                                    
27       months before the date of the department's notice under (m) of this section, the person,                          
28       or an agent or employee of the person while acting within the scope of the agency or                              
29       employment of the person, was convicted more than twice of violating AS 11.76.100,                                
30       11.76.106, or 11.76.107.                                                                                          
31    * Sec. 5. AS 43.70.075(m) is amended to read:                                                                      
01            (m)  The department may initiate suspension of a business license endorsement                                
02       or the right to obtain a business license endorsement under this section by sending the                           
03       person subject to the suspension a notice by certified mail, return receipt requested, or                         
04       by delivering the notice to the person. The notice must contain information that                                  
05       informs the person of the grounds for suspension, the length of any suspension sought,                            
06       and the person's right to administrative review. A suspension begins 30 days after                                
07       receipt of notice described in this subsection unless the person delivers a timely                                
08       written request for a hearing to the department in the manner provided by regulations                             
09       of the department. If a hearing is requested under this subsection, an administrative                         
10       law judge [A HEARING OFFICER] of the office of administrative hearings                                        
11       (AS 44.64.010) shall determine the issues by using the preponderance of the evidence                              
12       test and shall, to the extent they do not conflict with regulations adopted under                                 
13       AS 44.64.060, conduct the hearing in the manner provided by regulations of the                                    
14       department. A hearing under this subsection is limited to the following questions:                                
15                 (1)  was the person holding the business license endorsement, or an                                     
16       agent or employee of the person while acting within the scope of the agency or                                    
17       employment of the person, convicted by plea or judicial finding of violating                                      
18       AS 11.76.100, 11.76.106, or 11.76.107;                                                                            
19                 (2)  if the department does not allege a conviction of AS 11.76.100,                                    
20       11.76.106, or 11.76.107, did the person, or an agent or employee of the person while                              
21       acting within the scope of the agency or employment of the person, violate a provision                            
22       of (a) or (g) of this section;                                                                                    
23                 (3)  within the 24 months before the date of the department's notice                                    
24       under this subsection, was the person, or an agent or employee of the person while                                
25       acting within the scope of the agency or employment of the person, convicted of                                   
26       violating AS 11.76.100, 11.76.106, or 11.76.107 or adjudicated for violating a                                    
27       provision of (a) or (g) of this section;                                                                      
28                 (4)  did the person holding the business license endorsement                                        
29       establish that the person holding the business license endorsement had adopted                                
30       and enforced an education, a compliance, and a disciplinary program for agents                                
31       and employees of the person as provided in (t) of this section;                                               
01                 (5)  did the person holding the business license endorsement                                        
02       overcome the rebuttable presumption established in (w) of this section;                                       
03                 (6)  within 5 years before the date of the violation that is the subject                            
04       of the hearing, did the department establish that the person holding the business                             
05       license endorsements                                                                                          
06                      (A)  previously violated (a) or (g) of this section;                                           
07                      (B)  previously violated AS 11.76.100, 11.76.106, or                                           
08            11.76.107 at a location or outlet in a location for which the person holds a                             
09            business license endorsement, or had an agent or employee previously                                     
10            violate AS 11.76.100, 11.76.106, or 11.76.107; this subparagraph does not                                
11            apply to a prior conviction that served to enhance a suspension period                                   
12            under (d)(2) - (4) of this section; or                                                                   
13                      (C)  engaged at a location owned by the person in other                                        
14            conduct that was or is likely to result in the sale of tobacco to a person                               
15            under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107.                             
16    * Sec. 6. AS 43.70.075 is amended by adding new subsections to read:                                               
17            (t)  Based on evidence provided at the hearing under (m)(4) - (6) of this                                    
18       section, the department may reduce the license suspension period under (d) of this                                
19       section if the person holding the business license endorsement establishes that, before                           
20       the date of the violation, the person had                                                                         
21                 (1)  adopted and enforced a written policy against selling cigarettes,                                  
22       cigars, tobacco, or products containing tobacco to a person under 19 years of age in                              
23       violation of AS 11.76.100, 11.76.106, or 11.76.107;                                                               
24                 (2)  informed the person's agents and employees of the applicable laws                                  
25       and their requirements and conducted training on complying with the laws and                                      
26       requirements;                                                                                                     
27                 (3)  required each agent and employee of the person to sign a form                                      
28       stating that the agent and employee has been informed of and understands the written                              
29       policy and the requirements of AS 11.76.100, 11.76.106, and 11.76.107;                                            
30                 (4)  determined that the agents and employees of the person had                                         
31       sufficient experience and ability to comply with the written policy and requirements of                           
01       AS 11.76.100, 11.76.106, and 11.76.107;                                                                           
02                 (5)  required the agents and employees of the person to verify the age                                  
03       of purchasers of cigarettes, cigars, tobacco, or other products containing tobacco by                             
04       means of a valid government issued photographic identification;                                                   
05                 (6)  established and enforced disciplinary sanctions for noncompliance                                  
06       with the written policy or the requirements of AS 11.76.100, 11.76.106, and                                       
07       11.76.107; and                                                                                                    
08                 (7)  monitored the compliance of the agents and employees of the                                        
09       person with the written policy and the requirements of AS 11.76.100, 11.76.106, and                               
10       11.76.107.                                                                                                        
11            (u)  A reduction in the period of suspension under this section may not be                                   
12       granted more than once in a 12-month period for a location or outlet in a location for                            
13       which the person holds a business license.                                                                        
14            (v)  Notwithstanding (d) of this section, in place of a hearing under (m) of this                            
15       section, the department and the person holding the business license endorsement may                               
16       enter into a memorandum of agreement regarding the imposition of a suspension and                                 
17       civil penalties based on a violation of AS 11.76.100, 11.76.106, or 11.76.107. The                                
18       memorandum of agreement must contain a provision that the person holding the                                      
19       business license endorsement admits or does not contest that a violation of                                       
20       AS 11.76.100, 11.76.106, or 11.76.107 occurred and accepts the imposition of                                      
21       suspension and civil penalty under this section. Based on the memorandum of                                       
22       agreement, the department may reduce the period of suspension. For violations                                     
23       involving AS 11.76.100, 11.76.106, or 11.76.107, the department may not reduce the                                
24       period of suspension by more than 10 days under (d)(1) of this section or by more than                            
25       20 days under (d)(2) of this section. The department may not agree to a reduction in                              
26       the period of suspension more than once in a 12-month time period for a location or                               
27       outlet in a location for which the person holds a business license endorsement.                                   
28            (w)  For purposes of (m)(5) of this section, a conviction for a violation of                                 
29       AS 11.76.100, 11.76.106, or 11.76.107 by the agent or employee of the person who                                  
30       holds the business license endorsement is rebuttably presumed to constitute proof of                              
31       the fact that the agent or employee negligently sold a cigarette, a cigar, or tobacco, or a                       
01       product containing tobacco to a person under 19 years of age. The person who holds                                
02       the business license endorsement may overcome the presumption by establishing by                                  
03       clear and convincing evidence that the agent or employee did not negligently sell a                               
04       cigarette, a cigar, or tobacco, or a product containing tobacco to a person under 19                              
05       years in violation of AS 11.76.100, 11.76.106, or 11.76.107 as alleged in the citation                            
06       issued to the agent or employee. The presentation of evidence authorized by this                                  
07       subsection does not constitute a collateral attack on the conviction described in this                            
08       subsection.                                                                                                       
09            (x)  Notwithstanding (d), (t), or (v) of this section, a period of suspension may                            
10       not be reduced for a violation of AS 11.76.100(a)(4).                                                             
11    * Sec. 7. AS 44.29.094 is amended by adding a new subsection to read:                                              
12            (h)  The department shall notify the person who holds the business license                                   
13       endorsement required by AS 43.70.075(a) that the person's agent or employee has                                   
14       received a citation for a violation of AS 11.76.100, 11.76.106, or 11.76.107. The                                 
15       department may make the notification by delivering a copy of the citation or another                              
16       document that includes the essential facts constituting the violation charged. The                                
17       department shall accomplish the delivery by                                                                       
18                 (1)  hand delivery of the citation or other document to a person who                                    
19       confirms that the person serves in a management or supervisory position at the                                    
20       location, or outlet in a location, where the alleged violation occurred; or                                       
21                 (2)  mailing the citation or other document by first class mail to the                                  
22       person who holds the business license endorsement; the department shall use the                                   
23       person's most current address that the Department of Commerce, Community, and                                     
24       Economic Development has on file for the person's business license endorsement                                    
25       under AS 43.70.075; the citation or other document shall be postmarked within five                                
26       business days after the citation is issued.                                                                       
27    * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to                          
28 read:                                                                                                                   
29       TRANSITION. (a) AS 18.74.010, enacted by sec. 2 of this Act, does not prohibit a                                  
30 wholesale dealer or retail dealer from selling or offering to sell an inventory of cigarettes                           
31 existing on the effective date of this Act if the wholesale dealer or retail dealer establishes that                    
01            (1)  state tax stamps were affixed to the cigarettes under AS 43.50 before the                               
02 effective date of this Act; and                                                                                         
03            (2)  the inventory was purchased before the effective date of this Act in                                    
04 comparable quantity to the inventory purchased during the same period of the previous year.                             
05       (b)  In this section, "retail dealer," "sell," and "wholesale dealer" have the meanings                           
06 given in AS 18.74.290.                                                                                                  
07    * Sec. 9. Section 2 of this Act takes effect on the first day of the 13th month after the month                    
08 in which this Act becomes law under AS 01.10.070.