Legislature(2007 - 2008)HOUSE FINANCE 519

05/11/2007 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
= SB 84 TESTING & PACKAGING OF CIGARETTES
Moved HCS CSSB 84(FIN) Out of Committee
= SB 125 PERS /TRS CONTRIBUT'NS;UNFUNDED LIABILITY
Moved HCS CSSB 125(FIN) Out of Committee
Bills Previously Heard/Scheduled
SUMMARY                                                                                                                       
                                                                                                                                
CS SB 84(JUD)                                                                                                                   
          An  Act relating  to the testing  and packaging  of                                                                   
          cigarettes  to  be   sold,  offered  for  sale,  or                                                                   
          possessed  in  this  state; and  providing  for  an                                                                   
          effective date.                                                                                                       
                                                                                                                                
          HCS CS  SB 84 (FIN)  was reported out  of Committee                                                                   
          with  a ""  recommendation  and with  a new  fiscal                                                                   
          note  by  the  Department   of  Health  and  Social                                                                   
          Services,  fiscal  note  #4 by  the  Department  of                                                                   
          Public  Safety  and   a  new  fiscal  note  by  the                                                                   
          Department of Revenue.                                                                                                
                                                                                                                                
          HCS  CSSB 84  (FIN) was REPORTED  out of  Committee                                                                   
          with  a   "do  pass"  recommendation   and  with  a                                                                   
          previously  published fiscal  impact note  from the                                                                   
          Department  of  Public Safety  and  two new  fiscal                                                                   
          notes: DHSS #5 and REV #6.                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 125(FIN)                                                                                                 
          An Act  relating to  the accounting and  payment of                                                                   
          contributions  under  the retirement  plans of  the                                                                   
          Public Employees'  Retirement System of  Alaska and                                                                   
          the  Teachers' Retirement  System, to  calculations                                                                   
          of contributions under  those retirement plans, and                                                                   
          to  participation   in,  and  termination   of  and                                                                   
          amendments   to  participation   in,  the   defined                                                                   
          benefit  plans   of  those  systems;   relating  to                                                                   
          employer contributions  to the health reimbursement                                                                   
          arrangement  plan;  making  conforming  amendments;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          HCS CS  SB 125 (FIN) was reported  out of Committee                                                                   
          with   a   "do  pass"   recommendation   and   with                                                                   
          indeterminate   note  #1   by  the  Department   of                                                                   
          Administration   and   fiscal   note  #2   by   the                                                                   
          Department of Administration.                                                                                         
                                                                                                                                
CS FOR SENATE BILL NO. 84(JUD)                                                                                                
                                                                                                                                
     An Act relating to the testing and packaging of                                                                            
     cigarettes to be sold, offered for sale, or possessed                                                                      
    in this state; and providing for an effective date.                                                                         
                                                                                                                                
Vice Chair  Stoltze MOVED to  ADOPT work draft  #25-LS0596\N,                                                                   
Bannister,  5/9/07.    There   being  NO  OBJECTION,  it  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
SUZANNE  CUNNINGHAM, STAFF,  REPRESENTATIVE MEYER,  discussed                                                                   
the new  provisions of HCS CSSB  84 (FIN). The  Department of                                                                   
Health and Social Services (DHSS)  will be required to notify                                                                   
tobacco  endorsement  holders  when DHSS  investigators  cite                                                                   
employees  of  the endorsement  holder  for  selling  tobacco                                                                   
products  to  a  minor.  Notification   can  either  be  hand                                                                   
delivered  or postmarked no  later than  five days  after the                                                                   
citation  is issued.  Currently,  endorsement holders  become                                                                   
aware  of  the  violation  when  they  receive  a  suspension                                                                   
notice. The  committee substitute  (CS) expands the  criteria                                                                   
that  can  be  considered  in  a  hearing  pertaining  to  an                                                                   
endorsement holder's  license suspension  for a violation  of                                                                   
selling tobacco  products to a  minor. The new  criteria are:                                                                   
Did  the  endorsement  holder  adopt  or  enforce  education,                                                                   
compliance  and   a  disciplinary  program  for   agents  and                                                                   
employees?   Did   the  endorsement   holder   overcome   the                                                                   
presumption  that   an  employee  negligently   sold  tobacco                                                                   
products to a  minor? Were there other violations  of selling                                                                   
tobacco  to a  minor at  the endorsement  holder's  locations                                                                   
within  five  years  of  the   suspension  hearing?  Did  the                                                                   
endorsement  holder  engage in  conduct  that  was likely  to                                                                   
result in the sale of tobacco to a minor?                                                                                       
                                                                                                                                
The  committee   substitute  allows  the  suspension   to  be                                                                   
mitigated or aggravated  based on the new  criteria presented                                                                   
in  the committee  substitute  pertaining  to an  endorsement                                                                   
holder's license suspension.                                                                                                    
                                                                                                                                
Ms. Cunningham  observed that  the department could  reduce a                                                                   
first offense suspension by ten  days and a second offense by                                                                   
20  days. The  CS  provides that  a  suspension  can only  be                                                                   
reduced  once  in  a  twelve  month  time  period.  A  second                                                                   
suspension  cannot be reduced  if it  occurs within  a twelve                                                                   
month  period of the  first violation.  The  CS sets out  the                                                                   
endorsement holder's  responsibilities in regard  to training                                                                   
and education  programs. Evidence  submitted in a  suspension                                                                   
hearing  on a  license suspension  must show  that a  written                                                                   
policy was adopted  and enforced, employees were  informed of                                                                   
state laws and penalties and training  was conducted on state                                                                   
laws  and compliance.  Each employee  is required  to sign  a                                                                   
form stating that they have been  informed and understand the                                                                   
written  policy adopted  by the employer.  The employer  must                                                                   
determine  that  the  employee   has  sufficient  skills  and                                                                   
experience  to apply with  the written  policy in state  law.                                                                   
Agents and employees  must verify age before  selling tobacco                                                                   
products and monitor  the compliance of agents  and employees                                                                   
of the written  policy. The CS prohibits an  employee younger                                                                   
than 19 years of age from selling  tobacco products, since it                                                                   
is an age restricted product similar to alcohol.                                                                                
                                                                                                                                
8:55:14 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT  Amendment #1.  (Copy on File).                                                                   
To Page 11, after line 25, insert new Section:                                                                                  
                                                                                                                                
Ms. Cunningham explained that  discussion on the fiscal notes                                                                   
noted that  the Department  of Revenue  plans to use  receipt                                                                   
supported services that are collected  from the certification                                                                   
fees   for  self   extinguishing  cigarettes.   Clarification                                                                   
language  is needed  in statute.  A new  paragraph was  added                                                                   
under  the   definition  of   program  receipts:   (82)  fees                                                                   
collected under AS 18.74.080.                                                                                                   
                                                                                                                                
8:56:39 AM                                                                                                                    
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Representative Gara WITHDREW Amendments 2 and 3.                                                                                
                                                                                                                                
8:58:28 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  questioned if concerns regarding  due process                                                                   
have been resolved.                                                                                                             
                                                                                                                                
DIANE   CASTO,   SECTION  MANAGER,   PREVENTION   AND   EARLY                                                                   
INTERVENTION   SECTION,   DIVISION    OF   BEHAVIOR   HEALTH,                                                                   
DEPARTMENT OF  HEALTH AND SOCIAL  SERVICES felt that  the due                                                                   
process  issue had been  resolved. She  noted that  retailers                                                                   
are provided  an opportunity for  hearings and to  if certain                                                                   
                                        stnd                                                                                    
criteria are  laid out can  have their 1   and 2   violations                                                                   
reduced by an administrative law judge.                                                                                         
                                                                                                                                
8:58:47 AM                                                                                                                    
                                                                                                                                
Representative  Gara was comfortable  with the Department  of                                                                   
Law's  interpretation,  but  noted  that  the  issue  may  be                                                                   
decided in the Alaska Supreme Court someday.                                                                                    
                                                                                                                                
8:59:30 AM                                                                                                                    
                                                                                                                                
CINDY     DRINKWATER,     ASSISTANT     ATTORNEY     GENERAL,                                                                   
COMMERCIAL/FAIR    BUSINESS     SECTION,    CIVIL    DIVISION                                                                   
(ANCHORAGE),  DEPARTMENT  OF LAW,  spoke  to the  rebuttalble                                                                   
presumption  provision.  The presumption  is  that  citation,                                                                   
which resulted  in a conviction,  is proof of  the underlying                                                                   
fact  that  the  sale  occurred.   However,  the  endorsement                                                                   
holder can  provide evidence that  there was not  a negligent                                                                   
sale of  tobacco and  if they  overcame the presumption  then                                                                   
they would not be subject to a suspension period.                                                                               
                                                                                                                                
9:03:52 AM                                                                                                                    
                                                                                                                                
Ms.   Drinkwater  explained   that  the   employer  was   not                                                                   
negligent.  The   endorsement  holder   would  put   on  that                                                                   
evidence.                                                                                                                       
                                                                                                                                
Co-Chair Chenault  referred to  a case  in Fairbanks  where a                                                                   
disgruntled  employee  sold  tobacco   products  to  a  minor                                                                   
regardless   of  the   safeguards   of   the  employer.   The                                                                   
employer's  recourse  under  the  bill  would be  a  ten  day                                                                   
suspension instead of a 20 day suspension.                                                                                      
                                                                                                                                
9:05:48 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  noted that  HB 187,  which was introduced  to                                                                   
address due  process, was merged  into CSSB 84  (FIN). Public                                                                   
testimony was previously taken on both bills.                                                                                   
                                                                                                                                
9:07:04 AM                                                                                                                    
                                                                                                                                
Representative  Hawker   noted  concern  that   the  proposed                                                                   
amendments  do not  correct the  constitutional  deficiencies                                                                   
identified by  the Court and  suggested that the  issue would                                                                   
be decided in the courts.                                                                                                       
                                                                                                                                
9:08:40 AM                                                                                                                    
                                                                                                                                
Representative  Foster MOVED  to REPORT  HCS CS  SB 87  (FIN)                                                                   
out  of Committee  with individual  recommendations and  with                                                                   
the accompanying fiscal notes.   There being NO OBJECTION, it                                                                   
was so ordered.                                                                                                                 
                                                                                                                                
HCS CS SB  84 (FIN) was reported  out of Committee  with a ""                                                                   
recommendation and  with a new fiscal note  by the Department                                                                   
of  Health  and  Social  Services,  fiscal  note  #4  by  the                                                                   
Department  of Public  Safety and  a new fiscal  note by  the                                                                   
Department of Revenue.                                                                                                          
                                                                                                                                
AT EASE:       9:09:28 AM                                                                                                     
RECONVENE:     9:11:02 AM                                                                                                     
                                                                                                                                
Co-Chair  Meyer   clarified  a  new  fiscal  note   from  the                                                                   
Department  of Revenue,  dated 5/10/07,  was attached  to HCS                                                                   
CSSB 84 (FIN), which shows the receipt support services.                                                                        
                                                                                                                                
HCS CSSB  84 (FIN) was REPORTED  out of Committee with  a "do                                                                   
pass" recommendation  and with a previously  published fiscal                                                                   
impact  note from  the Department  of Public  Safety and  two                                                                   
new fiscal notes: DHSS #5 and REV #6.                                                                                           

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