Legislature(1997 - 1998)
04/28/1997 01:52 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
April 28, 1997
1:52 p.m.
MEMBERS PRESENT
Representative Joe Green, Chairman
Representative Con Bunde, Vice Chairman
Representative Brian Porter
Representative Norman Rokeberg
Representative Jeannette James
Representative Eric Croft
Representative Ethan Berkowitz
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 25
Proposing amendments to the Constitution of the State of Alaska to
guarantee the permanent fund dividend, to provide for
inflation-proofing, and to require a vote of the people before
spending undistributed income from the earnings reserve of the
permanent fund; and relating to the permanent fund.
- TABLED
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 189
"An Act relating to sale of tobacco and tobacco products; and
providing for an effective date."
- HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE
HOUSE BILL NO. 79
"An Act relating to the offense of possession of tobacco by a
person under 19 years of age."
- HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE
* HOUSE BILL NO. 232
"An Act establishing the independent division of administrative
hearings in the Department of Administration in order to provide a
source of independent administrative hearing officers to preside in
contested cases; relating to administrative hearing officers;
relating to contested case proceedings; and providing for an
effective date."
- HEARD AND HELD
CONFIRMATION HEARING ON GOVERNOR'S APPOINTMENT TO:
Violent Crimes Compensation Board
Leslie B. Wheeler
- CONFIRMATION ADVANCED
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 159
"An Act relating to sale, gift, exchange, possession, and purchase
of tobacco and tobacco products; and providing for an effective
date."
- SCHEDULED BUT NOT HEARD; ASSIGNED TO SUBCOMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: HJR 25
SHORT TITLE: CONST. AM: PERM. FUND INCOME & DIVIDEND
SPONSOR(S): REPRESENTATIVE(S) AUSTERMAN
JRN-DATE JRN-PG ACTION
02/26/97 483 (H) READ THE FIRST TIME - REFERRAL(S)
02/26/97 483 (H) STATE AFFAIRS, JUDICIARY, FINANCE
03/11/97 (H) STA AT 8:00 AM CAPITOL 102
03/11/97 (H) MINUTE(STA)
03/13/97 (H) STA AT 8:00 AM CAPITOL 102
03/13/97 (H) MINUTE(STA)
03/15/97 (H) STA AT 11:00 AM CAPITOL 102
03/15/97 (H) MINUTE(STA)
03/17/97 688 (H) STA RPT CS(STA) 3DP 4NR
03/17/97 689 (H) DP: JAMES, HODGINS, DYSON
03/17/97 689 (H) NR: ELTON, BERKOWITZ, VEZEY, IVAN
03/17/97 689 (H) FISCAL NOTE (GOV)
03/17/97 689 (H) ZERO FISCAL NOTE (REV)
03/17/97 689 (H) REFERRED TO JUDICIARY
03/21/97 789 (H) CORRECTED STA CS SUBMITTED
04/21/97 (H) JUD AT 1:45 PM CAPITOL 120
04/21/97 (H) MINUTE(JUD)
04/23/97 (H) JUD AT 1:00 PM CAPITOL 120
04/23/97 (H) MINUTE(JUD)
04/28/97 (H) MINUTE(JUD)
BILL: HB 189
SHORT TITLE: RESTRICT TOBACCO SALES
SPONSOR(S): REPRESENTATIVE(S) COWDERY, Austerman
JRN-DATE JRN-PG ACTION
03/12/97 640 (H) READ THE FIRST TIME - REFERRAL(S)
03/12/97 640 (H) LABOR & COMMERCE, JUDICIARY
04/03/97 922 (H) SPONSOR SUBSTITUTE INTRODUCED -
REFERRALS
04/03/97 922 (H) READ THE FIRST TIME - REFERRAL(S)
04/03/97 922 (H) L&C, JUDICIARY
04/09/97 (H) L&C AT 3:15 PM CAPITOL 17
04/09/97 (H) MINUTE(L&C)
04/10/97 (H) L&C AT 3:15 PM CAPITOL 17
04/10/97 (H) MINUTE(L&C)
04/18/97 (H) L&C AT 3:15 PM CAPITOL 17
04/18/97 (H) MINUTE(L&C)
04/21/97 1211 (H) L&C RPT CS(L&C) NT 4DP 1NR
04/21/97 1211 (H) DP: COWDERY, RYAN, HUDSON, ROKEBERG
04/21/97 1211 (H) NR: BRICE
04/21/97 1211 (H) 2 ZERO FISCAL NOTES (DPS, REV)
04/21/97 1225 (H) COSPONSOR(S): AUSTERMAN
04/28/97 (H) JUD AT 1:45 PM CAPITOL 120
BILL: HB 79
SHORT TITLE: MINOR IN POSSESSION OF TOBACCO
SPONSOR(S): REPRESENTATIVE(S) BUNDE, James
JRN-DATE JRN-PG ACTION
01/16/97 90 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/97 90 (H) STA, JUDICIARY, FINANCE
04/03/97 (H) STA AT 8:00 AM CAPITOL 102
04/03/97 (H) MINUTE(STA)
04/03/97 978 (H) COSPONSOR(S): JAMES
04/08/97 (H) STA AT 8:00 AM CAPITOL 102
04/08/97 (H) MINUTE(STA)
04/17/97 (H) STA AT 8:00 AM CAPITOL 102
04/17/97 (H) MINUTE(STA)
04/18/97 1166 (H) STA RPT CS(STA) NT 4DP 1DNP 1NR
04/18/97 1167 (H) DP: JAMES, ELTON, BERKOWITZ, DYSON
04/18/97 1167 (H) DNP: VEZEY
04/18/97 1167 (H) NR: IVAN
04/18/97 1167 (H) FISCAL NOTE (DCED)
04/18/97 1167 (H) REFERRED TO JUDICIARY
04/28/97 (H) JUD AT 1:45 PM CAPITOL 120
BILL: HB 232
SHORT TITLE: INDEPENDENT DIV. OF ADMIN. HEARINGS
SPONSOR(S): REPRESENTATIVE(S) OGAN, Kohring, Hodgins, Ryan,
Sanders, Dyson, Kott, Mulder, Vezey
JRN-DATE JRN-PG ACTION
04/04/97 990 (H) READ THE FIRST TIME - REFERRAL(S)
04/04/97 990 (H) JUDICIARY, FINANCE
04/18/97 1189 (H) COSPONSOR(S): VEZEY
04/28/97 (H) JUD AT 1:45 PM CAPITOL 120
WITNESS REGISTER
CASEY SULLIVAN, Legislative Administrative Assistant
to Representative John Cowdery
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801
Telephone: (907) 465-3879
POSITION STATEMENT: Testified on behalf of prime sponsor of SSHB
189.
REPRESENTATIVE JOHN COWDERY
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801
Telephone: (907) 465-3879
POSITION STATEMENT: Prime sponsor of SSHB 189.
LOIS IRWIN
167 West Bayview Avenue
Homer, Alaska 99603
Telephone: (907) 235-7172
POSITION STATEMENT: Testified during hearing of SSHB 189 in
support of "all tobacco bills"; testified
in support of HB 79.
DELISA CULPEPPER
Alaska Public Health Association
1874 Wickersham Drive
Anchorage, Alaska 99507
Telephone: (907) 563-7425
POSITION STATEMENT: Testified on SSHB 189 and HB 79.
JUDITH BENDERSKY
12901 Trent Circle
Anchorage, Alaska 99516
Telephone: (907) 345-1173
POSITION STATEMENT: Testified on SSHB 189 and HB 79; recommended
merging high points of SSHB 189, HB 79 and
SSHB 159.
BLAIR McCUNE, Deputy Director
Public Defender Agency
Department of Administration
900 West Fifth Avenue, Suite 200
Anchorage, Alaska 00501-2090
Telephone: (907) 264-4400
POSITION STATEMENT: Provided department's position and answered
questions regarding SSHB 189.
RUTH PARRIOTT
American Cancer Society
1057 East Fireweed Lane
Anchorage, Alaska 99508
Telephone: (907) 263-2076
POSITION STATEMENT: Testified on SSHB 189 and HB 79, with
comments on the tobacco tax.
ROSANNE TURNER, Member
Advisory Board on Alcoholism and Drug Abuse
18226 Gavin Circle
Eagle River, Alaska 99577
Telephone: (907) 279-2511
POSITION STATEMENT: Testified on SSHB 189.
LOREN JONES, Director
Division of Alcoholism and Drug Abuse
Department of Health and Social Services
P.O. Box 110607
Juneau, Alaska 99811-0607
Telephone: (907) 465-2071
POSITION STATEMENT: Provided department's position and answered
questions regarding SSHB 189 and CSHB 79(STA),
with comments on SSHB 159 and the tobacco tax.
ANNE CARPENETI, Assistant Attorney General
Legal Services Section
Criminal Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3428
POSITION STATEMENT: Provided department's position and answered
questions regarding SSHB 189 and CSHB 79(STA).
JOAN HAMILTON
P.O. Box 1275
Bethel, Alaska 99559
Telephone: (907) 543-6760
POSITION STATEMENT: Testified on SSHB 189, with comments on HB 79,
SSHB 159 and the tobacco tax.
PATRICIA SWENSON, Legislative Assistant
to Representative Con Bunde
Alaska State Legislature
Capitol Building, Room 104
Juneau, Alaska 99801
Telephone: (907) 465-6824
POSITION STATEMENT: Answered questions regarding CSHB 79(STA).
ANNETTE MARLEY, Youth Project Coordinator
Trampling Tobacco
Alaska Native Health Board
4201 Tudor Center Drive, Suite 105
Anchorage, Alaska 99508
Telephone: (907) 562-6006
POSITION STATEMENT: Testified on HB 79, with comments on the
tobacco tax.
BRIANA WILLIAMS
12110 Portage Drive
Anchorage, Alaska 99515
Telephone: (907) 344-9445
POSITION STATEMENT: Testified on HB 79, with comments on the
tobacco tax.
JAY HERMANSON
American Lung Association of Alaska
1057 West Fireweed Lane
Anchorage, Alaska 99503
Telephone: (907) 263-2085
POSITION STATEMENT: Testified on HB 79.
CATHERINE REARDON, Director
Division of Occupational Licensing
Department of Commerce and Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
Telephone: (907) 465-2534
POSITION STATEMENT: Provided department's position and answered
questions regarding CSHB 79(STA), with
comparisons to SSHB 159 and SSHB 189.
REPRESENTATIVE SCOTT OGAN
Alaska State Legislature
Capitol Building, Room 128
Juneau, Alaska 99801
Telephone: (907) 465-3878
POSITION STATEMENT: Prime sponsor of HB 232.
DAVID STANCLIFF, Legislative Administrative Assistant
to Representative Scott Ogan
Alaska State Legislature
Capitol Building, Room 128
Juneau, Alaska 99801
Telephone: (907) 465-2338
POSITION STATEMENT: Answered questions regarding HB 232.
EDWIN L. FELTER, JR., Director
and Chief Administrative Law Judge
Division of Administrative Hearings
1120 Lincoln Street, Suite 1400
Denver, Colorado 80203
Telephone: (303) 894-2500
POSITION STATEMENT: Testified in support of HB 232.
NANCY WELLER, Medical Assistance Administrator
Division of Medical Assistance
Department of Health and Social Services
P.O. Box 110660
Juneau, Alaska 99811-0660
Telephone: (907) 465-5825
POSITION STATEMENT: Provided department's position and answered
questions regarding HB 232.
LESLIE B. WHEELER
P.O. Box 878885
Wasilla, Alaska 99687
Telephone: (907) 376-9119
POSITION STATEMENT: Testified as Governor's appointee to Violent
Crimes Compensation Board.
DAVID CRUZ
HC04, Box 9323
Palmer, Alaska 99645
Telephone: (907) 746-3144
POSITION STATEMENT: Testified in support of HB 232.
ACTION NARRATIVE
TAPE 97-68, SIDE A
Number 0001
CHAIRMAN JOE GREEN called the House Judiciary Standing Committee
meeting to order at 1:52 p.m. Members present at the call to order
were Representatives Green, Bunde, Rokeberg, Croft and Berkowitz.
Representatives Porter and James joined the meeting at 1:56 p.m.
and 2:16 p.m., respectively.
HJR 25 - CONST. AM: PERM. FUND INCOME & DIVIDEND
Number 0052
CHAIRMAN GREEN brought before the committee House Joint Resolution
No. 25, proposing amendments to the Constitution of the State of
Alaska to guarantee the permanent fund dividend, to provide for
inflation-proofing, and to require a vote of the people before
spending undistributed income from the earnings reserve of the
permanent fund; and relating to the permanent fund.
CHAIRMAN GREEN noted that an executive session had been held that
morning regarding possible tax consequences of HJR 25.
Number 0072
REPRESENTATIVE CON BUNDE stated that there were a number of
questions yet to be answered. He made a motion to table HJR 25.
CHAIRMAN GREEN asked whether there was any objection. There being
none, HJR 25 was tabled.
SSHB 189 - RESTRICT TOBACCO SALES
[Contains intermittent discussion of HB 79, SSHB 159 and the
tobacco tax]
Number 0144
CHAIRMAN GREEN announced the next item of business was Sponsor
Substitute for House Bill No. 189, "An Act relating to sale of
tobacco and tobacco products; and providing for an effective date."
Number 0181
CASEY SULLIVAN, Legislative Administrative Assistant to
Representative John Cowdery, presented the bill on behalf of the
sponsor. He did not specify which version of the bill he was
addressing.
MR. SULLIVAN advised members that the legislation would accomplish
three things: limit public access to tobacco products in retail
premises; require employees to learn the relevant statute and sign
an affidavit attesting to their understanding; and increase the
penalties for selling tobacco to minors.
MR. SULLIVAN discussed the three goals. He referred to page 2,
line 7. He said first, the bill limits public access to tobacco
products in retail premises so that only the sales clerk will have
access to tobacco products prior to sale. This will ban self-
service tobacco displays found today in many stores. Mr. Sullivan
said that according to Americans for Nonsmokers' Rights, similar
laws have been enacted already in 171 U.S. cities.
MR. SULLIVAN said second, the bill requires employees to verify the
age of people whom they believe to be less than 27 years old.
Furthermore, retailers shall require their sales clerks to sign an
affidavit stating that they understand that it is illegal to sell
tobacco to those under the age of 19. He stated the belief that
this will put more responsibility on retail employees.
Number 0287
MR. SULLIVAN said third, there is a change in penalties. In
current statute AS 11.76.100(2)(d), selling or giving tobacco to a
minor is punishable by a fine of not less than $300. In this bill
version, the fines are similar to those for contributing alcohol to
a minor. A first violation is a class A misdemeanor, with a fine
of not more than $5,000, as stated in AS 12.55.035(b)(3). If a
second infraction occurs within five years, the person will be
guilty of a class C felony, with a possible $50,000 fine under AS
12.55.035(b)(2). Mr. Sullivan said this will provide a financial
incentive for the retail employers and employees to not sell
tobacco to minors, as well as an incentive for law enforcement
officials.
Number 0362
REPRESENTATIVE ERIC CROFT asked whether the age had been changed
back to 19.
MR. SULLIVAN replied that the age limit had never changed in the
sponsor substitute; it was still a minor under the age of 19.
Number 0388
REPRESENTATIVE BUNDE asked whether someone selling tobacco must
have a liquor license under this proposed legislation.
MR. SULLIVAN replied, "That's a good question. It's not
necessarily correct." He read from page 2, beginning at line 2 of
CSSSHB 189(L&C), which states in part, "(g) A person may not sell
cigarettes, cigars, tobacco, or a product containing tobacco unless
(1) the person also holds a liquor license issued under AS
04.11.090, 04.11.110, or 04.11.150 and the sale occurs on the
licensed premises, including sale by means of a vending machine
under (b) of this section".
MR. SULLIVAN noted that the proposed committee substitute that he
had provided, version F, removed subsection (g)(1). He then stated
that to sell tobacco, any retail shop must have a tobacco
endorsement, to be purchased in addition to the business license.
He believed the price of the endorsement would be $25.
Number 0473
REPRESENTATIVE BUNDE stated his understanding that one would need
a liquor license in addition to a tobacco endorsement.
MR. SULLIVAN said that was incorrect.
Number 0514
REPRESENTATIVE BUNDE noted that the penalty was being raised to a
class C felony for a second offense, which he understood may
involve jury trials and may have some impact on the court system.
He asked whether there was a fiscal note from the court system.
MR. SULLIVAN said no.
Number 0551
CHAIRMAN GREEN asked, "So now, the fact that it is not required, we
don't get into a restraint-of-trade problem, is that why it was
removed?"
MR. SULLIVAN said yes.
Number 0568
REPRESENTATIVE NORMAN ROKEBERG stated his understanding that the
basic intent is to have any retailer with a tobacco endorsement
ensure that the merchandise is displayed in such a manner that it
is not readily attainable or visible to people. He requested
clarification.
MR. SULLIVAN, noting that current self-service displays allow for
shoplifting and easy access to tobacco products, said, "Our intent
in this legislation is to remove self-service displays so that
anyone who wishes to purchase any tobacco product will have to go
through the clerk."
Number 0701
REPRESENTATIVE CROFT asked which committee substitute they were
using as a work draft.
CHAIRMAN GREEN replied that they had not yet accepted one, although
version B, CSSSHB 189(L&C), was before them.
Number 0723
REPRESENTATIVE CROFT said to Mr. Sullivan, "The prior version, the
Labor and Commerce version, did allow someone to sell if they had
a liquor license, and that was enough. The new version wouldn't.
Is that correct?"
MR. SULLIVAN explained that the intent in the original version was
to limit access to minors as much as possible, limiting it to
places where minors cannot enter, such as establishments with
liquor licenses.
MR. SULLIVAN again read from page 2, beginning at line 2 of CSSSHB
189(L&C), subsection (g), noting that it related to Representative
Bunde's question about liquor licenses. He said they had not felt
it was a proper statement. Even though a person held a liquor
license and the sale occurred on the licensed premises, that did
not necessarily mean the person could sell tobacco because it did
not state that the person had a tobacco endorsement. Therefore,
they wanted to delete that.
Number 0827
REPRESENTATIVE ROKEBERG made a motion to adopt as a work draft 0-
LS0711\F, Ford, 4/21/97. There being no objection, version F was
before the committee.
Number 0856
REPRESENTATIVE ROKEBERG referred to Mr. Sullivan's memorandum
attached to that work draft, which briefly discussed the
differences between CSSSHB 189(L&C) (version B) and version F. He
understood the memorandum to clarify that a liquor license holder
merely has to purchase a tobacco sales endorsement; the language
was being changed because it was redundant. The other section
merely removes the effective date. Those are the only differences
in the new version.
MR. SULLIVAN affirmed that.
CHAIRMAN GREEN requested clarification.
Number 0903
REPRESENTATIVE ROKEBERG explained that the prior bill mentioned the
liquor licensee. However, that is superfluous because this bill
allows anyone who has a tobacco endorsement, as required under
existing statute, to sell tobacco. It does not necessarily have
anything to do with a liquor licensee, although such a licensee
certainly would have the right to purchase a tobacco endorsement.
CHAIRMAN GREEN asked whether that requirement was not in the bill
that came before the House Labor and Commerce Standing Committee.
Number 0951
REPRESENTATIVE ROKEBERG said no; it stipulated liquor licenses. He
believed there was confusion because people had thought this bill
restricted the marketing of tobacco products to licensed premises.
However, that was not the case. Nor did he believe that had ever
been the sponsor's intention.
CHAIRMAN GREEN stated his understanding that it had now been
corrected and no longer was part of the issue.
MR. SULLIVAN affirmed that, saying it was a technical difficulty.
Number 1024
REPRESENTATIVE ETHAN BERKOWITZ said he didn't see fiscal notes from
the Public Defender Agency, the Department of Law or the Department
of Corrections. He asked whether those were in progress.
Number 1049
REPRESENTATIVE JOHN COWDERY, prime sponsor, apologized for being
late. He advised members that he had requested information on the
possible costs but had only received one response, pertaining to
the prosecution of minors. He emphasized that this has nothing to
do with prosecuting minors or incurring related costs; laws exist
for that. This bill addresses and restricts the sale. Information
he has gathered indicates it would be effective once people
understand the penalties involved in selling the product.
Number 1132
REPRESENTATIVE BERKOWITZ stated concern about the exchange of a
cigarette, which constitutes a giving of tobacco, being
prosecutable first as a misdemeanor and then as a felony. He said
regardless of age, that would seem to apply.
REPRESENTATIVE COWDERY responded that the object of the bill is to
restrict the sale to minors; they had put in stiff penalties for
that. He did not know how one would address a situation such as
cigarettes being passed around or how fine a line to draw. He
pointed out that penalties for a minor were in a different statute.
Number 1205
CHAIRMAN GREEN asked: If this were to occur between minors a
second time, how would it be treated?
MR. SULLIVAN responded that the existing statute, AS 11.76.100,
relates to someone who is not a minor selling or giving tobacco to
a minor. Therefore, it is someone over the age of 19 selling or
giving it to someone under the age of 19. He emphasized that they
are aiming at retail premises where these products are sold.
MR. SULLIVAN, in response to an earlier question by Representative
Berkowitz, reported that they had received zero fiscal notes from
the Department of Public Safety; the Office of Public Advocacy; and
the Division of Occupational Licensing, Department of Commerce and
Economic Development. He said those were the only ones the
committees had requested thus far.
Number 1251
REPRESENTATIVE BUNDE advised members that in tobacco-related
discussions in other committees, some parents had indicated they
give their children cigarettes if they so choose. He noted that
under this legislation, a parent would be subject to a misdemeanor,
for the first cigarette, and then a felony.
MR. SULLIVAN concurred. He stated, "In contributing to the
delinquency of [a] minor, there are certain establishments for
things that happen in the home, giving alcohol and the like." He
said they had explored that option, but it would probably be
covered for someone in the home, under the supervision of an adult.
Number 1297
REPRESENTATIVE BRIAN PORTER also apologized for being late. He
said he noticed in all versions of the bill, the phrase "person
under the age of 19" had been substituted for the word "minor".
Stating his belief that those have the same meaning, he asked the
reason for the change.
MR. SULLIVAN replied, "I think merely a stylistic change, there, by
the drafter, by Ford. It was not something that we requested
specifically."
Number 1334
REPRESENTATIVE PORTER asked whether currently a seller of tobacco
must have a license.
MR. SULLIVAN affirmed that. It is a tobacco endorsement, with
different types for different establishments. For example, there
is a $25 license for a retailer such as a small market, whereas for
a liquor establishment with a vending machine, there is a separate
tobacco endorsement license.
REPRESENTATIVE PORTER asked whether any provision jeopardized that
endorsement or license if someone violated this by selling to
minors.
MR. SULLIVAN said under this legislation, no. However, there are
stipulations already in place. He referred to AS 43.70.075(d),
which states, "If a person who holds an endorsement ... or an agent
or an employee of a person who holds an endorsement ... has been
convicted of violating AS 11.76.100 ..., the department may suspend
the endorsement for a period of not more than (1) 45 days; or (2)
90 days, if within the past 24 months the person has been
previously convicted ...." Mr. Sullivan commented that there is a
pretty large financial problem for people who do that.
Number 1411
REPRESENTATIVE PORTER requested discussion of the reason for
requiring identification from persons who appear to be age 27 or
younger, when the applicable age is 18 or younger.
REPRESENTATIVE COWDERY recounted a recent observation of a clerk
refusing to sell cigarettes to a young woman who appeared to be at
least 19 but under the age of 27. He suggested this law must exist
already, at least in local ordinance.
Number 1495
REPRESENTATIVE BUNDE said federal regulations now require people
who appear to be younger than 27 to provide identification.
Number 1524
LOIS IRWIN testified via teleconference from Homer. Because of
teleconference problems, she had missed most of the conversation
and said she would just listen. However, she stated her full
support for tobacco bills, "all of them, in one form or another."
Number 1550
DELISA CULPEPPER, Alaska Public Health Association (APHA),
testified via teleconference from Anchorage, stating that the APHA
supports most of the provisions in this bill. In particular, they
support limiting self-service tobacco displays to places with
liquor licenses or other places where minors don't have access.
She said many local and federal surveys show that shoplifting is a
major way of obtaining cigarettes. This would help reduce access.
MS. CULPEPPER discussed new federal regulations through the Food
and Drug Administration (FDA). She believes regulations relating
to checking identification for persons appearing to be under the
age of 27 were enacted in February. She had seen signs about that
in Anchorage already, where she believes people are well-informed
about it. She said other regulations may be coming up in August,
relating to limiting access to vending machines, for example; she
believes those are still in question.
MS. CULPEPPER said there is an advantage to having state laws that
parallel federal regulations, to help with local enforcement.
Anything the bill could do to encourage enforcement, not just
having a law, would be useful. In some places in Alaska, local law
enforcement officials have refused to do required federal
compliance checks to see what level of availability there is for
tobacco products. Currently, this bill does not address that. The
APHA would like to see enforcement incentives and tools built in.
Number 1693
JUDITH BENDERSKY testified via teleconference from Anchorage,
saying she basically concurred with Ms. Culpepper's testimony. In
addition, she was concerned about the requirement that clerks sign
a form, a fairly brief statement that they understand the laws.
Her concern is that it does not address a "more-rounded-out
education package" that would really educate them about tobacco and
the laws. She said ultimately, if there is no enforcement of that
by either the employer or law enforcement officials, it would waste
everyone's time.
Number 1753
BLAIR McCUNE, Deputy Director, Public Defender Agency, Department
of Administration, testified via teleconference from Anchorage,
specifying that he would address the penalty section, the only part
that would affect his agency's case load or operations.
MR. McCUNE reported that they had not yet put in a fiscal note. He
had asked the Department of Law whether they had figures regarding
the number of prosecutions they might expect; if his agency could
obtain that information, they could prepare a fiscal note.
However, if the Department of Law has no figures on anticipated
prosecutions, the Public Defender Agency would likewise not
anticipate defending such cases.
Number 1787
MR. McCUNE noted that the penalties are fairly severe. He said he
is a little unsure whether this is directed at people who sell
tobacco in retail operations or people who might just be giving
tobacco products to a minor. He believes as it is currently
written, it would apply to somebody who exchanges or gives tobacco;
that could be quite a few cases if the law is prosecuted.
MR. McCUNE referred to an earlier analogy made to furnishing
alcohol to a minor and said, "That statute, which is Alaska Statute
04.16.051, has exceptions for parents and guardians. And it's also
been on the books since 1980, and I believe quite a bit before
that. ... This type of law is well-known to the public. One of the
problems we get is that ignorance of the law is no excuse. If
you're going to make giving tobacco products to a minor, other than
through a retail situation, this serious a crime, I think that
you'd have to have some kind of notice to the public or else we'd
get a lot of cases where people wouldn't know the conduct was
illegal and yet be subject to a prosecution without a defense on
that basis."
Number 1870
CHAIRMAN GREEN said he imagined there would be some notification.
He asked whether Mr. McCune believed the penalties may be too
severe for the crime or that the courts may hold that they are too
severe.
MR. McCUNE said he believed that the penalty being too severe for
the crime only comes into play when there is cruel and unusual
punishment or violation of the due-process clause of the federal or
state constitution. In his experience as a lawyer, it is fairly
rare that the courts will try to second-guess the legislature and
say that penalties are too severe for a crime. Although that might
come up if the legislative history shows a lot of concern about
this matter, Mr. McCune does not believe the courts will step in
and use these constitutional provisions to strike it down.
Number 1942
RUTH PARRIOTT, American Cancer Society, came forward to testify,
stating that she is a tobacco policy specialist and "government
relations person" for that organization. She reported that one-
third of all cancers are caused by tobacco use and 90 percent of
tobacco users begin as children. The American Cancer Society is
particularly pleased to see the clear self-service ban outlined in
the bill. She said that has proven to be effective in certain
cities and that stores which do not allow self-service are far less
likely to sell to minors.
MS. PARRIOTT said along with "carding" people who appear to be
under age 27, these are provisions covered by the FDA rule
mentioned earlier. She explained, "That was a federal rule that's
being put into effect this year. The carding went into effect in
February. The self-service ban will go into effect in August.
That was just upheld by a judge in North Carolina last week; you
may have heard that. And, may I say, if a judge in North Carolina
upheld those rules, we're pretty safe, all the way to the supreme
court. So, I believe ... those will stand across the country. And
the American Cancer Society does recommend that states take similar
action to remain in parallel with the federal statute. So, I'm
pleased to see all that."
MS. PARRIOTT cautioned about the need to keep working on these
issues in terms of enforcement. She stated, "There's been concerns
all across the state that the laws that have been on the books for
years have not been consistently enforced. And without some sort
of mechanism that encourages local law enforcement and provides the
resources to local enforcement, I'm not sure if we're going to see
a change in that. And that would be our major concern, and we
would encourage the legislature to keep working on that issue."
Number 2038
CHAIRMAN GREEN asked what Ms. Parriott's understanding was of the
penalty for violating the federal carding law.
MS. PARRIOTT replied, "I believe it can go up to $500."
Number 2047
REPRESENTATIVE BUNDE commented that a federal requirement that
prohibits self-service will go into effect shortly. He suggested
this bill would simply parallel what the federal regulations are
about to achieve.
MS. PARRIOTT responded, "I believe the way this new version F is
written may actually go a bit beyond the federal rule, in that the
federal rule, I believe, will allow self-service in places where
people under the age of 21 are not allowed. Certain bars and
clubs, is the way the federal rule is written, and Representative
Cowdery's F version doesn't deal with that special exception ...."
Number 2085
ROSANNE TURNER, Member, Advisory Board on Alcoholism and Drug
Abuse, came forward to testify, saying this is a highly important
issue. In the last few years, she has devoted her career to
working with children and families. She said this looks at the
needs of children and she would address it from that point of view.
MS. TURNER advised members that she works for the Head Start
program. Staff had informed her recently that a six-year-old was
suspended from school because of smoking; however, the retailer was
not punished. Ms. Turner travels to bush communities regularly and
sees smokeless tobacco accessed by numerous children. She stated,
"I know that we've seen and are working on a proposal for smoke
cessation for children starting at three and up. I think that's a
criminal act, that we have to begin starting cessation for children
at that age. I think there are children who are role-modeling for
children. And children who are chewing smokeless tobacco are
chewing it just like they would chewing gum, which is a behavior
pattern that they start building as babies."
MS. TURNER said that "if we can prevent this from happening before
that child reaches 19 years old, the likelihood that they will
continue to use any toxic tobacco, the likelihood [is] as an adult
it will not affect them. I think those are the kinds of real
figures that we need to look at, the health and safety of our
children."
MS. TURNER thanked legislators for bringing forward not only SSHB
189 but also HB 79 and SSHB 159, saying they truly speak about the
children and what the Alaska community needs to do.
Number 2243
REPRESENTATIVE BUNDE asked, if these enforcement bills passed,
whether Ms. Turner believed that would be enough to prevent young
people from beginning to smoke.
MS. TURNER replied that she believed it should be approached from
that angle. However, some current statutes are not being enforced.
Number 2280
CHAIRMAN GREEN asked whether Ms. Turner believed this would provide
a deterrent to either adults buying tobacco products for children
or to family members giving them to children.
MS. TURNER stated her belief in the need to give strong messages to
people and in the importance of role-modeling.
Number 2325
REPRESENTATIVE BERKOWITZ asked whether Ms. Turner believed that
also putting a tobacco tax in place would enhance enforcement.
MS. TURNER referred to HB 79 and said she really likes that it
addresses local control. She stated that tax on tobacco is also a
deterrent. "Yes is the answer," she concluded.
Number 2361
LOREN JONES, Director, Division of Alcoholism and Drug Abuse,
Department of Health and Social Services, advised members that
particular provisions of the bill appeal to the division in the
sense that it raises the penalty against the vendor. He believes
enforcement is an appropriate part of the process to limit access
and use by youth. However, without the increased tax (proposed in
other legislation), the increased penalties in these bills will not
have the effect desired by the sponsor or the division.
MR. JONES expressed concern that there does not appear to be a
credible look at how this would be enforced. Local law enforcement
has many higher priorities. Mr. Jones said he could understand
some of the concern about whether the Department of Law or the
Public Defender Agency had a fiscal note, because in Alaska, they
can find no record of a conviction for selling. Mr. Jones
specified, "To our knowledge, no vendor has ever been convicted of
selling tobacco to a person under the age of 19."
Number 2421
MR. JONES referred to an earlier question by Representative Porter
and said it is true that there is a penalty against the license
endorsement. However, in order for that to be enforced, there must
be a conviction under the criminal statute, and it is a cumbersome
process. Those like himself who have worked for alcohol-related
and other criminal deterrents understand that in order for a
deterrent to be effective, there must be a perception that the
person who perpetrates the crime will be caught and that the
penalty will be swift and severe enough. But there is no such
public perception today.
TAPE 97-68, SIDE B
Number 0006
MR. JONES emphasized that passing a law that increases penalties
certainly has its place. However, without credible enforcement
activity, the division believes that the benefits from that change
will not occur.
Number 0020
CHAIRMAN GREEN asked whether Mr. Jones agreed with Ms. Turner that
the tobacco tax would complement this as a deterrent.
MR. JONES stated, "I believe that the tax will have the most
benefit."
Number 0035
REPRESENTATIVE JEANNETTE JAMES asked how these violations would be
brought to the proper authority's attention. For example, under
this language, would a person file a complaint in order to bring
the issue before the courts? Or would a police officer or other
authorized person have to catch a violator in the act? She
suggested vending machine violations may be easier to observe than
sales to persons under the age of 19.
MR. JONES replied, "The easiest way is if a police officer observed
the sale. That way, the officer could give the citation or make
the arrest. Absent that, not being an attorney, I believe that if
a complaint were made, say, by the parent of a child that such-and-
such a store -- given the penalties, I'm not exactly sure of the
process. If they thought it was a felony, I believe that that has
to go before a grand jury if it's not observed by a police
officer."
MR. JONES continued, "One of the concerns that we have had in this
whole process is that sales is a difficult thing to observe.
Police officers can be near a school. Police officers can see a
youth walking down the street. A police officer can stop a youth
for some other potential violation and see that they have tobacco.
And that's easily done. For a police officer to observe a sale in
a grocery store, observe a sale in a gas station, is a much more
difficult process and requires some effort on their part. And that
effort, in most communities, has not been forthcoming." He
suggested the Department of Law may have a better answer.
Number 0140
ANNE CARPENETI, Assistant Attorney General, Legal Services Section,
Criminal Division, Department of Law, came forward to testify,
saying she had intended to discuss only the penalty phase but would
answer other questions if she could.
MS. CARPENETI explained that currently, furnishing tobacco to a
minor is a violation under AS 11.76.100. The culpable mental state
is negligence, which is unusual for a Title 11 provision. "And
it's there now because right now it's a violation, and you don't
need to have a culpable mental state for a violation," she
explained. "But if you raise the penalty to an A misdemeanor or a
... C felony, you'll need to change the culpable mental state in
order to prosecute it, or ... you'll find that you'll have due
process and constitutional problems with the substantive
provision."
CHAIRMAN GREEN asked: "We cannot go to that high a penalty without
making it a tort of intent, or a violation?"
MS. CARPENETI replied, "Well, it doesn't necessarily have to be
intent, but for most crimes, recklessness is the common culpable
mental state, is the lowest. You can also go to knowing or
intentional. ... But mere negligence will not do it. There are
some provisions in our criminal code that provide a culpable mental
state of criminal negligence; there are very few in the criminal
code."
Number 0195
REPRESENTATIVE BUNDE discussed an incident involving a constituent
whose son had purchased tobacco at a quick-stop grocery store. The
mother was upset and telephoned the police twice. However, the
police said they had not witnessed it and could do nothing about
it. The woman then offered to have another son make a purchase
there and videotape it for evidence, but the police responded that
if she did that, her son would be charged with possession and she
would be charged with contributing to delinquency. She had asked,
then, why the police didn't do a sting operation employing young
people to make controlled buys. However, in this case, the
Anchorage police believed that state law did not allow that.
REPRESENTATIVE BUNDE asked: Would this bill allow compliance
checks?
MS. CARPENETI replied that she did not believe SSHB 189, in its
current form, would allow children to participate with the police
in a sting operation. "Specifically, other bills that are before
you do that," she added.
Number 0249
REPRESENTATIVE BUNDE noted that testimony indicated there had been
no enforcement. He asked, with this increased state of
culpability, whether it would be more difficult to enforce this law
than existing law.
MS. CARPENETI replied that the higher the culpable mental state
that the state is required to establish, the more difficult it is
to establish its case in chief. Negligence is the easiest
culpable mental state for the state to prove.
Number 0278
REPRESENTATIVE BUNDE commented, "Obviously, you can't get below
zero in enforcement anyway." He asked what the fiscal impact of
this bill would be on the Criminal Division.
MS. CARPENETI responded that it was difficult to put a price on
this particular bill because they had no history upon which to base
it. Noting that Mr. Jones had said there had been no convictions,
Ms. Carpeneti advised members, "I don't know that there have been
any prosecutions for the offense. So, there hasn't been much
enforcement to tie a fiscal price to."
Number 0299
CHAIRMAN GREEN said there had been discussion that perhaps this
would incur a fiscal note through the prosecution aspect, whereas
other comments had indicated that because the penalty is so stiff,
people would be highly reticent to violate it and, thus, there
would be no large increase in the court load. He asked whether Ms.
Carpeneti had a feel for that, one way or the other.
MS. CARPENETI stated, "Well, I would hope that vendors would take
it seriously at a higher level of offense and be more careful not
to violate the law. But that's the best I can do."
Number 0342
JOAN HAMILTON testified via teleconference from Bethel, specifying
that she was speaking as a parent. She pointed out that in SSHB
159, HB 79 and SSHB 189, there is a discrepancy regarding age. She
referred to HB 79 and SSHB 189 and stated that one bill says,
"under the age of 19," and the other says, "19 and over." On the
other hand, SSHB 159 says, "under 21." She suggested these should
be corrected to make the three more compatible.
MS. HAMILTON said she has an 18-year-old son who started smoking
cigarettes the previous year. He had told her that people his age
buy cigarettes from the Snack Shack (ph), ordering items to go and
then ordering cigarettes. "And Snack Shack would deliver the
cigarettes," Ms. Hamilton said. "I spoke to the Snack Shack
themselves; they denied it. And then I went to the Korean
community and they said they would talk about it. And ... I went
to them at least three times, trying to get them to talk to this
gentleman, because when I tried to talk to him, he didn't speak
English."
MS. HAMILTON continued, "So, my son offered to tell the police
where he got the cigarettes and how they bought them. They came to
the house. My son was cited for possessing cigarettes. And the
Snack Shack never got visited by the police, that I know of,
because I've checked up on it. And what Mr. Jones said, it's true.
I don't think they go after the vendors."
MS. HAMILTON concluded, "We, as parents, are trying to teach good
habits in our teenagers. But when we report something to the
police, we don't really need to have our children get hauled off to
court for possession of cigarettes. And I think, as a parent, the
more taxes you put on tobacco products, the better." Ms. Hamilton
urged prosecution of the vendors.
Number 0509
CHAIRMAN GREEN announced that public testimony was closed.
Number 0515
REPRESENTATIVE PORTER made a motion to amend the bill by adding a
new section that would change AS 11.76.100(a)(1) by deleting the
word "negligently" and inserting the word "recklessly". He noted
that committee packets contained that statute. The new section
would include all of that wording but change "negligently" to
"recklessly", so as to meet the standard necessary for a criminal
misdemeanor and felony.
CHAIRMAN GREEN asked whether there were comments or questions. He
called a brief at-ease at 2:54 p.m. and called the meeting back to
order at 2:55 p.m.
Number 0574
REPRESENTATIVE PORTER stated, "I guess for clarification, if this
bill left in place a violation of some nature, in this section, I
would want to leave `negligently' for that purpose and put
`recklessly' for the criminal offenses. But it's my understanding,
unless I'm mistaken, that the bill eliminates the violations and
establishes a first-offense class A misdemeanor and a second-
offense class C felony. So, to the extent that that is true, I
think `recklessly' would be the standard for both of those --
should be the standard."
Number 0601
REPRESENTATIVE BUNDE suggested that because there were three bills
scheduled regarding tobacco, they might hear all three before
making changes.
CHAIRMAN GREEN said that was a good suggestion. However, an
amendment had been proposed.
Number 0625
REPRESENTATIVE PORTER stated that to make this bill internally
consistent, regardless of what they ultimately decided to do with
it, he believed the amendment was appropriate.
CHAIRMAN GREEN asked whether there was an objection to the
amendment.
REPRESENTATIVE BERKOWITZ objected.
CHAIRMAN GREEN requested a roll call vote. Voting for the
amendment were Representatives Porter, James and Green. Voting
against it were Representatives Bunde, Croft and Berkowitz.
Representative Rokeberg was absent. Therefore, the amendment
failed, 3 to 3.
CHAIRMAN GREEN asked whether Representative Bunde's earlier
suggestion was a recommendation.
REPRESENTATIVE BUNDE said yes.
CHAIRMAN GREEN asked whether there was any objection to setting the
bill aside until after all three tobacco-related bills were heard.
There being none, SSHB 189 was temporarily tabled.
Number 0724
CHAIRMAN GREEN asked whether anyone was there from Representative
Kott's office to present SSHB 159; no one was present.
HB 79 - MINOR IN POSSESSION OF TOBACCO
[Contains intermittent discussion of SSHB 189, SSHB 159 and tobacco
tax; HB 79, SSHB 189 and SSHB 159 assigned to subcommittee
following testimony]
Number 0756
CHAIRMAN GREEN announced the committee would next hear House Bill
No. 79, "An Act relating to the offense of possession of tobacco by
a person under 19 years of age."
Number 0768
REPRESENTATIVE BUNDE, prime sponsor, explained that this bill had
gone through the House the previous year but "got slowed down on
the other end." He read from portions of the sponsor statement for
CSHB 79(STA), with additional comments:
"House Bill 79 adds stronger requirements, restrictions and
prohibitions on the sale of cigarettes and tobacco products to
minors. This proposed legislation does some of the same things as
the other two bills, but I'll try to highlight the differences.
"This restricts the placement of vending machines and requires
stricter supervision of vending machines. It prohibits the sale of
cigarettes in packs of fewer than 20. And, Mr. Chairman, it came
as a surprise to me that there are actually places where they sell
single cigarettes. And that apparently is a place where young
people, price-sensitive that they are, do buy cigarettes.
"It requires all cigarettes and tobacco products to be placed in
areas accessible only to employees, as [SSHB] 189 does, and meets
compliance with federal law. It requires employers to get training
before they are allowed to sell tobacco or to renew their tobacco
endorsement on business licenses. Retailers must pay the cost of
their training and that of their employees.
"It enables the state to be in compliance with the federal Synar
amendment, which basically allows compliance checks or sting
operations for the sale of tobacco to minors. ... It raises the
cost of a license endorsement to sell tobacco and requires that
each store selling tobacco ... purchase an endorsement.
"It imposes a $300 fine on minors convicted of possession of
tobacco. It adds an anti-preemption provision to prevent tobacco
companies from preempting local governments' authority to tax
tobacco products or extend programs to limit youth access to
tobacco. It raises penalties for retailers convicted of selling
the product to minors. I'd point out that this aligns with both
sides of the equation.
"It prohibits the sale of tobacco in any form unless they're carded
for the `under 27.' It requires money collected from license
endorsement fees to be placed in a general fund. The legislature
may, then, appropriate for grants to support enforcement programs
to decrease youths' access to tobacco. It creates the crime
relating to the use of false identification for the purpose of
purchasing tobacco.
"[HB] 79 makes retailers accountable for sales of tobacco to
minors. However, obviously, the effect of this legislation, or any
enforcement legislation, will be minimal without the cooperation of
parents who enable illegal behavior and without the cooperation of
enforcement officials, which has certainly been discussed before."
Number 0921
REPRESENTATIVE CROFT requested an explanation of the vending
machine provision, suggesting it is not an outright ban but a
restriction on where a vending machine can be placed.
REPRESENTATIVE BUNDE replied, "It is. And for the exact location,
it has to be more than 10 feet from the door and where they can be
supervised by people working in the store, ... as long as it's
physically possible. That exception was for the small rural
outlets where there may not be 10 feet from front to back."
Number 0960
PATRICIA SWENSON, Legislative Assistant to Representative Con
Bunde, explained that a vending machine must be placed at least 10
feet away from an entrance or an exit to a premises that the public
may use. She stated, "We didn't do a specific rural exception.
When we first started the bill, it was 25 feet from an entrance and
an exit, and that was thought to be too harsh because a lot of
buildings in Alaska are too small. So, we lowered it to 10 feet.
And it has to be placed in direct and continuous vision of an
adult, somebody to supervise it."
Number 0989
REPRESENTATIVE PORTER commented that currently, the law prohibits
vending machines except at a place that sells liquor or on private
property.
MS. SWENSON concurred.
Number 1003
REPRESENTATIVE JAMES asked whether this removed from the existing
statute the ability to have vending machines in break rooms.
MS. SWENSON explained that originally, they had placed a
restriction on the age of those who could be in a break room when
a vending machine was present. There was no longer that
restriction. The vending machine may be in the break room, but it
has to be supervised.
Number 1051
DELISA CULPEPPER, Alaska Public Health Association (APHA),
testified again via teleconference from Anchorage. She said
several parts of this bill relate to public health, including the
prohibition of sale of loose cigarettes. She noted that there are
places in Alaska, including Anchorage, where that is already
prohibited. She believes having a state law will help for
enforcement purposes. She said it is a lucrative practice, often
done in order to sell to minors because of the price.
MS. CULPEPPER stated support for the anti-preemption language; she
believes a local area should have the right to enact its own tax on
tobacco. The APHA is also pleased with provisions relating to the
FDA "under 27" requirements, as well as the establishment of
training standards for licensees and education of the merchants on
an ongoing basis, because there is a lot of turnover and the
employees need to be aware of the law.
MS. CULPEPPER concluded by encouraging a close look at this bill
for enforcement tools and keeping some of the good provisions,
which she believes are very strong.
Number 1134
JUDITH BENDERSKY testified again via teleconference from Anchorage,
noting the complexity of the issue. A public health educator, she
has traveled throughout Alaska, including to many rural areas. Ms.
Bendersky said as a teenager, she had started smoking one or two
cigarettes at a time. She stated, "If you go to just about any
village store and ask for a `loosie,' meaning a loose cigarette,
you may not see it from ... the customers' side of the cash
register, but there's usually a Styrofoam cup with the contents of
a cigarette package which has been opened. And you can usually buy
a `loosie' for 10 or 15 cents. And so, I very strongly support the
prohibition."
MS. BENDERSKY asked whether there was any prohibition of
distributing small amounts of chewing tobacco, which she described
as "a real scourge in rural Alaska."
MS. BENDERSKY concluded by saying there are strong points in this
bill. For example, she believes it is a good idea to have
merchants "count the costs, so to speak, of being licensed every
two years and having some merchant education in the form of
training standards." She stated that education is an "important
piece of this tobacco puzzle," as important as pricing. She
recommended somehow merging the high points of the three bills (HB
79, SSHB 189 and SSHB 159).
Number 1244
REPRESENTATIVE BUNDE responded that this was the first he had heard
of loose chewing tobacco being distributed and it boggles the mind.
This bill does not address that. He said further research could be
done if it seemed to be a significant concern.
LOIS IRWIN testified again via teleconference from Homer, saying
she supported what the previous speakers had said; those were some
of the major areas she would endorse, such as stopping the sale of
"loosies" and generally having better control. When asked, she
said she was talking about all three bills.
CHAIRMAN GREEN asked whether Ms. Irwin had any testimony on HB 79.
MS. IRWIN stated, "It's a good bill and I could certainly support
it."
Number 1359
ANNETTE MARLEY, Youth Project Coordinator, Trampling Tobacco,
Alaska Native Health Board, testified via teleconference from
Anchorage, specifying that she coordinates the "tobacco prevention
projects review" for the board. She thanked Representative Bunde
for being so responsive to public concern and opinion about tobacco
issues in Alaska, as reflected in this bill and HB 1, relating to
the tobacco tax increase.
MS. MARLEY said in her work at the board, she was involved with
numerous studies and reports prepared by researchers and expert
panels on how to best reduce the rates of nicotine addiction among
youth. Her comments would reflect what she had learned from all
these sources, as well as from her own experience in Alaska.
Number 1404
MS. MARLEY said the most noteworthy provision of HB 79 allows youth
to participate with enforcement officials to carry out compliance
checks and sting operations to crack down on merchants who sell
tobacco to minors. She believes it is definitely a step in the
right direction but should go further, requiring compliance checks
and ensuring funds for enforcement. Ms. Marley said studies show
that without vigorous and ongoing enforcement of youth access laws,
many stores will continue to sell to minors; the youths will learn
which stores those are. As currently drafted, HB 79 will not fix
that problem.
MS. MARLEY said other provisions, which further restrict vending
machine locations, ban self-service displays of tobacco products
and prohibit sales of loose cigarettes, are "worthwhile steps to
change." However, the FDA regulations scheduled to take effect in
late August will do the same things, and she believes these
provisions in HB 79 will be redundant. Nonetheless, she said the
bill is not a bad idea and provides back-up for the FDA
regulations.
Number 1562
MS. MARLEY stated that the most important part of the bill with
which she disagrees is the penalty for youths convicted of
possession of tobacco. Studies indicate this is not an effective
way to reduce tobacco use by youth.
MS. MARLEY quoted from the Institute of Medicine's committee on
preventing nicotine addiction in children and youth, saying, "The
committee believes that penalizing minors is an unwise and
ineffective strategy. Criminal sanctions or delinquency
adjudications are grossly disproportionate to the seriousness of
the offense and would not be sought by prosecutors or imposed by
judges. Even if the offense was punishable with a civil fine, like
a traffic ticket, the penalty would rarely be enforced. Indeed,
Alaska's existing youth possession law is rarely enforced. Calling
for tougher penalties is not likely to change that." The report
continued. Ms. Marley pointed out that the tobacco industry has no
problem with laws that punish kids.
MS. MARLEY concluded by saying there are many good things about
this bill that deserve serious consideration. Their one
significant concern is that it could be viewed by some legislators
as an alternative to the tobacco tax increase. She said it has
been proven that the tobacco tax works to prevent nicotine
addiction.
Number 1604
BRIANA WILLIAMS testified via teleconference from Anchorage. An
eleventh-grader at Dimond High School, she has participated in a
program that teaches grade school children about the dangers of
tobacco and the ways in which tobacco companies target youth. They
had studied how to discourage youths from using tobacco and how to
make access to cigarettes and "chew" more difficult for them.
MS. WILLIAMS believes one effective aspect of the bill would be
keeping all cigarettes and chewing tobacco behind the counter where
only the clerks would have access, thereby eliminating shoplifting
and requiring more "guts" for underage persons to specifically ask
for cigarettes. However, she was unsure whether increasing the
fines for either youths or those selling tobacco products would be
effective. Right now, the laws are not being enforced. Until
there is some way of enforcing such laws, she does not see how
increasing the penalties will have any effect, as kids and adults
ignore laws when they know they will never get caught.
MS. WILLIAMS said her group had carefully studied the tobacco tax
increase. They had concluded that to reduce smoking by teenagers,
it was most important to increase the tobacco tax.
Number 1699
JAY HERMANSON, American Lung Association of Alaska, testified via
teleconference from Anchorage. He said HB 79 looks comprehensively
at the problems, an approach his association appreciates. He noted
that HB 79 brings Alaska into alignment with some of the FDA
regulations designed to reduce easy access to tobacco by children,
such as the elimination of so-called "loosies," which are single
cigarettes, and "kiddie packs," which are packages of less than 20
cigarettes. His association strongly supports these measures.
MR. HERMANSON said HB 79 takes a step in the right direction in
Section 3, which specifically allows minors to work with police
officers in conducting compliance checks on tobacco retailers.
However, there is still a lack of dedicated law enforcement
resources and a standardized program of compliance checks to
effectively enforce the tobacco sales law. Without such
encouragement from policy-makers, he is concerned that the stricter
penalties for violators will never be implemented.
Number 1811
REPRESENTATIVE BUNDE pointed out that HB 79 has a positive fiscal
note. It will generate income that will be used for educational
purposes and compliance. He noted that the clerks will have to
take various classes to ensure that they understand the law and how
to comply with it. "So, I think in viewing enforcement from that
angle, this bill does provide some money," he added.
Number 1843
MS. SWENSON advised members that this also allows excess funds to
be set aside and appropriated by the legislature for enforcement,
should the legislature wish to do so, and it encourages that. The
positive fiscal note is for 181.2 thousand dollars.
Number 1878
RUTH PARRIOTT, American Cancer Society, again came forward to
testify, saying that sampling of "spit tobacco," a common practice
across the country at sporting events, will be covered by the FDA
regulations going into effect in August. Usually such samples are
given away for free, because the tobacco is too hard to split up in
a store and sell for 25 cents.
MS. PARRIOTT said that once again, the American Cancer Society
would support the prohibition on "loosies" and "kiddie packs," as
well as elimination of self-service displays and the requirement
for identification if the purchaser looks younger than 27. "All
those things would bring us into compliance with FDA," she added.
MS. PARRIOTT pointed out that in the vending machine restrictions,
the FDA goes further, not allowing them in private work places.
She said it may be necessary, as of August of this year, "to come
into compliance, in terms of the state of Alaska."
Number 1955
MS. PARRIOTT suggested that instead of the wording, "may be
appropriated to municipal law enforcement" for license fees, that
there should be a direct turnaround to municipal law enforcement.
CHAIRMAN GREEN replied that although it was a great idea,
unfortunately, they could not do that.
MS. PARRIOTT responded that "may be" with a strong recommendation
would be good. Although studies show that youth access to tobacco
really is limited when local law enforcement gets involved, that
enforcement doesn't occur without money.
Number 1993
REPRESENTATIVE JAMES said this allows localities to impose a tax.
She asked whether that would be of any benefit.
MS. PARRIOTT said that would increase the price of tobacco and
encourage enforcement at the local level, which would be a win/win
situation, assuming it would not eliminate the movement towards a
state tax.
Number 2051
LOREN JONES, Director, Division of Alcoholism and Drug Abuse,
Department of Health and Social Services, again came forward,
stating that he did not want to repeat his testimony and therefore
would say "ditto" to much of his testimony on SSHB 189.
MR. JONES encouraged the committee to look closely at the three
bills (HB 79, SSHB 189 and SSHB 159), stating that the issue is
important and complex. There are different ways to deter use and
to ensure enforcement; these bills take different tactics to
somewhat get to the same place.
MR. JONES stated, "Representative Porter's amendment on one
section, in another bill, that whole section's repealed and
reenacted. Both bills set aside revenues for enforcement, but the
revenue sources are different places. Neither bill directly says
to an agency, `You will use this money,' or, `You will be the ones
that will try to do the enforcement,' or, `You are the ones that
will take this money and put together a program.' I think that the
committee should look closely at who they might think is the
appropriate agency to do that."
MR. JONES continued, "To have a credible enforcement effort, you
need to have some person or agency that's in charge. And I would
just encourage you to consider the testimony given today, and to
consider these three bills, and to look at those conflicting and
try to come out with ... the best we can, if it's your desire to do
so."
Number 2193
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development (DCED), explained
that her division issues the business licenses to which tobacco
endorsements are attached for tobacco sales, mentioned during
testimony on SSHB 189. She pointed out that the division's fiscal
note showed increased revenue from raising the fee from $25 to $100
for tobacco endorsements.
MS. REARDON explained that there would be a much larger revenue
increase than under SSHB 159 because each retail establishment is
required to have a separate endorsement under HB 79. Currently, a
person obtains one business license for all of his or her
establishments in the state. For example, all 7-Elevens in Alaska
would have one business license and one tobacco endorsement. Under
HB 79, each one would require a separate tobacco endorsement and a
fee of $100. Therefore, more revenue would come in. "That's why,
of all the bills, this is the only one that generates revenue for
use in enforcement," Ms. Reardon added.
Number 2280
MS. REARDON read from page 9, beginning at line 8 of CSHB 79(STA),
subsection (b). She noted that "money collected by the department"
refers to the DCED. She said she understood that the intention is
to make grants to local law enforcement, for example, depending on
what the legislature did.
MS. REARDON said the fiscal note is not a large amount of money,
around $100,000. Referring to earlier testimony, she said it
doesn't matter what the punishment is if no one is ever convicted,
which has been the situation thus far.
MS. REARDON noted that under current law, if a person is convicted,
the DCED is supposed to take away that person's tobacco endorsement
for a set amount of time. She stated, "We have never taken away
the tobacco endorsement because no one has ever been convicted. ...
And unless there's some enforcement money, I don't think anyone's
going to be convicted."
MS. REARDON pointed out that if there were convictions and she
started taking away tobacco endorsements, there is currently no
enforcement staff within her division to do that, because to date,
the purpose of the tobacco endorsement has been revenue-raising,
just bringing in money for the general fund.
MS. REARDON explained, "We have never gone out and charged anyone
with a misdemeanor for selling tobacco without an endorsement or,
for that matter, for operating a business without a business
license, because all we do is we write to someone and say, `Give us
$50 for the business license or give us $25 for the tobacco
endorsement; you're breaking the law.' And when that's all that's
at stake, generally they pony up. And is it worth it, if they
don't, to go to court for twenty-five dollars' gain to the state?"
TAPE 97-69, SIDE A
Number 0006
[begins mid-speech]
MS. REARDON said, "... and they aren't represented here at the
table. If somehow money can get to them, I think that's where you
might see some reduction in ... youth access to tobacco."
MS. REARDON stated, "Under this bill, the Division of Occupational
Licensing is also responsible for conducting the courses for
tobacco endorsees in how to legally sell tobacco. The intention
that the fiscal note is based on is that we would do this through
a correspondence system, much like qualifying to be a notary
public. We send you the booklet explaining the laws; you fill out
the test in the back and mail it in."
MS. REARDON explained that they would not conduct workshops all
over the state because of the cost. However, she believes there
will be a positive effect from people having to take time to read
the booklet and answer questions regarding the law about selling
tobacco. The business license holder would complete the test. For
a department store chain, for example, the owners would be expected
to do it.
MS. REARDON expressed appreciation for the willingness of
Representative Bunde and his staff to work with the division to
adjust the bill so that it would work as efficiently as possible
for them.
Number 0132
MS. REARDON said one last strength of this bill is that it
eliminates the necessity for a second hearing if a person is
convicted of selling tobacco to a minor. Once the DCED learns of
such a conviction, they must automatically suspend that person's
tobacco endorsement, without a second due-process hearing. She
explained, "That is why you don't see the same costs for hearings
that you see in House Bill 159. And also, I think it will be a
more certain and rapid reaction, which I think will be pleasing to
everyone."
MS. REARDON concluded, "From the parts that affect the division,
it's the strongest of the three bills."
Number 0221
REPRESENTATIVE PORTER stated his understanding that there would be
a "correspondence course" mailed to the business itself, which
would be responsible for applying it to their individual employees
and somehow verifying that to the division annually, for example.
MS. REARDON replied, "My understanding is that only the business
license holder has to complete the course. They'd then be
responsible, of course, for making sure that their employees don't
break the law."
REPRESENTATIVE PORTER read from page 8 of CSHB 79(STA), beginning
at line 26, and said he did not know whether specific wording
indicated that a person selling tobacco products must take this
course.
Number 0303
MS. CARPENETI responded that she thought that was what was
intended, by speaking with Ms. Reardon, although perhaps it did not
express it.
MS. REARDON said she had discussed it with Ms. Swenson; they had
felt confident that the definition of "persons engaged in the sale
of products containing tobacco" just referred to the business.
Number 0406
MS. CARPENETI pointed out that "person" is defined, at least in
this bill for purposes of AS 11.76, on page 4. She said it is
given the meaning in Title 11.
Number 0418
MS. REARDON referred to page 8, line 7, and responded that AS
43.70, under which this falls, refers to a person engaged in the
retail business of selling a tobacco product. She stated, "That's
that same person we were talking about. So, we thought that since
that meant the endorsee, every time it said `a person engaged,' it
was meaning that same person." She suggested if the bills were to
be held, perhaps they could get a better answer.
Number 0457
MS. SWENSON explained that the intention is that the retailer, the
owner of the shop itself, must take the course and be responsible
to get the information to all the other people.
Number 0520
CHAIRMAN GREEN asked whether there were other comments or questions
about HB 79.
CHAIRMAN GREEN assigned HB 79, SSHB 189 and SSHB 159 to a
subcommittee consisting of Representatives James, Bunde and
Berkowitz, to be chaired by Representative James. He asked that
they look at how the bills do or do not work together.
HB 232 - INDEPENDENT DIV. OF ADMIN. HEARINGS
Number 0582
CHAIRMAN GREEN announced the next item of business was House Bill
No. 232, "An Act establishing the independent division of
administrative hearings in the Department of Administration in
order to provide a source of independent administrative hearing
officers to preside in contested cases; relating to administrative
hearing officers; relating to contested case proceedings; and
providing for an effective date."
Number 0588
REPRESENTATIVE SCOTT OGAN, prime sponsor, discussed the branches of
government, suggesting all three powers of government have been
delegated to what he calls the fourth branch, the bureaucracy. He
stated, "They are the executive - we give them legislative powers
by allowing them to write law, which is administrative law or
regulation, and they also have judicial powers because they
adjudicate that regulation. And I think there's a lack of
separation of powers and a lack of impartial, fair hearings."
REPRESENTATIVE OGAN recounted how he had previously been on the big
game commercial services board, where they routinely had
administrative hearing findings placed before them, relating to a
guide who broke the regulations, for example. He had been
disturbed by the fact that they would pass a sometimes-very-serious
judgment against an individual, even revoking that person's
livelihood by permanently revoking a license, but that members were
not allowed to question that person or any witnesses. "We simply
read the findings of the hearing officer and either accepted them
or rejected them or modified them," he stated.
REPRESENTATIVE OGAN said once in the legislature, he decided to
look at that. He stated, "And we decided to try to break the
administrative adjudicators out of the administration, at least out
of the bureaucracy that they work for, and create a separate
division, under the Department of Administration, and get
professional hearing officers that would give a fair and impartial
hearing to these cases."
Number 0779
REPRESENTATIVE OGAN advised members that several other states have
done this. Modeled after legislation in a couple of different
states, this is a hybrid that he believes is a good model. He
asked Dave Stancliff to address technical aspects.
Number 0817
DAVID STANCLIFF, Legislative Administrative Assistant to
Representative Scott Ogan, reported that in exploring the
separation of the hearing functions of agencies, he had located two
administrative law judges (ALJs) from other states: Ed Felter from
Colorado, who would join them on teleconference shortly, and John
Hardwicke from Maryland.
MR. STANCLIFF advised members that Maryland has what is considered
to be the best model in any of the states. However, the model
before the committee was unanimously adopted by the American Bar
Association's House of Delegates and was "several notches beyond
that." Mr. Stancliff stated, "They're very excited that Alaska is
the first state to have that particular model."
MR. STANCLIFF said he had contacted Mark Boyer, Commissioner,
Department of Administration; Mike Abbott, the Governor's business
liaison; and Teresa Williams, Assistant Attorney General, Fair
Business Practices Section, Civil Division (Anchorage), Department
of Law. Mr. Stancliff stated, "The administration is intrigued
with this idea and has shown a willingness to work with this
committee and with the legislature."
Number 0876
MR. STANCLIFF referred to the "administrative tax law judge
concept" that Chairman Green had worked on in previous legislation.
He said the higher level of due process in fair hearings
accomplished in that effort can be extended in the bill before the
committee.
MR. STANCLIFF explained that there are two dimensions to this bill,
structure and flavor; he would explain the structure. Key points
that Representative Ogan had considered were whether legislators
should set the structure entirely apart or place it within the
administration and, if the latter, how deep within the
administration it should be. While some states have set the
structure into the judiciary, most have put it within the
administration.
MR. STANCLIFF stated, "After consulting with Commissioner Boyer,
Representative Ogan decided that this administration was willing to
work with the legislature, as they did with you, Mr. Chairman, and
that we should put it within the administration because, after all,
it does serve an administrative function. So, the independent
division was put, in this bill, in the Department of
Administration."
Number 0980
MR. STANCLIFF said that after considerable consultation with the
two out-of-state ALJs and review of written findings in law
journals, Representative Ogan decided to place final decision-
making authority within the administration. He explained, "And the
idea there was - and we discussed this with `Legal' - if it was
very autonomous, perhaps a recommendation-type approach would be
best. If it was deep within the administration, then perhaps final
decision-making authority would be a good balance there." Mr.
Stancliff suggested that Judge Felter could discuss other practical
and administrative advantages of the final decision-making
authority.
MR. STANCLIFF reported that other options, such as grandfathering
in present hearing officers, laterally transferring them into this
new structure, were included in this bill. Instead of the
legislature establishing a code of conduct in the bill, that
authority is given to the new chief administrative hearing officer.
Mr. Stancliff stated, "And also, rather than the governor appoint
someone, as they do in other states, by creating it ... at the
division level, this gives the commissioner, through the governor,
of course, the ability to appoint this person. All three of those
negotiable items were included, because to offset that was the
final decision authority, over on the right side of that balance."
MR. STANCLIFF said by keeping the hearing function as an integral
part of the administration, it will be more able to withstand any
constitutional challenges. He advised members that committee
packets contained a memorandum from Legislative Legal and Research
Services, which states that it is the legislature's prerogative to
decided where in the administrative/executive branch of government
the adjudication decisions will be made. He commented, "You can't
transfer it away from them. But you can explain ... at what level
you want them to be made."
Number 1091
MR. STANCLIFF said the Maryland courts had found that their
legislature was fully able to delegate adjudicative powers. He
stated that another power that HB 232 gives solely to the executive
is the option of the chief officer to adopt an official code of
conduct. In this bill, however, it suggests that the code be based
on those sections of judicial canon applicable to conflicts of
interest, fairness and impartiality.
MR. STANCLIFF explained that Legislative Legal and Research
Services personnel had been unsure what hearings the independent
division would handle; they had suggested that the cleanest and
most efficient place to start was those already listed under the
Administrative Procedure Act (APA) section of the statute. Mr.
Stancliff noted that other legislatures "have deemed that those
folks should fall under APA procedure." He indicated although the
list could be broadened, that was probably the most logical place
to start, in an expansion of the effort begun last year.
MR. STANCLIFF indicated that Mr. Felter's experience has shown that
once this new structure is up and running, administrators soon
avail themselves of it. Of the 18 states that have adopted the
central panels or this separation of powers, not one has repealed
the law. And in every state, money and time have been saved. Mr.
Stancliff said that Judge Felter's division receives a public
approval rating of better than 97 percent for judges and 96 percent
for staff. He concluded by saying the independent panels sell
themselves.
Number 1208
EDWIN L. FELTER, JR., Director and Chief Administrative Law Judge,
Division of Administrative Hearings, testified via teleconference
from Colorado, saying he had helped Hawaii in 1990 with its central
panel and had held his current position in Colorado for 14 years.
He had shepherded the model act, mentioned by Mr. Stancliff,
through the House of Delegates from its beginnings. He had also
shepherded the model code of judicial conduct for state ALJs
through the National Conference of Administrative Law Judges. He
stated, "But in dealing with Representative Scott Ogan's office, I
really believe that Alaska is ready to adopt a central panel model
and to do it for good government reasons."
JUDGE FELTER said there are two reasons why central panels come
into existence. Usually, it is because of a scandal or perceived
conflict of interest. However, more recently they have come into
existence for good government reasons, because everyone believes
there is more accountability to the citizens.
JUDGE FELTER said a central panel's primary product is fairness.
He believes that in Colorado and all other states with central
panels, citizens and industry groups perceive them as fair. Other
important products are a high degree of professionalism in
adjudication, efficiency, and dignified adjudications, to which he
believes citizens are entitled.
Number 1345
JUDGE FELTER said he would outline why legislatures and
administrations alike support central panels and why they make
sense in terms of economics and adjudications. He would also try
to dispel the myth of agency expertise and share a bit of
Colorado's experience, in addition to making two or three
recommendations on funding and how the administration of the panels
is set up.
JUDGE FELTER explained that legislatures and administrations like
central panels because of public perception; the panels are
apolitical and provide high-quality due process to citizens. "It's
really a citizen focus," he explained. "That's one of our by-
words, `citizen-focused service.' We're accountable for fairness
and efficiency in adjudications only, not in anything else. One of
the cornerstones of an effective central panel is that there's
decisional independence yet there's accountability to the public."
JUDGE FELTER noted that Maryland has a large central panel; much of
their work is motor vehicle hearings, but they handle other areas
such as licensing boards. He explained, "Before the central panel,
the budget for all the administrative adjudication was $6.8
million; that was 1989. It went up temporarily, but by 1993,
inflation and all, it was a $6.7-million budget. So, it's proven
to be cost-effective."
Number 1412
JUDGE FELTER continued, "Why it makes adjudication sense, in terms
of perceptions of fairness and actual fairness, is central panel
hearing officers or ALJs really are not susceptible to unwritten or
in-house policies that only the agency knows. Central panels force
agencies to adopt good rules because the agencies realize that the
primary obligation of the hearing officer or ALJ of the central
panel is to the statutes. If a rule conflicts, the ALJ has to go
with the statute, knock down the rule."
JUDGE FELTER indicated that losing favor at both federal and state
levels is the idea that hearing officers are needed in the agencies
because of agency expertise. He explained, "There are serious due
process problems with this approach, because how does a citizen
cross-examine some secret information or knowledge in the mind of
the so-called expert hearing officer for the agency?" He said the
primary thinking today is that expertise is best presented through
experts to a professional judge or professional adjudicator.
JUDGE FELTER continued, "Colorado experience, in brief: We came
into existence in 1976. ... Your mission statement looks a lot like
ours. It's to deliver high-quality ... and efficient adjudication
services to the citizen, with respect for the due process rights
and dignity of the citizens." He said prior to workers'
compensation reform in 1991, it took 11 months to get a hearing.
After the reform, they became efficient and were now providing
hearings within three months. He stated, "It took two months to
get a decision out before; we were doing it in about nine days
afterwards, on the average. And that is a finding of the
legislative audit committee."
JUDGE FELTER noted that Senator Bishop had praised them on the
senate floor in 1993 for reducing the backlog in workers'
compensation cases by 95 percent, providing hearings in at least
one-third of the time and providing decisions in 9.6 days.
Number 1554
JUDGE FELTER continued, "The private bar that represents citizens
that come before us in regulatory law has been one of our foremost
defenders. When agencies have come to appreciate the role we
provide for them, and that is being independent adjudicators, it
takes the monkey off their backs, where they can focus on rule-
making, investigating and prosecuting the cases, without worrying
about conflicts and nasty issues being raised on appeal to the
courts."
Number 1584
JUDGE FELTER said the chief and the hearing officers or ALJs need
some protections for their "decisional independence." The
personnel system offers protections and the model act builds
protections in. "It's not a good idea to have at-will ALJs," he
added. Noting that he himself is a civil servant, he said other
chiefs are appointed by the governor for a fixed term, with the
advice and consent of the senate. He suggested that ideally, the
best model is for the independent central panel and the executive,
at least the chief judge, to have the status of a cabinet officer,
if possible under the constitution. However, it is not possible
under Colorado's constitution, which limits principal departments
to 22. He himself is in the Department of General Support
Services, which is the most neutral department because it has no
adjudication business per se.
Number 1639
JUDGE FELTER continued, "Funding mechanism: We had the Oregon
plan, which is cash-funded. It's not the greatest thing in the
world when the central panel has to worry about revenue shortfalls,
when that's not really the principal mission. It's falling into
disfavor throughout the United States. Only two jurisdictions -
I'm kind of sad to say Colorado is one of them - still have the
Oregon plan." He indicated Colorado would be going to another
system as well, a modified general fund model, `modified' because
Colorado has sources of funds other than general funds, such as
licensing fees and others.
Number 1678
JUDGE FELTER concluded by suggesting if Alaska has a shot at the
ideal central panel, that is the best way to do it. It takes
agencies out of the adjudication business and puts them where they
are more effective for the citizens, in the areas of rule-making,
investigations, prosecutions and enforcement.
Number 1704
CHAIRMAN GREEN asked, "How many ALJs do you have and how many
cases, roughly, a year?"
JUDGE FELTER replied that they have 17 ALJs statewide, with
regional offices in Grand Junction, Fort Collins and Colorado
Springs. For '95-'96, based on three-fourths of the fiscal year,
there were 6,967 hearings for 13,596 docketed cases, including
high-volume cases such as workers' compensation and human services
cases. There were 13,839 decisions rendered. Judge Felter said,
"One may ask why more decisions than cases docketed or hearings
held. The reason is, you can get three or four decisions in one
case. This is all done by, actually, 14.6 full-time employee
judges. We have some part-timers."
Number 1765
CHAIRMAN GREEN said that was a pretty hefty load, over 1,000 per
judge.
JUDGE FELTER agreed but said it is "sort of apples and oranges."
He offered to break it down.
Number 1774
CHAIRMAN GREEN indicated that was unnecessary. With Alaska being
far less populated than Colorado, he stated concern that
establishing a pool of judges might be cost-prohibitive. He
mentioned a statute passed the previous year having to do with
taxation appeals; rather than having a pool, there was a different
avenue to establish the ALJ under that statute. He suggested that
with as many ALJs as Colorado has, there would be no problem with
recusals.
CHAIRMAN GREEN asked whether there is a delay in bringing an ALJ up
to speed on intricate cases.
JUDGE FELTER said no, because they actually have more expertise,
even in esoteric areas, than judicial branch judges have. He said
administrative law is a limited area. They have sections for
workers' compensation, regulatory law and human services. He
stated, "The regulatory law section demands a high degree of
expertise, which all our judges have; it's just through experience
and training, a medical board, for instance, transportation, in
water quality. No, there's no delay at all." He added that they
also must hire "hit-the-deck-running types."
Number 1871
CHAIRMAN GREEN, referring again to the previous year's legislation,
responded, "We kind of hit a snag with ours because Alaska's a
little bit unique, having to do with tax cases. We have relatively
few, but they're magnificent in size. And so, it required,
perhaps, especially there, to get into really some of the very
strange nuances and tracking crude [oil] price around the world and
so on and so forth. It appears that in a state like Colorado or a
more populous state that you would be covering far more cases, but
perhaps not any in such intricate detail."
JUDGE FELTER replied, "Oh, we do. There are some cases that we do
that are in intricate detail, and we have not had a problem." He
said the detriments of having an in-house specialist who may be
perceived to be too cozy with the agency are outweighed by the
benefits of the perception, by both sides, of having a fair and
impartial process; the only way to get that is by having a judge
who is outside of the agency.
JUDGE FELTER restated that they have had no problems, although they
handle some fairly esoteric, specialized cases. He explained, "The
way to do that is you zone in, if you have a broad array of talent.
And you have to have a smaller pool within the larger pool that is
equipped to hit the deck running on these highly specialized,
technical, high-profile cases."
Number 1939
REPRESENTATIVE CROFT noted that scattered through Alaska's statutes
are a number of "special structure" hearing panels. For example,
the one for workers' compensation contains a labor representative,
a business representative and a neutral one. In addition, there
are a number of citizen panels. He asked whether this would cut a
swath through all of those, with all the different types of
adjudication being under one administrative law judge, for example,
who would or would not have a specialty.
JUDGE FELTER said that would depend on how broad they want it to
be. Under the model act, the governor or legislature is given the
prerogative of exempting certain agencies. Central panels differ.
For example, Colorado is one of only two states that has workers'
compensation in its central panel system.
JUDGE FELTER cited another example, saying Colorado had replaced
its industrial commission with an industrial claim appeals panel,
which contains lawyers with five years' experience, like the ALJs,
who are classified as ALJs in the personnel system. "And it's
worked," Judge Felter said. "The perceptions are a lot better now.
Adjudication is one thing. You lose? You appeal on up into the
courts, all the way to the supreme court, if necessary." He
restated that the structure depends on what the legislature wants
the central panel to do, adding, "And you can leave windows of time
to bring them in or exempt them out."
Number 2021
REPRESENTATIVE CROFT asked what Colorado exempts.
JUDGE FELTER provided examples. The public utilities commission is
exempted; they are at the same level as Judge Felter's agency. He
stated, "The personnel board has ALJs who are at the same level as
we are, and they're within our department but then those ALJs are
accountable to the personnel board. Then we have unemployment
insurance appeals referees, who are at a different level than we
are; they're at a lower level. They're within the department of
labor and employment. And we have the motor vehicles hearings
officers; that's drivers' licenses. They're at a lower level.
They were exempted out."
JUDGE FELTER concluded that there is no total, all-encompassing
central panel anywhere. There are always some exemptions.
Number 2066
REPRESENTATIVE OGAN thanked Judge Felter for his time. He asked
what the budget is for his agency.
JUDGE FELTER said right now, it is $2.8 million per year. They had
been able to demonstrate efficiency by analyzing costs per case.
Number 2092
REPRESENTATIVE OGAN advised the committee that more than $6 million
in adjudication costs had been identified for the state of Alaska,
for an estimated 3,500 to 4,000 cases per year.
CHAIRMAN GREEN thanked Judge Felter for his testimony.
JUDGE FELTER replied, "My pleasure. Hope I can come up there some
time and help you out with your new central panel, if you go that
way."
Number 2142
NANCY WELLER, Medical Assistance Administrator, Division of Medical
Assistance, Department of Health and Social Services, came forward
to testify. She stated, "We have one hearing officer in the
Department of Health and Social Services whose appeals come under
the Administrative Procedure Act, and that's the hearing officer
who hears to rate-setting and audit appeals for the Medicaid Rate
Advisory Commission. And the advisory commission sets rates for
the health care facilities that Medicaid pays; it's about 50
percent of our budget. So, there is a great deal of money at risk
for those hearings."
MS. WELLER said the department has concerns because the rate-
setting process is so complex and practically requires that a
person be an accountant and be able to read cost reports in order
to understand it. Therefore, they are concerned about how a judge
would be picked.
MS. WELLER said their other concern is that the centralization of
functions in the Department of Administration have not always gone
incredibly well, in the perception of the other departments. For
example, functions have been delegated back to departments because
they are better able to do those functions themselves.
Number 2213
CHAIRMAN GREEN asked what the process is now. He asked whether an
appeal would go to the ALJ or whether a case would go directly to
the ALJ.
MS. WELLER replied, "We have a hearing officer who hears the rate
appeals. They go to that hearing officer, and then they go to
court."
CHAIRMAN GREEN said the ALJ, then, would be the hearing officer.
He asked whether that would be the first appeal.
MS. WELLER said yes.
CHAIRMAN GREEN asked, when it went to court, whether it would be de
novo or whether the de novo would be "a one-shot deal to the ALJ."
MS. WELLER said she was not sure.
Number 2249
REPRESENTATIVE PORTER asked whether the hearing officer would be
hearing cases appealed from decisions of the commissioner.
CHAIRMAN GREEN said he was likewise wondering if it was the first
or second appeal.
MS. WELLER said she did not believe that the commissioner of the
Department of Health and Social Services had ever been involved in
the hearing decisions.
REPRESENTATIVE PORTER asked whether it was not a department
decision that was being contested.
MS. WELLER said that the Medicaid Rate Advisory Commission
determines the rates. It would be that commission's decision that
would be appealed.
REPRESENTATIVE PORTER asked whether the further appeal from that
would be to superior court. (There was no audible response.)
Number 2282
CHAIRMAN GREEN said, "So, you're not sure whether by having that
intermediate hearing -- that's actually the first appeal, so that
the superior court still could, then, have a de novo hearing, in
your case."
MS. WELLER replied, "I'm assuming that the process would not
change, only the position would be relocated from our (indisc.--
simultaneous speech)."
CHAIRMAN GREEN explained that he was honing in on this because it
was one problem with the tax issue he had mentioned relating to
previous legislation.
Number 2316
REPRESENTATIVE JAMES said she had arrived late and missed part of
the presentation but was fairly familiar with the bill. As to the
arguments that what they are doing works fine and that it is so
complicated that no one else can do it, Representative James said
she did not like those two reasons. Saying she would have to
review the statute, she asked whether the hearing officer was a
"sit-in" for the commissioner, with the commissioner actually
making the decision, or whether the statute specified that it goes
to this person for the appeal of rate-setting decisions.
MS. WELLER replied, "The hearing officer hears the appeals and they
are signed off `approved' by the commissioner."
Number 2384
CHAIRMAN GREEN asked whether it was provided in HB 232 that the
right of de novo was at the superior court level or in the purview
of the hearing officer/ALJ.
MR. STANCLIFF replied that the issue had not been raised and
therefore was not in the bill. He suggested that the committee may
want to look at Chairman Green's experience along those lines.
CHAIRMAN GREEN asked whether a fiscal note would be prepared,
noting that he saw in the packets "some costs having to do with
other appeals."
MR. STANCLIFF answered that the agencies were trying to assess what
the costs may be, which will be based on the ultimate direction
taken by the committee. He said there were two fiscal notes, but
they were how-do-we-calculate-this types.
Number 2440
CHAIRMAN GREEN stated concern that with a low number of cases, they
may end up with a pool of highly-qualified people who may not be
utilized fully. There was a potential waste of money because these
hearing officers would be fairly expensive.
MR. STANCLIFF agreed and said the model act requires cross-
training.
TAPE 97-69, SIDE B
Number 0006
MR. STANCLIFF stated that cross-training is an absolute necessity,
which is why the bill includes requirements for additional
training. He said Mr. Felter's division has accomplished that
well.
Number 0021
REPRESENTATIVE OGAN referred to the fiscal note question and said
they had a difficult time even identifying through Legislative
Research the approximately $6 million of costs. He stated, "They
didn't get all the information from all the agencies. And I don't
think anybody's ever quantified the exact costs of administrative
hearings." He suggested that will be a valuable exercise with this
legislation.
Number 0041
REPRESENTATIVE JAMES asked Representative Ogan: Under HB 232, if
an administrative hearing was heard by this panel and a person was
unhappy with the result, would there be binding arbitration or some
other appeal provided before that person could go to court?
REPRESENTATIVE OGAN replied that a clause allows the administrative
hearing officer to have people seek other forms of mediation or
dispute resolution before going to the hearing officer. However,
the hearing officer will have the final say. "So, it's appealed to
the superior court," he added.
Number 0082
REPRESENTATIVE JAMES said she was a little confused. She asked
whether this panel would provide a formal appeal following an
administrative appeal if there was a problem, or whether the
regular administrative appeal itself would go through the panel.
MR. STANCLIFF replied, "The regular administrative appeal."
Number 0106
REPRESENTATIVE JAMES asked, "Do you know whether their going to
court is an original appeal or whether it's appealing the decision
of the commissioner, in which case they would have to provide the
information that the commissioner used ... to base their decision
on. In other words, is it de novo? Do they start all over ... or
do they appeal the decision?"
Number 0135
MR. STANCLIFF replied that under the bill, if a person appeals a
regulation, the commissioner would request a hearing officer and an
ALJ or hearing officer would be assigned, whose decision would be
final. The only appeal beyond that would be to the courts. Mr.
Stancliff stated, "And that first appeal would be considered that
first decision of record. And then the docket is shipped to the
court for final review."
REPRESENTATIVE JAMES said it would not be a de novo trial, then.
CHAIRMAN GREEN asked, "Unless the court so chose?"
Number 0161
MR. STANCLIFF explained, "There is a provision in the bill, if the
court remands it back, and, as they can now, under administrative
law, there is a provision for the hearing officer to handle that.
The committee should also know that the long list of people who
aren't included in this bill, the commissioners can, as an option,
use the agency. They can also say to the agency, `You have final
decision-making authority.' They don't necessarily have to say
that. In that case, ... if they don't agree with the decision,
then the commissioner can take it under review, unless they've
given final decision authority. So, there's an option for people
to start using the agency, even though they're not included on the
mandatory list, as set out under the APA."
Number 0189
REPRESENTATIVE JAMES said she understood the theory because it is
one she has pursued for a long time from another angle. She
suggested that when those who write the regulations also enforce
them and determine the appeals, it resembles tyranny. This would
remove the appeals, so they would be conducted separately.
However, she needed to study the bill further to see how it would
physically work.
Number 0223
REPRESENTATIVE CROFT said he would also like to study the bill
more. He asked how it differs from the model upon which it was
based, whether it was from the American Bar Association, Maryland
or Colorado. He noted that there was a lot of overlap.
Number 0240
REPRESENTATIVE OGAN said other states had found that when a case is
adjudicated before an independent hearing officer, it tends to be
done a little more carefully. He speculated that agencies, in
hearing their own regulations in-house and answering to that
commissioner, know that the appeal may be before the same hearing
officer. Under the proposed system, other states have found that
less administrative problems spill over into superior court because
the job is being done better and more impartially.
REPRESENTATIVE JAMES suggested that from an open, unbiased
perspective, one could better see whether it was the writing of the
regulation or the enforcement that was flawed. Pride of authorship
in that process, on the other hand, created a problem of separating
those issues. She noted that the appeal is where the decisions are
made. She emphasized that she supports that kind of separation if
it is possible and financially feasible.
CHAIRMAN GREEN announced that before hearing from David Cruz via
teleconference, they would take up another matter.
CONFIRMATION HEARING ON GOVERNOR'S APPOINTMENT TO:
Violent Crimes Compensation Board
Number 0347
CHAIRMAN GREEN said that while they had a quorum, he wanted to hear
from Leslie Wheeler regarding her appointment to the Violent Crimes
Compensation Board. He advised Ms. Wheeler that the committee had
read her dossier. He asked whether she wished to make any
statements.
LESLIE B. WHEELER testified briefly via teleconference, saying she
has worked with domestic violence and sexual assault victims for
over 20 years and has served on the Violent Crimes Compensation
Board as an interim appointee for about a year. "I think it's
extremely important work, and I'm happy to be involved in it," she
concluded. She offered to answer questions.
CHAIRMAN GREEN asked if there were questions, then thanked her.
Number 0393
REPRESENTATIVE PORTER made a motion that the committee forward
Leslie Wheeler's name to the full body for consideration of her
appointment to the Violent Crimes Compensation Board. There being
no objection, it was so ordered.
HB 232 - INDEPENDENT DIV. OF ADMIN. HEARINGS
CHAIRMAN GREEN again brought HB 232 before the committee and called
upon David Cruz to testify.
Number 0408
DAVID CRUZ testified via teleconference, saying he is one of the
owners of Cruz Construction, Incorporated, a general contractor
with a specialty in clearing land.
MR. CRUZ recounted how he had been involved with the hearing
procedure under the Department of Labor. His company was the
successful subcontractor for clearing the right-of-way for a
highway, a large project for the Department of Transportation and
Public Facilities (DOT/PF). A provision in their specifications
said that all timber became the possession of the contractor, for
sale and removal.
MR. CRUZ reported that they had sold the wood, of salvage value, to
a sawmill operator for one dollar. Mr. Cruz's company did the
clearing and got the wood to the side of the road. The sawmill
operator picked up what he wanted. Mr. Cruz noted that the sawmill
operator was not required by the DOT/PF to be a subcontractor.
MR. CRUZ explained that one of the sawmill operator's employees
filed a labor claim against the operator. The Department of Labor
came out and investigated, questioning Mr. Cruz and people working
for both him and the sawmill owner; they then ruled that the work
for which the wood had been purchased was subject to Davis-Bacon
wage requirements.
MR. CRUZ pointed out that he'd had the option of burning the wood
by the side of the highway but had chosen to salvage it out of good
stewardship.
MR. CRUZ said they went through the process with the hearing
officer, the investigator. He stated, "He's not a lawyer; neither
am I. He cited some cases that had no relevance to what went on to
the job here." Mr. Cruz indicated although the claim was not
against him, he was working with the sawmill operator, who couldn't
get anywhere. Speaking of the hearing officer, he said, "This guy
was just jury and executioner. We did not have an appeal process
with anybody else other than him. He made his ruling; we had to
appeal back to him."
MR. CRUZ believed that if they had gone to an unbiased third party
who could look at whether a contract issued to the DOT/PF required
a subcontract, the person who bought the wood would have had his
eyes opened and there wouldn't have been any question about the
Davis-Bacon wage rates. Mr. Cruz stated, "This was never done.
And so, we were just basically railroaded into it. It was not
enough money to sue for. It was $7,000. And so, we couldn't go to
... a court for that kind of dollars."
Number 0549
MR. CRUZ said the sawmill operator could not pay the wage claim and
therefore the Department of Labor issued an order to the DOT/PF to
retain it from Mr. Cruz's contract; it cost Mr. Cruz $7,000. He
believed that had there been a process by which he could appeal to
an impartial board or judge, the outcome would have been different.
Mr. Cruz concluded by stating he was fully supportive of HB 232.
Number 0581
REPRESENTATIVE JAMES asked the sponsor where in this process the
hearing officer being considered under HB 232 would fit in.
Specifically, would be in appealing the decision of the person from
the Department of Labor who investigated on-site?
Number 0621
MR. STANCLIFF said that was correct. The decision would have come
down; the contractor would have taken issue with the decision; and
theoretically, the hearing officer under this scenario would have
been involved.
MR. STANCLIFF advised members that he had been present at that
first hearing. He said, "I also want to state for the record that
I was there when the person from the Department of Labor suggested,
in no uncertain terms, that the two people, Mr. Cruz and Mr. Bell
(ph), should tone down their rhetoric or other activities that they
were involved in would be looked into. And ... the Labor person
did that knowing fully well who I was, as a staff person for our
representative at the time. I was shocked."
Number 0670
REPRESENTATIVE JAMES mentioned delineating where the complaint was.
She asked: If the employee complained that the sawmill operator
was not paying him, did that employee ever, in this procedure, say
that he was working for the contractor that had the contract with
the DOT/PF? She noted that the contractor ended up paying.
MR. STANCLIFF said that was part of the problem. He explained,
"The wood was, in fact, by contract, the private possession of the
subcontractor. The person he sold it to was not ... any part of
the contract. But because they saw an opportunity to perhaps
exploit, in my opinion, they filed a grievance for Davis-Bacon
wages." He said under HB 232, the department would have made an
initial finding and then the contractor would have appealed it to
an independent hearing officer.
Number 0720
CHAIRMAN GREEN suggested that, with the exception that there may be
arbitration or some form of mediation before it would go to the
ALJ, there would be only the one review within a particular
department.
MR. STANCLIFF affirmed that and said there is an encouragement
within the bill to use alternative dispute resolution, if possible,
before it gets to that level.
Number 0742
REPRESENTATIVE JAMES said, using this case as an example, that it
is not one internal review but rather one internal decision; the
appeal of that decision would go directly to this group. She added
that there is nothing to dispute until there has been a decision.
CHAIRMAN GREEN said as he understood it, it would have been
reviewed internally and then would have gone to the ALJ.
REPRESENTATIVE JAMES said her question was whether they would have
had that review under this bill. "And they said no," she stated,
adding that the decision would have gone directly to the panel.
Number 0775
CHAIRMAN GREEN expressed concern about where the internal appeal
would be, other than perhaps some sort of dispute resolution prior
to going to the ALJ.
REPRESENTATIVE OGAN responded, "I think it's up to the discretion
of the administrative law judge where that might be. And I'm not
sure how the other states work." He added that he would doubt that
an ALJ would threaten someone who contested a case with looking
into more cases.
Number 0807
CHAIRMAN GREEN announced that because there were unanswered
questions and they needed to digest the information, the committee
would hold HB 232 over.
ADJOURNMENT
Number 0824
CHAIRMAN GREEN adjourned the House Judiciary Standing Committee
meeting at 4:35 p.m.
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