Legislature(2011 - 2012)HOUSE FINANCE 519

02/27/2012 01:30 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HJR 16 CONST. AM: EDUCATION FUNDING TELECONFERENCED
Heard & Held
+ HB 250 EXTEND RENEWABLE ENERGY GRANT FUND TELECONFERENCED
Heard & Held
+= HB 224 SALES OF NICOTINE PRODUCTS TO MINOR TELECONFERENCED
Moved CSHB 224(FIN) Out of Committee
+= SB 30 RETURN OF SEIZED PROPERTY TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 302 REPEAL PICK-CLICK-GIVE AUDIT REQUIREMENT TELECONFERENCED
Moved CSHB 302(FIN) Out of Committee
HOUSE BILL NO. 224                                                                                                            
                                                                                                                                
     "An Act relating to the prohibition of selling or                                                                          
     giving tobacco or a product containing nicotine to a                                                                       
     minor unless prescribed by a licensed physician."                                                                          
                                                                                                                                
3:07:42 PM                                                                                                                    
                                                                                                                                
Co-Chair   Thomas   MOVED   to  ADOPT   proposed   committee                                                                    
substitute  for HB  224,  Work  Draft 27-LS0466\X  (Gardner,                                                                    
2/23/12).                                                                                                                       
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
JOE  MICHEL, STAFF,  REPRESENTATIVE BILL  STOLTZE, explained                                                                    
the changes in the CS. Language  on page 1, line 13 had been                                                                    
changed from "under 18 years-of-age"  to "under 19 years-of-                                                                    
age."                                                                                                                           
                                                                                                                                
Co-Chair  Stoltze asked  whether the  change was  consistent                                                                    
with current tobacco statutes.                                                                                                  
                                                                                                                                
Mr. Michel replied in the  affirmative. He communicated that                                                                    
a list had been inserted on page 2, line 5 of the CS:                                                                           
                                                                                                                                
     (A) prescribed by a health care professional;                                                                              
                                                                                                                                
     (B) given to a person by the person's parent or legal                                                                      
          guardian;                                                                                                             
                                                                                                                                
     (C) provided by a state-approved tobacco cessation                                                                         
          program administered by the Department of                                                                             
          Health and Social Services; or                                                                                        
                                                                                                                                
     (D) provided by a pharmacist to a person 18 years of                                                                       
          age or older without a prescription.                                                                                  
                                                                                                                                
Co-Chair  Stoltze  asked  whether an  explanation  would  be                                                                    
provided regarding the disparate age parameters (18 years-                                                                      
of-age and 19 years-of-age)  included in the legislation. He                                                                    
noted that the definition of  the word "is" included on page                                                                    
2, line 5 did not need to be explained.                                                                                         
                                                                                                                                
MARY   JANE  SHOWS,   STAFF,  REPRESENTATIVE   PAUL  SEATON,                                                                    
discussed that it  had come to the  sponsor's attention that                                                                    
there were new products containing nicotine.                                                                                    
                                                                                                                                
Co-Chair Stoltze asked  Ms. Shows to address  the changes in                                                                    
the CS.                                                                                                                         
                                                                                                                                
Ms. Shows  explained that the  language had been  changed to                                                                    
"under 19 years-of-age"  (page 1, line 13)  to allow tobacco                                                                    
cessation programs  to be accessible  to youths who  were 18                                                                    
years-of-age  or older.  Changes in  the bill  addressed the                                                                    
concern  that  tobacco  cessation   programs  had  not  been                                                                    
included in the  list of people who  could provide products.                                                                    
Additionally, 18 year-olds  would be able to  go directly to                                                                    
a pharmacist  for a  nicotine patch in  order to  quit using                                                                    
tobacco.                                                                                                                        
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, Work Draft 27-LS0466\X was ADOPTED.                                                                          
                                                                                                                                
3:12:11 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  whether products  provided by  a                                                                    
pharmacist to a  person 18 years-of-age or  older would only                                                                    
be  used to  help  the individual  quit  smoking. Ms.  Shows                                                                    
replied  in the  affirmative. She  explained that  items (1)                                                                    
and (2) in  the bill referenced products that  could be used                                                                    
under the program that were for cessation only.                                                                                 
                                                                                                                                
Representative Gara  wondered about the necessity  of the 18                                                                    
years-of-age or older provision.  He referenced youths under                                                                    
the age of 18 that wanted to quit smoking.                                                                                      
                                                                                                                                
Ms. Shows replied that Andrew  Harrington with Department of                                                                    
Law  had cited  concern that  the prior  bill version  would                                                                    
prohibit 18 year olds from  receiving the cessation products                                                                    
from a pharmacy. The language  had been changed to under 19-                                                                    
years-of-age  to  ensure  that   18  year  olds  would  have                                                                    
accessibility to the products;  individuals under the age of                                                                    
18 could receive the products from their parents.                                                                               
                                                                                                                                
Representative Gara wondered whether  17 year olds could get                                                                    
a pharmacist  prescription to help  them quit  nicotine. Ms.                                                                    
Shows  replied in  the  negative;  cessation programs  would                                                                    
only  provide literature  to youths  under 18  years-of-age.                                                                    
She expounded that the youth's  parents or a physician could                                                                    
access and provide the product to the youth.                                                                                    
                                                                                                                                
3:15:47 PM                                                                                                                    
                                                                                                                                
Vice-chair Fairclough wondered whether  there were any other                                                                    
products containing  nicotine that  would not  be regulated.                                                                    
She  referenced  caffeinated  energy  drinks.  She  wondered                                                                    
whether research  had been done  on other products  that may                                                                    
contain nicotine and on concentration levels.                                                                                   
                                                                                                                                
Ms. Shows  replied that  the issue had  been brought  to the                                                                    
sponsor's  attention because  of  new nicotine  dissolvables                                                                    
that were  not regulated by the  Federal Drug Administration                                                                    
(FDA). The  products were  currently being  test-marketed in                                                                    
four  or  five  states  and included  nicotine  hand  wipes,                                                                    
lozenges,  water,  tooth picks,  and  orbs.  The bill  would                                                                    
prohibit minors  from purchasing the new  products coming to                                                                    
the market.                                                                                                                     
                                                                                                                                
Vice-chair  Fairclough wondered  whether  research had  been                                                                    
done to determine if other  products contained nicotine. Ms.                                                                    
Shows  replied  that  she could  conduct  the  research  and                                                                    
follow  up  with  the information.  She  detailed  that  the                                                                    
research  had been  limited to  the products  that would  be                                                                    
marketed as "non-cessation."                                                                                                    
                                                                                                                                
Co-Chair  Stoltze asked  how the  sponsor  had obtained  the                                                                    
list  of  products  that  Ms.  Shows  mentioned.  Ms.  Shows                                                                    
replied that a  Virginia youth action group  had compiled an                                                                    
informative packet that had included the products.                                                                              
                                                                                                                                
Co-Chair   Stoltze  wondered   whether  the   products  were                                                                    
currently available.  Ms. Shows responded that  the products                                                                    
were currently in the test  marketing phase in Ohio, Oregon,                                                                    
Indiana, Colorado, and North Carolina.                                                                                          
                                                                                                                                
Representative Costello asked about  a $300 fine included in                                                                    
the  bill and  wondered  whether there  had been  discussion                                                                    
around increasing the fine in order to act as a deterrent.                                                                      
                                                                                                                                
Ms. Shows answered that there  had been discussion of having                                                                    
the  fine mirror  a  fine  related to  the  sale of  tobacco                                                                    
products; however, it was determined  that the specific fine                                                                    
would  make  it  onerous for  businesses  selling  cessation                                                                    
products and would create a  statutory problem. To avoid the                                                                    
difficulty, the fine had been limited to $300.                                                                                  
                                                                                                                                
3:19:55 PM                                                                                                                    
                                                                                                                                
Representative Gara clarified that  the language included in                                                                    
the bill stated that the fine  was "not less than $300." Ms.                                                                    
Shows agreed.                                                                                                                   
                                                                                                                                
Co-Chair Stoltze referred to the zero fiscal notes.                                                                             
                                                                                                                                
Representative  Gara asked  whether the  sale or  gifting of                                                                    
nicotine products to a minor was a misdemeanor or a felony.                                                                     
                                                                                                                                
ANDREW   HARRINGTON,   ATTORNEY,  COMMERCIAL/FAIR   BUSINESS                                                                    
SECTION,  DEPARTMENT OF  LAW, (via  teleconference), replied                                                                    
that  the offence  was a  violation  and did  not reach  the                                                                    
misdemeanor level.                                                                                                              
                                                                                                                                
Representative Gara  asked for  verification that  the store                                                                    
would be committing a violation and not a crime.                                                                                
                                                                                                                                
Mr.  Harrington  responded  that  the  individual  clerk  or                                                                    
employee  making  the  sale would  be  responsible  for  the                                                                    
violation if they acted negligently.  He detailed that under                                                                    
the parallel tobacco sale statute  (AS 11.76.100) there were                                                                    
sanctions that could be imposed on  the store if there was a                                                                    
negligent sale of tobacco to  a minor; there was no parallel                                                                    
provision for  the sale of  other nicotine  products because                                                                    
there was no endorsement required on the business license.                                                                      
                                                                                                                                
Representative  Gara pointed  to the  language related  to a                                                                    
fine of not less than $300.  He wondered whether there was a                                                                    
cap on  the maximum  fine. Mr.  Harrington replied  that the                                                                    
maximum fine was $500.                                                                                                          
                                                                                                                                
Representative  Gara queried  whether the  legislature could                                                                    
increase the cap  on the fine. Mr.  Harrington answered that                                                                    
there was no requirement for  a public defender, jury trial,                                                                    
or  other  procedure  protections  that  would  accompany  a                                                                    
misdemeanor or  felony. The dividing  line for how  high the                                                                    
fine might  before the Alaska Supreme  Court determined that                                                                    
criminal  protections  would  apply   was  not  defined.  He                                                                    
furthered  that it  may be  constitutionally permissible  to                                                                    
increase the $500 maximum, but  at some point the fine would                                                                    
hit the constitutional ceiling.                                                                                                 
                                                                                                                                
3:25:03 PM                                                                                                                    
                                                                                                                                
Representative Doogan  asked whether the  determination that                                                                    
an offense was  a minor violation was related  to the amount                                                                    
of money that  could be levied against it or  whether it was                                                                    
a separate function that was not connected to the amount.                                                                       
                                                                                                                                
Mr. Harrington  replied that  both items  played a  part. He                                                                    
explained  that  criminal  statutes classified  offenses  as                                                                    
felonies,  misdemeanors, or  minor offences.  Minor offenses                                                                    
included  violations and  the maximum  fine was  $500; there                                                                    
was  no  jail  time  available  for  a  minor  offense.  The                                                                    
legislature could  amend the statute  to change  the maximum                                                                    
fine, but at  some point due process  protections would kick                                                                    
in, which  would change the  prosecution procedures  and the                                                                    
fiscal note.                                                                                                                    
                                                                                                                                
Representative Doogan surmised that  the crime would have to                                                                    
be  reclassified if  the  fine  was increased  substantially                                                                    
above $500.                                                                                                                     
                                                                                                                                
Mr. Harrington replied that when  the amount got high enough                                                                    
the crime would have to  be reclassified. He did not believe                                                                    
there would  be any problem  increasing the fine to  $400 or                                                                    
$500, but  a conforming  amendment may  be necessary  if the                                                                    
amount was higher.  He furthered that the crime  may need to                                                                    
be  increased to  a misdemeanor  in order  for criminal  due                                                                    
process protections  to kick  in if  the fine  was increased                                                                    
substantially (e.g. to $1000 or $2000).                                                                                         
                                                                                                                                
Co-Chair Stoltze  noted that under  the scenario  the fiscal                                                                    
notes  would  change  substantially. He  asked  the  sponsor                                                                    
about the decision to set the minimum fine at $300.                                                                             
                                                                                                                                
REPRESENTATIVE   PAUL   SEATON,  SPONSOR,   explained   that                                                                    
currently  it  was not  illegal  to  distribute nicotine  to                                                                    
minors;  therefore, stores  were  not required  to keep  the                                                                    
products  behind the  counter and  were not  prohibited from                                                                    
selling the products  to youths. The bill  would help ensure                                                                    
that  stores  would  be   responsible  for  controlling  any                                                                    
nicotine  products  they  sold.  He relayed  that  the  bill                                                                    
represented  a  preemptive  move   to  prevent  minors  from                                                                    
becoming addicted to nicotine;  the $300 minimum fine helped                                                                    
to act as  a deterrent without getting into  the due process                                                                    
issue.                                                                                                                          
                                                                                                                                
3:29:48 PM                                                                                                                    
                                                                                                                                
Representative Edgmon  wondered whether the $300  fine would                                                                    
apply  towards   the  individual   and  the   business  that                                                                    
committed the crime.                                                                                                            
                                                                                                                                
Representative  Seaton  replied  that   the  fine  would  be                                                                    
charged to  the individual  who sold  the product.  The fine                                                                    
was not a business tax and  was not attached to the business                                                                    
license to avoid challenges  from occupational licensing and                                                                    
to business  licenses. He felt  that the bill  represented a                                                                    
clean  and  financially  reasonable  way for  the  state  to                                                                    
accomplish its goals without trying  to increase the offense                                                                    
to  a  misdemeanor or  felony,  which  would result  in  due                                                                    
process arguments.                                                                                                              
                                                                                                                                
Representative Edgmon  thought that the legal  definition of                                                                    
the word "person" expanded beyond a single individual.                                                                          
                                                                                                                                
Mr.  Harrington   replied  that  the  term   "person"  could                                                                    
encompass  a  business;  however,   there  was  a  practical                                                                    
limitation, given  that in circumstances in  which a product                                                                    
was negligently  sold it  would be  relatively easy  to show                                                                    
that  an  individual had  been  negligent  because they  had                                                                    
failed  to  check  an  ID.  He  furthered  that  it  may  be                                                                    
difficult to  show that a  business was negligent if  it had                                                                    
policies and procedures in place  that required employees to                                                                    
check for  ID. He agreed  that in some circumstances  a case                                                                    
could be made  against a business if it  had not implemented                                                                    
procedures specifying  that the  sale of nicotine  to minors                                                                    
was illegal. He noted that the occurrence was unlikely.                                                                         
                                                                                                                                
Representative  Gara  stated  that   the  bill  provided  no                                                                    
incentive for  businesses to  train their  employees because                                                                    
the  employee held  all of  the responsibility.  He wondered                                                                    
how the sponsor would feel  about adding language that would                                                                    
fine a business  if they negligently allowed  an employee to                                                                    
sell nicotine products to minors.                                                                                               
                                                                                                                                
Representative   Seaton  answered   that   there  had   been                                                                    
significant concern  that things became very  difficult if a                                                                    
violation was attached to the  business license. He believed                                                                    
that if businesses knew that  the sale of nicotine to minors                                                                    
was  illegal  that  they  would have  to  take  measures  to                                                                    
prevent  minors from  having access  to  the products  (e.g.                                                                    
placing products behind the counter).  He opined that rather                                                                    
than trying to include everything,  the goal could be met by                                                                    
making the sale of the products illegal.                                                                                        
                                                                                                                                
Representative Gara understood and  agreed with the concern;                                                                    
however, he was  concerned that all of  the liability rested                                                                    
on employees.                                                                                                                   
                                                                                                                                
3:36:10 PM                                                                                                                    
                                                                                                                                
Representative  Seaton replied  that the  products were  not                                                                    
being test-marketed  in Alaska.  He believed  that marketers                                                                    
would have a  difficult time getting businesses  to sell the                                                                    
products in  the state if  the distribution of  the products                                                                    
to  the target  audience  was illegal.  He  opined that  the                                                                    
direction of  the legislation was  a matter  of perspective.                                                                    
He  had found  that  concern  about attaching  a  fine to  a                                                                    
business license  was great enough  that it would  have been                                                                    
difficult  to  garner  enough  support   for  the  bill.  He                                                                    
believed it was  better to have a bill in  place that showed                                                                    
businesses that  there would be  a $300 fine to  an employee                                                                    
that  sold the  products to  minors. He  hoped the  products                                                                    
would never come to Alaska.                                                                                                     
                                                                                                                                
Co-Chair  Stoltze  did  not  want  to  make  the  bill  more                                                                    
complicated. He  discussed that the  bill was  preemptive in                                                                    
nature  and  was  a   simple  approach  towards  eliminating                                                                    
products that hopefully never made it to Alaska.                                                                                
                                                                                                                                
Representative Doogan  clarified that his  questions related                                                                    
to the amount of the fine had been informational.                                                                               
                                                                                                                                
Co-Chair  Stoltze was  happy the  questions  had been  asked                                                                    
given that the information was informative.                                                                                     
                                                                                                                                
Co-Chair Stoltze CLOSED public  testimony. He pointed to two                                                                    
zero  fiscal  notes  from  the Department  of  Law  and  the                                                                    
Department of Health and Social Services.                                                                                       
                                                                                                                                
Representative  Gara would  follow  up with  the sponsor  to                                                                    
discuss his concerns  that there should be  an incentive for                                                                    
businesses to provide training to employees.                                                                                    
                                                                                                                                
Vice-chair  Fairclough  discussed that  Anchorage  currently                                                                    
provided compliance; businesses had  been shut down based on                                                                    
the  sale  of  cigarettes   to  minors.  She  believed  that                                                                    
procedures  were  currently  in  place and  the  bill  would                                                                    
dovetail on the training  requirements that were included in                                                                    
current  law.   She  opined  that   the  bill  was   a  good                                                                    
preventative strike  and hoped  that the products  would not                                                                    
make it to Alaska for sale.                                                                                                     
                                                                                                                                
Co-Chair Stoltze shared  that he was proud of  a business in                                                                    
Chugiak  (Alice Mae's)  for electing  to limit  the sale  of                                                                    
tobacco products to individuals over the age of 21.                                                                             
                                                                                                                                
Vice-chair Fairclough  MOVED to report CSHB  224(FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  224(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with one  zero fiscal note from the                                                                    
Department  of  Health  and Social  Services  and  one  zero                                                                    
fiscal note from the Department of Law.                                                                                         
                                                                                                                                
3:42:20 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:43:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
AFN Support Resolution.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 Sponsor Statement.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 SHELDON JACKSON v. State.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 SCOTUS Voucher.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 Rethinking schools.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 DC school article.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HB 250 Sponsor Statement.pdf HFIN 2/27/2012 1:30:00 PM
HB 250
HB 250 -Energy Policy.pdf HFIN 2/27/2012 1:30:00 PM
HB 250
HB 250 - Supporting Letters.pdf HFIN 2/27/2012 1:30:00 PM
HB 250
HJR016-UPDATED NEW-OOG-DOE-2-27-12.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HB302 CS WORKDRAFT 27-LS126-I 2.23.12.pdf HFIN 2/27/2012 1:30:00 PM
HB 302
HJR 16 Response Memo to Rep Garapdf.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 AK Const Conv pages 1512 to 1525.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 Constit. Convention Proceedings pp. 1525-1529.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR16 Zelman v Simmons-Harrispdf.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR16 Sheldon Jackson College v State of Alaskapdf.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR16 Matthews v Quintonpdf.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR16-Alaska-K-12---School-Choice-Survey.pdf.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16
HJR 16 Additional Testimony.pdf HFIN 2/27/2012 1:30:00 PM
HJR 16