Legislature(2003 - 2004)

02/02/2004 03:25 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                        February 2, 2004                                                                                        
                           3:25 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Tom Anderson, Chair                                                                                              
Representative Carl Gatto, Vice Chair                                                                                           
Representative Nancy Dahlstrom                                                                                                  
Representative Bob Lynn                                                                                                         
Representative Norman Rokeberg                                                                                                  
Representative Harry Crawford                                                                                                   
Representative David Guttenberg                                                                                                 
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 282                                                                                                              
"An Act  relating to contracts  between the University  of Alaska                                                               
and  its employees  involving research  or  other development  of                                                               
intellectual property  and to the  authority of the  president of                                                               
the  University  of  Alaska   regarding  employee  contracts  for                                                               
development of intellectual property."                                                                                          
     - MOVED HB 282 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 339                                                                                                              
"An Act relating  to negative option plans for  sales, to charges                                                               
for goods or services after a  trial period, and to acts that are                                                               
unlawful as unfair trade practices."                                                                                            
     - MOVED CSHB 339(L&C) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 367                                                                                                              
"An Act relating to the  licensing and regulation of sex-oriented                                                               
businesses  and sex-oriented  business entertainers;  relating to                                                               
protection of the safety and health  of and to education of young                                                               
persons who  perform in  adult entertainment  establishments; and                                                               
providing for an effective date."                                                                                               
     - MOVED CSHB 367(L&C) OUT OF COMMITTEE                                                                                     
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 282                                                                                                                  
SHORT TITLE: UNIVERSITY EMPLOYEE RESEARCH CONTRACTS                                                                             
SPONSOR(S): REPRESENTATIVE(S) FATE                                                                                              
04/23/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/23/03       (H)       HES, L&C                                                                                               
05/15/03       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
05/15/03       (H)       Scheduled But Not Heard                                                                                
01/22/04       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
01/22/04       (H)       Moved Out of Committee                                                                                 
01/22/04       (H)       MINUTE(HES)                                                                                            
01/23/04       (H)       HES RPT 3DP 1NR                                                                                        
01/23/04       (H)       DP: CISSNA, SEATON, WILSON; NR: GATTO                                                                  
02/02/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
BILL: HB 339                                                                                                                  
SHORT TITLE: TRADE PRACTICES                                                                                                    
SPONSOR(S): REPRESENTATIVE(S) MEYER                                                                                             
01/12/04       (H)       PREFILE RELEASED 1/2/04                                                                                
01/12/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/12/04       (H)       L&C, JUD                                                                                               
02/02/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
BILL: HB 367                                                                                                                  
SHORT TITLE: LICENSING SEX-ORIENTED BUSINESSES                                                                                  
SPONSOR(S): REPRESENTATIVE(S) MCGUIRE, GARA                                                                                     
01/12/04       (H)       PREFILE RELEASED 1/9/04                                                                                
01/12/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/12/04       (H)       L&C, JUD, FIN                                                                                          
01/30/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
01/30/04       (H)       Heard & Held                                                                                           
01/30/04       (H)       MINUTE(L&C)                                                                                            
02/02/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
WITNESS REGISTER                                                                                                              
JIM POUND, Staff                                                                                                                
to Representative Hugh Fate                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented the sponsor statement for HB 282                                                                 
on behalf of Representative Fate.                                                                                               
REPRESENTATIVE KEVIN MEYER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as the sponsor of HB 339 and                                                                     
addressed changes in Version I.                                                                                                 
SUZANNE CUNNINGHAM, Staff                                                                                                       
to Representative Kevin Meyer                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During hearing on HB 339, answered question                                                                
about Version I.                                                                                                                
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General                                                                             
Commercial/Fair Business Section                                                                                                
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
POSITION STATEMENT:  Testified in support of HB 339 and answered                                                                
ANDREE McLEOD                                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 367.                                                                         
REPRESENTATIVE LESIL McGUIRE                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as one of the sponsors of HB 367.                                                                
KATHY HARTMAN, Co-Owner                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 367.                                                                         
CAROL HARTMAN, Co-Owner                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 367.                                                                         
REX BUTLER                                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified as a representative of Crazy                                                                     
Horse and Teasers clubs in opposition to HB 367.                                                                                
SHERMAN JONES                                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   As an  employee at Fantasies,  testified in                                                               
opposition to HB 367.                                                                                                           
JEANETTE JOHNSON, Owner                                                                                                         
Teasers and Crazy Horse                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 367.                                                                         
DOUG HARTMANN                                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Testified  in  opposition  to HB  367  and                                                               
offered his experience as a dancer and bouncer.                                                                                 
ACTION NARRATIVE                                                                                                              
TAPE 04-7, SIDE A                                                                                                             
Number 0001                                                                                                                     
CHAIR TOM ANDERSON  called the House Labor  and Commerce Standing                                                             
Committee  meeting  to  order  at   3:25  p.m.    Representatives                                                               
Anderson,  Dahlstrom, Lynn,  Rokeberg,  Crawford, and  Guttenberg                                                               
were present at the call  to order.  Representative Gatto arrived                                                               
as the meeting was in progress.                                                                                                 
HB 282-UNIVERSITY EMPLOYEE RESEARCH CONTRACTS                                                                                 
Number 0050                                                                                                                     
CHAIR ANDERSON announced  that the first order  of business would                                                               
be HOUSE BILL NO. 282, "An  Act relating to contracts between the                                                               
University  of Alaska  and its  employees  involving research  or                                                               
other development  of intellectual property and  to the authority                                                               
of the president  of the University of  Alaska regarding employee                                                               
contracts for development of intellectual property."                                                                            
Number 0100                                                                                                                     
JIM  POUND,  Staff  to Representative  Hugh  Fate,  Alaska  State                                                               
Legislature, presented  HB 282 on behalf  of Representative Fate,                                                               
sponsor.   He said  HB 282  allows the  university to  compete in                                                               
research and  development.  Across the  nation, many universities                                                               
have moved towards a research role  as a way of supplementing the                                                               
high cost of education.                                                                                                         
MR. POUND  said this valuable  research has been  responsible for                                                               
inventions, innovations, and supplementing  the high cost of that                                                               
education.    It  has  also produced  a  profit  by  coordinating                                                               
through  the  private  sector.   Because  of  lack  of  financial                                                               
incentives, however, based on the  Alaska Executive Branch Ethics                                                               
Act  [AS  39.52],  Alaska  isn't  allowed  to  participate.    He                                                               
paraphrased a portion of AS 39.52.010, which states in part:                                                                    
     Declaration   of  policy,   (A)  to   discourage  those                                                                    
     officers  from   acting  upon  personal   or  financial                                                                    
     interest   in   the   performance   of   their   public                                                                    
He then  paraphrased a portion  of AS 39.52.170, which  states in                                                               
     Outside employment  restricted.  (a) A  public employee                                                                    
     may  not  render  services to  benefit  a  personal  or                                                                    
     financial interest  or engage  in or  accept employment                                                                    
     outside the  agency which the  employee serves,  if the                                                                    
     outside  employment or  service is  incompatible or  in                                                                    
     conflict with the proper discharge of official duties.                                                                     
MR. POUND  explained that HB 282  will give the president  of the                                                               
university  a  recruiting tool.    He  or  she  will be  able  to                                                               
negotiate intellectual  property contracts and agreements  with a                                                               
researcher,  who could  then develop  a  project or  commercially                                                               
viable product.   Based  on negotiation,  the researcher  and the                                                               
university  could both  benefit from  that commercial  enterprise                                                               
through sale,  entrepreneurial activities, or the  development of                                                               
an industry within the state.  He said:                                                                                         
     The agreement  would allow  the researcher  to continue                                                                    
     advancing work, which would help  maintain staff at the                                                                    
     university.   And with passage  of HB 282, we  open the                                                                    
     door to a new form  of quality staff at the university,                                                                    
     quality researchers, and,  potentially, quality faculty                                                                    
     who would be  able to earn additional  money that would                                                                    
     not be coming out of the general fund.                                                                                     
Number 0285                                                                                                                     
REPRESENTATIVE  GUTTENBERG asked  Mr. Pound  what he  saw as  the                                                               
ultimate, long-term benefit of HB 282.                                                                                          
MR.  POUND   replied  that  there  are   many  research  projects                                                               
currently taking  place, such as nanotechnology  research, at the                                                               
University  of  Fairbanks.   He  said  there have  been  advances                                                               
having to  do with mining, geothermal,  and geophysical research.                                                               
He saw the ultimate benefit  occurring when a researcher develops                                                               
a  valuable product  and then  works  with the  university in  an                                                               
entrepreneurial status.   Both the researcher  and the university                                                               
would benefit financially from this process.                                                                                    
REPRESENTATIVE GUTTENBERG noted that he'd  signed on to HB 282 as                                                               
a cosponsor  because he  saw the  benefit of  research facilities                                                               
affiliated with the university  exploring nanotechnology or cold-                                                               
weather research, for example.                                                                                                  
MR. POUND said a researcher  presently has the advantage of using                                                               
university research  facilities and the efforts  of undergraduate                                                               
students.   An individual  would not be  able to  duplicate these                                                               
REPRESENTATIVE  GUTTENBERG   asked  if  the  president   [of  the                                                               
university]  had   expressed  having  problems   with  recruiting                                                               
MR.  POUND offered  his belief  that this  bill will  improve the                                                               
ability to  recruit.  Referring  to a  survey in the  packet that                                                               
indicated a retention  problem in the university  system, he said                                                               
researchers have no  incentive to stay "once they've  gotten to a                                                               
certain level."                                                                                                                 
Number 0460                                                                                                                     
REPRESENTATIVE DAHLSTROM  asked Mr. Pound to  clarify the section                                                               
of  bill   information  relating   to  inventions   and  patents.                                                               
Relating her  understanding that  [patents] would be  assigned to                                                               
the  university, she  inquired about  equitable compensation  for                                                               
the researcher  who worked on the  patent for 20 years,  and what                                                               
happens  when  that  person retires  and  leaves  the  university                                                               
MR.  POUND  answered, depending  on  how  the contract  would  be                                                               
negotiated,  that it  would be  part of  the negotiation  process                                                               
between the  researcher and  the university  with regard  to "who                                                               
gets what and when" ....                                                                                                        
REPRESENTATIVE  DAHLSTROM  suggested  it   would  depend  on  the                                                               
negotiation skills of the professor involved, then.                                                                             
MR. POUND replied in the affirmative.                                                                                           
REPRESENTATIVE  DAHLSTROM   requested  information   about  other                                                               
universities  in   the  country  that  may   handle  intellectual                                                               
property rights  in this  manner, and  whether these  efforts are                                                               
MR. POUND  said he  didn't have total  numbers, but  had provided                                                               
information in the  packet from two other states.   He noted that                                                               
Duke University Medical Center, a  prime research facility in the                                                               
medical  profession,  had  developed   new  techniques  that  are                                                               
considered intellectual property.  He  said both the professor or                                                               
researcher and the university benefit from that greatly.                                                                        
Number 0580                                                                                                                     
REPRESENTATIVE DAHLSTROM asked Mr. Pound:                                                                                       
     Do  you ...  foresee  any problem  with ...  professors                                                                    
     doing  research  and getting  to  a  certain point  and                                                                    
     thinking, "Oh, I've really hit  on something."  And, at                                                                    
     that point,  changing the focus  of their  research and                                                                    
     maybe even,  then, leaving the  university, and  so the                                                                    
     students actually don't, then,  have the benefit ... of                                                                    
     their education and  knowledge, because they're looking                                                                    
     at it from just the financial aspect of the patent?                                                                        
MR. POUND said  he thinks that is the problem  now.  He indicated                                                               
HB  282  would put  in  place  a  negotiated contract  whereby  a                                                               
researcher would know  up front what was expected of  him or her.                                                               
He added:                                                                                                                       
     There  is a  potential  reward for  them remaining  and                                                                    
     continuing  their  research  where  it's  already  been                                                                    
     started, and  not taking it  with them.  And  then, ...                                                                    
     depending, again,  how the  contract is  written, there                                                                    
     is  at least  an implied  right for  the university  to                                                                    
     say, "Well,  that's our property; ...  whether you take                                                                    
     it to  Iowa or  not, ...  50 percent of  it ...  is our                                                                    
Number 0668                                                                                                                     
REPRESENTATIVE  ROKEBERG  asked  about the  university's  current                                                               
policy with regard to ownership of intellectual property.                                                                       
MR. POUND  referred to  a handout, noting  that currently  for an                                                               
invention, the  inventor gets  100 percent  of the  first $10,000                                                               
and  the university  gets zero;  if the  invention is  worth more                                                               
than $10,000, the split is 50-50.                                                                                               
REPRESENTATIVE  ROKEBERG  asked, "Fundamentally,  the  university                                                               
can  set  its own  policy  currently  on  these issues,  ...  but                                                               
they're   restricted  from   actually   entering  into   business                                                               
enterprises; that's the  nature of the bill?"  He  also asked for                                                               
specific  instances  at  the  University   of  Alaska  when  this                                                               
legislation would have been helpful.                                                                                            
MR. POUND  replied that Representative Rokeberg  was correct with                                                               
regard to  current university policy.   However, he  wasn't aware                                                               
of specifics  that he  could discuss  due to  personnel policies.                                                               
He  said  it's a  general  policy  issue.    He referred  to  the                                                               
instructors'  survey in  the  bill  packet and  said  there is  a                                                               
fairly  large  concern  about the  "outflux"  of  professors  and                                                               
faculty from the University of  Alaska.  He remarked, "We believe                                                               
that this is an incentive to keep some of them there."                                                                          
Number 0832                                                                                                                     
REPRESENTATIVE ROKEBERG  said he  believes this is  positive, but                                                               
declared a potential  conflict of interest because he  has a seat                                                               
on  the University  of Alaska's  EPSCoR [Experimental  Program to                                                               
Stimulate Competitive Research] board.   He explained, "It has to                                                               
do with  experimental research with  both the  federal government                                                               
and the University of Alaska, with  the aim of endeavoring to get                                                               
additional   grants   or   research,  and   to   facilitate   the                                                               
university's role in research, and to increase their funding."                                                                  
CHAIR  ANDERSON responded,  "We'll  object so  that  you vote  on                                                               
this."   He  went  on to  say he'd  spoken  with [Mark  Hamilton,                                                               
president  of  the  University  of Alaska]  and  had  offered  to                                                               
sponsor  this  bill.    Saying he  supports  the  university  and                                                               
strengthening business and entrepreneurialship, he added:                                                                       
     This  ... enforces  that and  says to  researchers, ...                                                                    
     that  if you  have an  idea, you  can partner  with the                                                                    
     university,  and we  will keep  you here,  and you  can                                                                    
     instruct our  students and ...  keep the talent  in the                                                                    
     school, rather than depart.                                                                                                
REPRESENTATIVE  ROKEBERG   noted  that  this  bill   invests  the                                                               
president  of the  university with  the  right to  grant, or  not                                                               
grant, a  business application.   He asked  what the role  of the                                                               
regents would be.                                                                                                               
MR. POUND  said he wasn't sure,  but understood that most  of the                                                               
hiring and firing is done by the president.                                                                                     
Number 0947                                                                                                                     
REPRESENTATIVE DAHLSTROM moved to report  HB 282 out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 282 was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
HB 339-TRADE PRACTICES                                                                                                        
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be HOUSE BILL NO. 339, "An  Act relating to negative option plans                                                               
for  sales,  to charges  for  goods  or  services after  a  trial                                                               
period,  and   to  acts  that   are  unlawful  as   unfair  trade                                                               
Number 0985                                                                                                                     
REPRESENTATIVE  KEVIN MEYER,  Alaska State  Legislature, sponsor,                                                               
explained that HB 339 does two things.  He said:                                                                                
     First of all,  it's going to make it  clear and concise                                                                    
     when  a business  uses either  free trial  practices or                                                                    
     negative  option marketing  practices.   It's going  to                                                                    
     require that the seller make  it clear and disclose all                                                                    
     the  material  items and  conditions  of  a free  trial                                                                    
     period. ...                                                                                                                
     Any  consumer obligations  that  are  required will  be                                                                    
     clear and  will be known  by the consumer.   The seller                                                                    
     is  going  to have  to  describe,  in detail,  all  the                                                                    
     charges that  are going to  be made after the  ... free                                                                    
     trial  period, and  how these  charges are  calculated,                                                                    
     and how they are going to be paid.                                                                                         
     Bottom line:  the seller  may not charge a consumer for                                                                    
     a good or service that  was provided under a free trial                                                                    
     period  unless  the  requirements ...  have  been  made                                                                    
     [and]  satisfactorily are  met  by the  business.   And                                                                    
     there's a  list of  all those  requirements ...  in the                                                                    
     bill itself for this free-trial-period plan.                                                                               
Number 1200                                                                                                                     
REPRESENTATIVE MEYER continued:                                                                                                 
     The  second  part ...  of  this  bill  has to  do  with                                                                    
     negative option plans.   And they're defined  as a type                                                                    
     of  arrangement  where  a   seller  provides  goods  or                                                                    
     services to  someone who doesn't necessarily  want them                                                                    
     or order them, but you just  receive them.  And then it                                                                    
     requires you to  take a proactive position  to ... say,                                                                    
     "I don't want these," or to stop the payment.                                                                              
     Some  businesses have  used this;  they see  this as  a                                                                    
     successful  method to  get their  product out  there to                                                                    
     various consumers because, frankly,  we're all busy.  A                                                                    
     lot  of us  have  two,  three jobs,  kids,  and we  get                                                                    
     something in the mail, we  go, "OK, I don't really want                                                                    
     this, but  it's only 24  bucks; I'm going to  keep it."                                                                    
     And that's  what they're  ... hoping  for, is  that you                                                                    
     don't send it back.                                                                                                        
REPRESENTATIVE MEYER  highlighted the  unfairness of  putting the                                                               
burden on consumers  to take action to get rid  of something that                                                               
they  don't necessarily  want  or  order.   And  it  can be  very                                                               
costly, he  noted, citing  an example  when he  was charged  $8 a                                                               
month and was  unable to recover the money from  a travel agency.                                                               
He continued:                                                                                                                   
     This bill prohibits  the use of a  negative option plan                                                                    
     unless  certain disclosures,  again,  are  made to  the                                                                    
     consumer, ... and those disclosures  are listed in this                                                                    
     bill  too.   And  what  this bill  does  is, it  aligns                                                                    
     Alaska Statutes  more closely  to the  federal statutes                                                                    
     and  the  federal  rules dealing  with  negative-option                                                                    
     marketing.    And it  removes  any  uncertainty in  our                                                                    
     statute of  what role  and responsibility  business has                                                                    
     in  protecting a  consumer, so  when  people are  doing                                                                    
     business up here, it will be  clear as to what they can                                                                    
     and can't do.                                                                                                              
Number 1217                                                                                                                     
REPRESENTATIVE MEYER  indicated the Department of  Law had worked                                                               
closely  with him  on  this,  and noted  that  Mr. Sniffen  would                                                               
testify via teleconference.  Referring  to the proposed committee                                                               
substitute (CS), he said the changes are fairly minor.                                                                          
Number 1239                                                                                                                     
REPRESENTATIVE GATTO moved to adopt  the proposed CS, Version 23-                                                               
LS1265\I, Bannister, 1/29/04, for discussion purposes.                                                                          
CHAIR  ANDERSON  announced  that   [Version  I]  was  before  the                                                               
committee  for  discussion purposes.    In  response to  members'                                                               
requests, he said [the committee aide] would distribute copies.                                                                 
[Chair  Anderson  called  on  Mr.   Sniffen,  but  there  was  no                                                               
Number 1319                                                                                                                     
REPRESENTATIVE  DAHLSTROM  said  she thinks  this  is  important,                                                               
especially  for  people  who  don't   understand  the  system  or                                                               
vulnerable, older  Alaskans.   She noted that  when she'd  had to                                                               
deal  with this  kind of  a situation  personally, the  burden of                                                               
proof was always  on her to make phone calls,  write letters, and                                                               
so forth.                                                                                                                       
REPRESENTATIVE  MEYER agreed  that the  elderly are  probably the                                                               
most  vulnerable  to these  marketing  techniques.   He  said  he                                                               
believes this  bill will clarify  what is required for  the State                                                               
of Alaska.   He added that  [the Department of Law]  can go after                                                               
in-state offenders,  and for  out-of-state ones,  federal statute                                                               
could be used as well.                                                                                                          
REPRESENTATIVE  ROKEBERG referred  to Section  1 of  the original                                                               
bill and said  there seems to be a significant  change in Version                                                               
I with  regard to prohibiting  free trial periods.   He expressed                                                               
concern as  a small-business owner,   and asked  whether reaching                                                               
into one's pocket  and giving someone a free pass  to a gymnasium                                                               
would be subject to this, for example.                                                                                          
Number 1429                                                                                                                     
SUZANNE CUNNINGHAM,  Staff to Representative Kevin  Meyer, Alaska                                                               
State Legislature, responded, "No."   She paraphrased [Version I]                                                               
subsection (e), page 2, beginning at line 13, which read:                                                                       
     This section  does not  apply to  a seller  who offers,                                                                    
     promotes,  advertises, or  otherwise  gives a  consumer                                                                    
     goods  or services  for  free if  the  seller does  not                                                                    
     impose any  obligations on a  consumer who  accepts the                                                                    
     free goods or services.                                                                                                    
MS. CUNNINGHAM remarked,  "So, if you were to give  myself a free                                                               
pass to  your gym, and if  there's no obligation that  I join the                                                               
gym or pay $15 when I walk in  the door, then this does not apply                                                               
to it."                                                                                                                         
Number 1500                                                                                                                     
CHAIR  ANDERSON  asked  about   AOL  [America  Online,  Inc.,  an                                                               
Internet service provider],  which costs perhaps $30  a month and                                                               
yet stores give  away [compact disks that provide]  the first 500                                                               
hours free.  He said he doesn't  use 500 hours a month, and noted                                                               
that AOL didn't give him free hours  when he signed up.  He asked                                                               
whether this  bill would affect that,  or whether it's more  of a                                                               
federal issue, since [AOL] transcends all states.                                                                               
MS. CUNNINGHAM  said she believes it  would be more of  a federal                                                               
issue, but deferred to Mr. Sniffen to answer that.                                                                              
REPRESENTATIVE GATTO  expressed a negative opinion  of businesses                                                               
that say  they're giving a free  month of a good  or service, but                                                               
not until  the third month, after  the consumer has paid  for the                                                               
first two months.                                                                                                               
REPRESENTATIVE MEYER noted that he'd  been relying on Mr. Sniffen                                                               
[who wasn't  available on teleconference  yet] to answer  some of                                                               
these questions.  He added that  as long as it's disclosed and in                                                               
writing, and  the consumer is  fully aware of  what he or  she is                                                               
signing up for, the foregoing situation would be fine.                                                                          
Number 1638                                                                                                                     
REPRESENTATIVE GATTO  asked whether this will  absolutely prevent                                                               
having a company  provide something like a  phone service without                                                               
the consumer's positive assent.                                                                                                 
REPRESENTATIVE MEYER said yes.                                                                                                  
REPRESENTATIVE  DAHLSTROM noted  with  regard to  communications,                                                               
there was a specific ruling related  to that.  She added that the                                                               
Regulatory  Commission of  Alaska (RCA)  determines those  issues                                                               
with that industry.                                                                                                             
REPRESENTATIVE GUTTENBERG  asked if undisclosed  balloon payments                                                               
are  covered  under  HB  339,  such  as  when  a  person  buys  a                                                               
television and the interest is deferred.                                                                                        
REPRESENTATIVE MEYER  responded that  the consumer would  have to                                                               
sign a written  consent and clearly accept terms;  the onus would                                                               
then be  on the business to  prove it had disclosed  the terms to                                                               
the customer, and have this proof in writing.                                                                                   
Number 1728                                                                                                                     
CHAIR ANDERSON,  in the  absence of  testimony from  Mr. Sniffen,                                                               
directed the committee to pages  1-2 to discuss whether there was                                                               
discomfort with  the [disclosures].   He said he  was comfortable                                                               
with paragraphs (1) through (4), which read:                                                                                    
               (1) any obligation by the consumer to                                                                            
     purchase a minimum quantity of  goods or services after                                                                    
     the free trial period ends;                                                                                                
               (2) a description of all charges that will                                                                       
     be made after the free  trial period ends and how those                                                                    
     charges will be calculated;                                                                                                
               (3) whether any charges for goods or                                                                             
     services will include postage;                                                                                             
               (4) any other obligations the consumer                                                                           
     assumes  by accepting  or using  the goods  or services                                                                    
     within the free trial period.                                                                                              
Number 1756                                                                                                                     
REPRESENTATIVE  ROKEBERG asked  for  verification that  Section 1                                                               
relates  only to  consumer goods  or services,  rather than,  for                                                               
example, free rent for an apartment rental.                                                                                     
REPRESENTATIVE MEYER said that was his understanding.                                                                           
[Representative  Rokeberg deferred  an additional  question until                                                               
after Mr. Sniffen testified.]                                                                                                   
Number 1785                                                                                                                     
CLYDE   (ED)   SNIFFEN,    JR.,   Assistant   Attorney   General,                                                               
Commercial/Fair  Business  Section, Civil  Division  (Anchorage),                                                               
Department of  Law, informed members  that in spite  of technical                                                               
problems, he'd listened to the  previous discussion.  He said the                                                               
department has  been working closely with  Representative Meyer's                                                               
office  to come  up  with  the language  in  the  bill, and  it's                                                               
intended to  address a lot of  the issues being discussed  by the                                                               
committee.  He continued:                                                                                                       
     We did  have some  problems last year  with one  of the                                                                    
     utility companies  trying to get consumers  to agree to                                                                    
     pay  for  services that  they  had  no idea  they  were                                                                    
     paying for,  through a  negative option  plan.   And it                                                                    
     was  our position  that, essentially,  consumers should                                                                    
     never  have to  pay for  anything that  they don't  ask                                                                    
     for.  You  shouldn't just have luggage show  up on your                                                                    
     doorstep and  you get to  keep it,  if you want  it; if                                                                    
     you don't want it, send it  back.  And that's what this                                                                    
     bill does:  it prevents that exact kind of thing.                                                                          
     Some  of  these  other  issues I  heard  the  committee                                                                    
     discuss  relating to  ... "buy  three  months, get  one                                                                    
     month free," other  types of offers, might  be a little                                                                    
     outside the scope  ... of this bill.   This bill really                                                                    
     targets two specific types of  conduct:  the free trial                                                                    
     period,  which is,  ... "Have  this merchandise  for 30                                                                    
     days and if  you like it, keep it and  we'll bill you."                                                                    
     Or another  sort of  twist on that  is, "Try  our cable                                                                    
     for 30  days, and  if you  decide to  watch a  movie on                                                                    
     this premium channel,  then you're automatically signed                                                                    
     up for  that unless you call  us and tell us  you don't                                                                    
     want it."  That's sort of  a mix of a free trial period                                                                    
     along with a negative option plan. ...                                                                                     
     The target  of this kind  of legislation is  really ...                                                                    
     the bigger utility companies  and national chain stores                                                                    
     who  might already  have your  business.   You  already                                                                    
     have cable,  you already have  phone service,  and they                                                                    
     want  to get  you to  sign up  for additional  services                                                                    
     that they offer that you may or may not actually want.                                                                     
     And  a  lot  of  these  are  small-dollar  things  that                                                                    
     consumers just won't blink an  eye about. ... It's $2 a                                                                    
     month; it's $4 a month. ...  You get a notice with your                                                                    
     billing:   "Oh, by the  way, we've decided to  sign you                                                                    
     up for  this extra ...  voice calling plan, and  if you                                                                    
     don't want  it, you  have to  tell us."   And  we think                                                                    
     federal legislation prohibits that.                                                                                        
Number 1877                                                                                                                     
MR. SNIFFEN continued:                                                                                                          
     We  have  some  consumer  protection  language  in  our                                                                    
     current   consumer   protection   Act   that   probably                                                                    
     prohibits that,  but it's  not nearly  as clear  ... as                                                                    
     this bill.   So  we certainly support  this, and  see a                                                                    
     need  for  it in  Anchorage.    And  I don't  think  it                                                                    
     imposes an incredible burden on  businesses at the same                                                                    
MR. SNIFFEN concluded by saying  it's simply a disclosure type of                                                               
legislation,  with  the  need  to   get  the  consumer's  consent                                                               
Number 1908                                                                                                                     
REPRESENTATIVE  GUTTENBERG  referred  to page  1  [lines  10-11],                                                               
"shall  clearly and  conspicuously  disclose all  material".   He                                                               
also referred  to page 2 [lines  7-8], "The form for  the written                                                               
consent must  be prepared by the  seller".  He asked  if there is                                                               
any standard for the form in terms of format and clarity.                                                                       
MR. SNIFFEN said  that's an excellent question.   The language in                                                               
the bill  just requires it  to be "clear and  conspicuous", which                                                               
he surmised  would be  on a  case-by-case basis.   He  noted that                                                               
there  aren't any  definitive standards  as  to the  size of  the                                                               
type,  for example,  but  said "clear  and  conspicuous" gives  a                                                               
little more  room to look  at the  circumstances.  He  cited auto                                                               
dealers as an  example, and suggested that most  people know what                                                               
"clear and conspicuous" is.                                                                                                     
Number 2010                                                                                                                     
REPRESENTATIVE  ROKEBERG   paraphrased  the  first   sentence  of                                                               
Section 1, subsection (c), which read:                                                                                          
     Before offering,  promoting, advertising,  or otherwise                                                                    
     giving a  consumer goods or  services for a  free trial                                                                    
     period, a  seller shall obtain express  written consent                                                                    
     from the consumer to the free trial period.                                                                                
REPRESENTATIVE  ROKEBERG  asked  how  that would  be  done  in  a                                                               
general advertising campaign.   He inquired, "Are  you making the                                                               
assumption that the  consumer would send for, or  consent to, the                                                               
free trial period  concurrent with the offers to  accept the free                                                               
trial period?"                                                                                                                  
MR. SNIFFEN said it's an excellent  question.  Noting that he was                                                               
reading  it   as  Representative   Rokeberg  was,   he  suggested                                                               
rewording would be possible.  He added:                                                                                         
     I think what you're suggesting  is a business should be                                                                    
     able to run  an advertisement that said,  "Come on into                                                                    
     our store and sign up  for a free 30-day trial period."                                                                    
     And you  shouldn't have to get  written permission from                                                                    
     a consumer to run that  ad.  I understand that concern,                                                                    
     and there  may be a way  we can rework that  language a                                                                    
     little bit to clarify that.                                                                                                
MR.  SNIFFEN suggested  a possible  solution  for subsection  (c)                                                               
purposes only, to say "before  offering or giving a consumer" and                                                               
then delete the "promoting or advertising" language.                                                                            
REPRESENTATIVE ROKEBERG referred  to advertising, subsection (b),                                                               
and the "for disclosure" language.  He asked about fine print.                                                                  
MR.  SNIFFEN responded,  "It  would  just need  to  be clear  and                                                               
conspicuous,  and if  we saw  something in  ultrafine print  that                                                               
required  a magnifying  glass  to read  or  understand, we  would                                                               
consider that to be a violation."                                                                                               
Number 2130                                                                                                                     
REPRESENTATIVE ROKEBERG  said he  thought it important  that this                                                               
be  clear.    He  said  the  committee  doesn't  want  to  remove                                                               
legitimate, free opportunities for the consumer.                                                                                
Number 2150                                                                                                                     
MR. SNIFFEN,  in response to  Chair Anderson,  offered conceptual                                                               
language to  be substituted  in subsection (c),  page 2,  line 5,                                                               
along with an explanation:                                                                                                      
     Remove the terms "promoting  and advertising" from that                                                                    
     line, so  the ...  section would read  "before offering                                                                    
     or otherwise giving a consumer  goods or services", and                                                                    
     then  continue  with that  paragraph.    That would  at                                                                    
     least allow advertising  for a free trial  period, in a                                                                    
     certain  manner,  before  the consumer  would  have  to                                                                    
     enter into a written agreement.                                                                                            
Number 2183                                                                                                                     
REPRESENTATIVE ROKEBERG  moved that  the foregoing be  adopted as                                                               
Amendment 1.                                                                                                                    
Number 2185                                                                                                                     
REPRESENTATIVE DAHLSTROM objected for  purposes of discussion and                                                               
asked the sponsor to comment.                                                                                                   
REPRESENTATIVE MEYER agreed  with Amendment 1, but  noted that it                                                               
might also apply to page 1, line 9.                                                                                             
MR. SNIFFEN said he didn't  believe it would harm the legislation                                                               
to make that change as well.                                                                                                    
REPRESENTATIVE ROKEBERG  said he  wasn't certain about  doing the                                                               
same  amendment there,  however, because  of the  desire to  make                                                               
sure  that  the  promotion  and advertisements  still  have  some                                                               
sideboards.  He suggested a need to look at it.                                                                                 
Number 2223                                                                                                                     
REPRESENTATIVE  CRAWFORD began  discussion of  what later  became                                                               
Amendment 2.  He proposed  that changing "before" to "when" would                                                               
make more  sense.  He  asked how  those things would  be provided                                                               
before advertising.                                                                                                             
MR. SNIFFEN responded:                                                                                                          
     I don't know that  there's really a semantic difference                                                                    
     between "before"  and "when"  offering.  The  intent, I                                                                    
     think, of the  legislation here is to  say, "Before you                                                                    
     engage in this kind of  activity, we want to give these                                                                    
     kinds of disclosures to the  consumer." ... If you say,                                                                    
     "Before  you advertise,  for example,  you  have to  do                                                                    
     these  things,"  I  think  Representative  Crawford  is                                                                    
     correct:   it  would happen  at  the same  time as  the                                                                    
     advertisement, or  the advertising would  include these                                                                    
     kinds of  disclosures.  And  I read this to  mean that,                                                                    
     but  I  can see  how  a  different reading  could  mean                                                                    
     something different.                                                                                                       
REPRESENTATIVE MEYER said he thought  that if the recommendations                                                               
that   Representative   Rokeberg    had   proposed   were   made,                                                               
Representative Crawford's concerns would  be rectified.  He asked                                                               
whether Amendment  1 needed  to be made  in both  subsection (b),                                                               
page l, and subsection (c), page 2.                                                                                             
MR. SNIFFEN referred  to the proposed changes  in subsection (b),                                                               
page  1,  line  9,  and remarked  that  removing  "promoting  and                                                               
advertising" would  allow a  seller to  advertise or  offer, even                                                               
though [the consumer]  would be required to go into  the store to                                                               
find out more details.  He added:                                                                                               
     But when you actually went  into the store and actually                                                                    
     signed  up  for the  deal,  before  you signed  on  the                                                                    
     dotted  line, [the  business] would  have  to make  the                                                                    
     disclosures, as required, under this statute.                                                                              
     It  really is  a policy  call on  whether you  want the                                                                    
     advertisements to include the  conditions of the offer,                                                                    
     or  are you  going to  let the  advertisement bait  the                                                                    
     consumers  into  the  store,   and  then  -  when  they                                                                    
     actually sign on  the dotted line -  have that document                                                                    
     disclose the terms of the offer.                                                                                           
MR. SNIFFEN  recommended that the advertisement  at least contain                                                               
some elements of the offer so  people aren't being lured into the                                                               
store when they  wouldn't have gone if they'd  known the details.                                                               
He  said  that's the  main  difference  he  sees in  having  that                                                               
language in subsection  (b), as opposed to  having the "promoting                                                               
and advertising" language on page 2, line 5, subsection (c).                                                                    
Number 2370                                                                                                                     
CHAIR  ANDERSON asked  if  there was  any  objection to  adopting                                                               
Amendment 1,  deleting "promoting  and advertising" from  page 2,                                                               
line 5.  There being no objection, it was so ordered.                                                                           
REPRESENTATIVE  ROKEBERG agreed  with Representative  Crawford on                                                               
the use of "before" in subsections (b) and (c).                                                                                 
TAPE 04-7, SIDE B                                                                                                             
Number 2385                                                                                                                     
REPRESENTATIVE  ROKEBERG commented,  "You couldn't  have 'before'                                                               
and  'concurrent' or  'concurrently'. ...  Maybe 'when'  would be                                                               
CHAIR  ANDERSON asked  Mr. Sniffen  whether that  makes sense  to                                                               
have "when offering" on page 1, line 9, and on page 2, line 5.                                                                  
MR. SNIFFEN said he didn't see any problems with it.                                                                            
Number 2357                                                                                                                     
REPRESENTATIVE   GATTO  proposed   perhaps  substituting   "after                                                               
MR. SNIFFEN countered that it might  allow too much leeway to the                                                               
prospective sellers  to make a pitch  and trap the consumer.   He                                                               
restated the bill's  purpose:  to bring disclosures  out before a                                                               
consumer is obligated to do anything.                                                                                           
REPRESENTATIVE GATTO asked about "upon offering".                                                                               
MR.  SNIFFEN agreed  this would  work, or  "when offering"  would                                                               
also work.                                                                                                                      
Number 2311                                                                                                                     
CHAIR  ANDERSON  interpreted   Amendment  2  from  Representative                                                               
Crawford's previous suggestion:   On page 1, line 9,  and on page                                                               
2, line 5, delete "before" and insert "when".                                                                                   
CHAIR ANDERSON asked whether there  was any objection to adopting                                                               
Amendment 2.  There being no objection, it was so ordered.                                                                      
Number 2291                                                                                                                     
REPRESENTATIVE ROKEBERG  referred to [Section 1]  subsection (b),                                                               
paragraphs (1) to  (4).  He asked whether it's  correct that when                                                               
[a  business]  is  advertising,  these   terms  must  be  in  the                                                               
MR. SNIFFEN emphasized the need  to address the four [paragraphs]                                                               
of  subsection (b).   Although  there are  no specific  terms, he                                                               
said the  material terms need  to be  included in some  clear and                                                               
conspicuous way in the offer.   In further response, he said, for                                                               
example, that if  the charges for the goods  or services required                                                               
paying  for  postage  to  receive   them,  there  could  be  some                                                               
disclosure that the  offer doesn't include free  postage, or that                                                               
the consumer is responsible for those charges.                                                                                  
REPRESENTATIVE ROKEBERG noted that  [paragraph (3)] says "whether                                                               
any charges will be included", not "if".                                                                                        
MR. SNIFFEN agreed, suggesting either  could be used.  In further                                                               
response, he said  this language comes straight  from the federal                                                               
statute that is very similar to HB 339.  He added:                                                                              
     However the seller  wants to address that  postage - if                                                                    
     there isn't  any, sometimes  silence can  be confusing.                                                                    
     But  to say  that the  offer includes  all postage  and                                                                    
     handling  charges, for  example, here  in Alaska,  that                                                                    
     could be  important because that could  consume a large                                                                    
     part of the cost of the goods or service. ...                                                                              
     Of  course, it's  up to  the committee  if you  want to                                                                    
     only have  to disclose that  if there is  an obligation                                                                    
     on the  consumer, or ...  you can  let it be  silent if                                                                    
     there  is not  an  obligation on  the  consumer.   That                                                                    
     would be the effect of changing ... the word "whether"                                                                     
     to "if".                                                                                                                   
Number 2202                                                                                                                     
REPRESENTATIVE GATTO began discussion  of Conceptual Amendment 3.                                                               
He  asked Mr.  Sniffen whether  "postage" is  too focused,  since                                                               
there are different ways of transporting goods.                                                                                 
MR.  SNIFFEN said  that's an  excellent point  and that  he'd not                                                               
object to amending that to just say "includes shipping charges".                                                                
REPRESENTATIVE ROKEBERG suggested "shipping and handling".                                                                      
Number 2165                                                                                                                     
REPRESENTATIVE GATTO moved  to adopt Conceptual Amendment  3:  On                                                               
page  2,  line 2  [paragraph  (3],  delete "postage"  and  insert                                                               
"shipping" or "shipping and handling".                                                                                          
CHAIR  ANDERSON   announced  that  it  would   be  "shipping  and                                                               
handling".  He asked whether Representative Meyer objected.                                                                     
REPRESENTATIVE MEYER said he had no objection.                                                                                  
CHAIR ANDERSON asked whether there  was any objection to adopting                                                               
Conceptual  Amendment 3.   There  being no  objection, it  was so                                                               
Number 2146                                                                                                                     
REPRESENTATIVE  ROKEBERG  reiterated Representative  Guttenberg's                                                               
issue  with small  print,  and  asked Mr.  Sniffen  if there  are                                                               
regulations on this issue.                                                                                                      
MR. SNIFFEN said  there are no regulations on the  size of print,                                                               
although  the  [department]  could  certainly adopt  some.    The                                                               
requirement under this  language is simply that it  must be clear                                                               
and  conspicuous, which  could be  dealt with  on a  case-by-case                                                               
basis.    He  added  that "clear"  and  "conspicuous"  have  been                                                               
judicially defined  in a variety of  circumstances, and suggested                                                               
the department could probably "make  a run" at violations dealing                                                               
with small print.                                                                                                               
Number 2111                                                                                                                     
REPRESENTATIVE  GUTTENBERG   asked  if  there  were   any  issues                                                               
concerning interstate commerce.                                                                                                 
MR. SNIFFEN  responded that  he didn't  believe so  and remarked,                                                               
"We don't  have a problem  here with  a lot of  outside companies                                                               
engaged  in this  practice."   As  an example,  he cited  Borders                                                               
Bookstore in Anchorage and explained:                                                                                           
     Well, Borders is a national  chain, and they're subject                                                                    
     to a lot of federal regulation.   And to the extent ...                                                                    
     they  are   complying  with  the   federal  regulation,                                                                    
     nothing in our statute here  ... would change that.  So                                                                    
     I don't  think there's a burden  on interstate commerce                                                                    
     through  this  language,  that  doesn't  already  exist                                                                    
     through other federal statutes.                                                                                            
CHAIR ANDERSON asked  whether anyone else wished to  testify.  He                                                               
then closed public testimony.                                                                                                   
Number 2049                                                                                                                     
REPRESENTATIVE  DAHLSTROM  recalled   stating  an  objection  [to                                                               
adopting Version I] and removed it.                                                                                             
Number 2038                                                                                                                     
REPRESENTATIVE  ROKEBERG moved  to report  CSHB 339,  Version 23-                                                               
LS1265\I, Bannister,  1/29/04, as amended, out  of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection,  CSHB 339(L&C)  was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
The committee took an at-ease from 4:20 p.m. to 4:23 p.m.                                                                       
HB 367-LICENSING SEX-ORIENTED BUSINESSES                                                                                      
Number 2016                                                                                                                     
CHAIR ANDERSON announced  that the final order  of business would                                                               
be HOUSE  BILL NO.  367, "An  Act relating  to the  licensing and                                                               
regulation of  sex-oriented businesses and  sex-oriented business                                                               
entertainers; relating to protection of  the safety and health of                                                               
and  to  education   of  young  persons  who   perform  in  adult                                                               
entertainment  establishments;  and  providing for  an  effective                                                               
date."    [Before the  committee,  adopted  as  a work  draft  on                                                               
1/30/04, was a proposed committee substitute (CS), Version H.]                                                                  
CHAIR  ANDERSON  informed  members that  public  testimony  would                                                               
continue,  and  requested  that testimony  be  limited  to  three                                                               
minutes apiece.   He  noted that  Representative McGuire,  one of                                                               
the  two sponsors,  was present  to  answer questions.   He  also                                                               
noted that he would propose an amendment.                                                                                       
Number 1989                                                                                                                     
ANDREE  McLEOD  expressed  appreciation for  efforts  to  protect                                                               
minors  under age  18 from  predators  and so  forth, but  voiced                                                               
concern that  HB 367  has far-reaching effects  on people  18 and                                                               
older in terms of freedom of  expression and free speech.  Noting                                                               
that  this   is  called  a  "sex-oriented   business"  bill,  she                                                               
suggested it  might be  prudent to  change it  to "adult-oriented                                                               
business" because sex isn't necessarily occurring.  She said:                                                                   
     I believe  this is a  local issue that's just  come up,                                                                    
     in  front of  our community  council.   I  am the  vice                                                                    
     president of  Tudor Community Council.   We  dealt with                                                                    
     it;  I  voted  against  the  resolution,  although  our                                                                    
     community  council passed  it.   This is  local because                                                                    
     local governments can establish  and limit what will be                                                                    
     allowed  and  tolerated  in their  communities,  but  I                                                                    
     don't believe the state has any business in it. ...                                                                        
     What really  concerns me is that  government is telling                                                                    
     women,  18  years old  and  older,  what they  can  and                                                                    
     cannot do  with their bodies;  ... I caution  this body                                                                    
     to  be  mindful  of  that.    There  are  already  laws                                                                    
     addressing  illegal  activities, especially  when  they                                                                    
     deal   with   minors  under   the   age   of  18,   and                                                                    
     prostitution.    And the  onus  is  on ...  the  police                                                                    
     departments to  enforce those [laws]  and go  after the                                                                    
     adults and the predators.                                                                                                  
     But,  again, in  this country  we value  our rights  of                                                                    
     dealing  with  freedoms  of expression,  and  I  would,                                                                    
     again,  caution you  to not  behave as  censors because                                                                    
     you  don't find  them  to your  liking,  based on  your                                                                    
     morals and beliefs.                                                                                                        
     In  the second  paragraph  of  the sponsors'  statement                                                                    
     it's  mentioned that  it's  likely unconstitutional  to                                                                    
     ban  21-year-olds  from these  jobs.    So you  already                                                                    
     understand  that  there  might be  an  unconstitutional                                                                    
     issue here.  We are  talking about performance art, and                                                                    
     it's a century of performance art.                                                                                         
Number 1876                                                                                                                     
REPRESENTATIVE  GATTO  asked  if  Ms.  McLeod  was  saying  state                                                               
protection isn't needed for minors, and it can be done locally.                                                                 
MS. McLEOD  replied no, reiterating that  she appreciates efforts                                                               
to  protect minors  under the  age of  18.   She referred  to the                                                               
second  paragraph of  the  sponsor statement  and  noted that  it                                                               
mentions that it is likely  unconstitutional to ban [those under]                                                               
21  years from  these jobs.    She said  this is  a censoring  of                                                               
performance art.                                                                                                                
Number 1836                                                                                                                     
REPRESENTATIVE  LYNN offered  his  understanding  that this  bill                                                               
doesn't ban this type of activity, but licenses it.                                                                             
Number 1825                                                                                                                     
REPRESENTATIVE LESIL  McGUIRE, Alaska  State Legislature,  one of                                                               
the sponsors of HB 367, responded:                                                                                              
     Suffice it  to say,  I think what  we're doing  here is                                                                    
     constitutional.   We are  walking a  fine line,  and we                                                                    
     realize that, but we have  good news to report, that in                                                                    
     Barnes v.  Glenn Theater, Inc., which  was reported out                                                                  
     of  the United  States  Supreme Court  in  1991 -  very                                                                    
     recent -  what we're seeing  is a trend in  the Supreme                                                                    
     Court  that  goes  toward  saying  that  in  the  past,                                                                    
     conduct has  been considered a form  of expression, and                                                                    
     yes, that's  true.  But  that said,  we want to  give a                                                                    
     greater  role  to  states   and  local  governments  in                                                                    
     countering  that by  saying if  you have  a substantial                                                                    
     state  interest in  curbing  the  secondary effects  of                                                                    
     something  that, in  fact, may  involve speech  and may                                                                    
     involve conduct that comes out  of that, that the state                                                                    
     does have a  role and, in fact, an  obligation.  That's                                                                    
     And number  two:   the Supreme Court  in that  case ...                                                                    
     made it  very, very clear  that you have to  be careful                                                                    
     when you talk about conduct  as being equated with free                                                                    
     speech,  and  that all  types  of  conduct -  including                                                                    
     walking  down the  street, chanting  a song  that maybe                                                                    
     you  learned in  Girl  Scouts, or  going  to meet  your                                                                    
     friends for  lunch, or so on  - there are all  kinds of                                                                    
     things that  we engage  in as  humans that  are conduct                                                                    
     that can be described as "expression."                                                                                     
     And  so  what  you   are  seeing,  Andree  [McLeod]  is                                                                    
     absolutely  right.    This  is an  area  that  has  had                                                                    
     constitutional challenges  and controversy.  But  it is                                                                    
     my  belief, and  Representative  Gara's,  that you  are                                                                    
     allowed to  license.  In  fact, ... I would  state that                                                                    
     100 percent.  ... Within the  license, I believe  - and                                                                    
     we believe  from our case  law -  that you can  make an                                                                    
     age-based restriction on that license.                                                                                     
Number 1720                                                                                                                     
REPRESENTATIVE McGUIRE continued:                                                                                               
     So we  are not  banning nude  and semi-nude  dancing in                                                                    
     the  state   of  Alaska  under   any  stretch   of  the                                                                    
     imagination.   We are  not even going  as far  as other                                                                    
     states  have.   For example,  in the  case that  I just                                                                    
     mentioned by the Supreme Court,  Indiana went so far as                                                                    
     to say,  "You have to  have pasties, and  G-strings, no                                                                    
     matter what age you are." ...                                                                                              
     What we are saying is, you  can do that in the state of                                                                    
     Alaska, but you have  an age-related restriction that's                                                                    
     associated  with  it, so  that  when  you apply  for  a                                                                    
     license,  you  have to  demonstrate  that  you're of  a                                                                    
     certain  age.    And  we're  also  requiring  that  the                                                                    
     establishment itself be licensed.                                                                                          
     The final thing,  [Ms. McLeod]:  I  appreciate what you                                                                    
     say  about local  governments, but  the fact  is, local                                                                    
     governments aren't  regulating this industry.   What we                                                                    
     know from  testimony from the  state troopers,  the APD                                                                    
     [Anchorage  Police  Department]   and  the  [Alcoholic]                                                                    
     Control Beverage  Board is that  these clubs  have gone                                                                    
     unregulated. ...                                                                                                           
Number 1707                                                                                                                     
REPRESENTATIVE McGUIRE continued:                                                                                               
     And so you have no oversight  that's going on.  And the                                                                    
     police, in  their testimony, if  you recall,  said, "We                                                                    
     would love to have some  kind of a legal framework that                                                                    
     gives  us  an excuse,  that  gives  us an  opportunity,                                                                    
     whether it's just a mere fact of checking licenses.                                                                        
     Right now,  ... the  standard is much  higher.   So ...                                                                    
     that's  where  we're at.    We  believe that  we're  on                                                                    
     comfortable  ground.  ...  We don't  maintain  that  it                                                                    
     won't  be   challenged,  but  we  think   it  would  be                                                                    
     challenged whether  or not we were  merely licensing at                                                                    
     18 or  19.  We think  that the folks that  you're going                                                                    
     to  hear from  online  are going  to absolutely  oppose                                                                    
     anything that requires regulating  of their industry or                                                                    
     asking  them to  pay  for that  regulation.  ... And  I                                                                    
     think [that] is  logical:  you would  expect they would                                                                    
     oppose that.                                                                                                               
CHAIR ANDERSON called on Ms. Kathy Hartman.                                                                                     
Number 1635                                                                                                                     
KATHY HARTMAN, Co-Owner, Fantasies,  asked whether Ms. McLeod was                                                               
allowed to respond.                                                                                                             
CHAIR  ANDERSON  replied  that  the question  was  posed  to  the                                                               
sponsor, who'd answered it.                                                                                                     
MS. KATHY  HARTMAN said  she and  her sister,  who also  owns the                                                               
business, have been in business for  15 years and don't have many                                                               
regulations on their  business.  However, they've  tried to self-                                                               
regulate.   Indicating she  hadn't had  an opportunity  to review                                                               
the  new  proposed CS,  she  noted  the  need  for more  time  to                                                               
research  it.   She  agreed with  Ms. McLeod  that  [she and  her                                                               
sister] don't  consider their business  to be  sexually oriented,                                                               
but more  adult-oriented, dealing in performance  art rather than                                                               
sex.  She explained:                                                                                                            
     We  are  not  a  participation   sport  so  much  as  a                                                                    
     spectator  sport,  if you  will.    People come  in  to                                                                    
     watch;  they don't  come in  to participate.   We  have                                                                    
     various  and  sundry laws  already  on  the books  that                                                                    
     regulate most of the issues that  are in this bill.  If                                                                    
     the city police and the  people that are supposed to be                                                                    
     regulating this can't regulate it  at this point, [what                                                                    
     makes]  anybody think  that somebody  else is  going to                                                                    
     come  in   and  regulate  it  more,   with  more  laws,                                                                    
     particularly  when   a  lot   of  the  laws   are  just                                                                    
     redundant.  They  just [do] things that  are already on                                                                    
     the books that  are not being enforced, if  that is the                                                                    
     At  the last  public  safety meeting  that I  attended,                                                                    
     Chief  Monegan  [of  the Anchorage  Police  Department]                                                                    
     told us  that the police  had better things to  do than                                                                    
     deal with legal businesses that are already regulated.                                                                     
Number 1551                                                                                                                     
CAROL   HARTMAN,  Co-Owner,   Fantasies,  voiced   concern  about                                                               
dancers' having to take classes  about STDs [sexually transmitted                                                               
diseases]  and self-defense,  for example;  objected strongly  to                                                               
having her  business called a  sexually oriented  business [SOB],                                                               
saying it's  an adult-oriented business,  which is how  it's been                                                               
referred  to  in  other  codes;  objected  to  having  all  these                                                               
regulations; and said  there is no sex involved and  thus the STD                                                               
[education requirement] is a moot point.                                                                                        
MS. CAROL  HARTMAN said people who  are 18 years old  are adults,                                                               
and should  have every right  and be  able to work  wherever they                                                               
want.  To work in another  industry, she said, they don't have to                                                               
follow these rules and regulations,  take classes, or learn about                                                               
other  jobs.   So  why should  they have  to  for this  industry?                                                               
Citing a  10-year study done  in Las  Vegas on dancers  and their                                                               
customers,  she said  it showed  that  STDs occur  on average  20                                                               
percent  of  the  time  among   typical  same-age  females;  with                                                               
dancers, it was only 9.6 percent.  She concluded:                                                                               
     There was a lot of  other things covered in there, too,                                                                    
     but  at three  minutes, I'm  not  going to  be able  to                                                                    
     cover  it.   I've got  a lot  of Supreme  Court rulings                                                                    
     here, too, that I'd like  to get into, but obviously we                                                                    
     don't  have time.    And  I just  would  think that  we                                                                    
     should be given a little bit  more time to go over this                                                                    
     and study  it, and come  up with some more  answers and                                                                    
     questions for you.                                                                                                         
Number 1439                                                                                                                     
CHAIR  ANDERSON asked  that Ms.  Carol Hartman  send any  written                                                               
ideas regarding  those cases  or her  thoughts to  the committee.                                                               
He pointed out that the bill had further committees of referral.                                                                
REPRESENTATIVE ROKEBERG  asked Ms.  Carol Hartman if  the dancers                                                               
in  her business  are hired  under the  wage-and-hour Act  or are                                                               
independent contractors.                                                                                                        
MS. CAROL  HARTMAN replied that  they had never  done independent                                                               
contracting, which  she believes would  be against the law.   She                                                               
offered to show  paperwork from her business that had  to do with                                                               
Number 1364                                                                                                                     
REPRESENTATIVE ROKEBERG  asked Ms.  Carol Hartman if  she allowed                                                               
people over the age of 21 into  her under-21 club, and if many of                                                               
her clientele were military personnel.                                                                                          
MS. CAROL  HARTMAN replied that  most of the  dancers, employees,                                                               
and patrons are over 21.   On Fridays and Saturdays she sees some                                                               
who are 18, 19, or 20 years of  age, but basically it is an older                                                               
clientele.  She declared, "We have a lot of military."                                                                          
Number 1356                                                                                                                     
REPRESENTATIVE  DAHLSTROM asked  that Ms.  Carol Hartman  include                                                               
information about  the study  from Las  Vegas in  the information                                                               
she would provide to the committee.   She also inquired about the                                                               
licensing process there.                                                                                                        
MS. CAROL HARTMAN  said she didn't know.  She  clarified that she                                                               
had  information   from  "Legal  Economics,   Incorporated,"  and                                                               
mentioned information  about Supreme  Court rulings  on licensing                                                               
and licensing applications that  were ruled unconstitutional, but                                                               
didn't have copies with her at the time.                                                                                        
REPRESENTATIVE McGUIRE,  noting that  her office  had information                                                               
on Las Vegas, San Diego, and Los Angeles, added:                                                                                
     It  is   far  more  stringent.     This  [bill]  barely                                                                    
     scratches  the surface  of  the licensing  requirements                                                                    
     that are in  place in those communities,  and many more                                                                    
     communities.  Those were just  the three that we looked                                                                    
     at.    So  ...  I  think  it's  important  that  people                                                                    
     understand, while  Las Vegas will  tout that as  one of                                                                    
     their industries and attractions,  they also step up to                                                                    
     the  plate in  terms  of  licensing and  responsibility                                                                    
     that's [commensurate] with it.                                                                                             
Number 1235                                                                                                                     
CHAIR ANDERSON  noted that  he was  formerly associated  with the                                                               
Anchorage   CHARR   [Cabaret   Hotel   Restaurant   &   Retailers                                                               
Association].  He  asked if any associations that  are members of                                                               
CHARR  or ARBA  [Anchorage Restaurant  and Beverage  Association]                                                               
had written Ms. Hartman or taken a stance on this.                                                                              
MS. CAROL HARTMAN indicated she'd ask them about it.                                                                            
Number 1157                                                                                                                     
REX BUTLER, saying  he represents Crazy Horse  [club] and Teasers                                                               
[under-21  club]  and  noting that  owner  Jeanette  Johnson  was                                                               
present,  asked  what research  had  been  done in  Anchorage  to                                                               
establish the  need for  this regulation.   He  expressed concern                                                               
about having an opportunity to look at  it and comment on it.  He                                                               
also  expressed concern  that isolated  instances  may have  been                                                               
encountered and  thus led to a  request for this regulation.   He                                                               
provided an  Internet address, "legaleconomics@aol.com"  - saying                                                               
Dr. Robert Schmidt (ph) and  Dr. Alan Slotman (ph) apparently did                                                               
this, a  10-year study of  700 dancers  and 400 patrons;  he also                                                               
provided a phone number, (702) 579-4101.                                                                                        
MR.  BUTLER  emphasized the  desire  to  review the  research  or                                                               
complaints  in   order  to  determine  whether   this  additional                                                               
regulation is  needed.  Also  noting that dancing is  a transient                                                               
business, he explained:                                                                                                         
     Young  ladies  will come  in,  sometimes  just for  the                                                                    
     summer, and work.  Some will  just come in just to work                                                                    
     for winter.   Now, you want the club owners  to pay for                                                                    
     these people  to have  STD testing,  when I'm  not sure                                                                    
     that  ... that's  necessary -  and certainly  owners of                                                                    
     the  businesses  are concerned  -  and  to have  career                                                                    
     training,  and  self-defense  classes where  we're  not                                                                    
     even sure ...  that any dancer's ever been  harmed by a                                                                    
     patron, or  that ... any  dancer has ever had  STDs, or                                                                    
     needs career training.                                                                                                     
     But the fact of the matter  is, ... most of the dancers                                                                    
     in town  are over 21.   But aside from that,  there are                                                                    
     lots of  them. ... You've  got three or four  clubs ...                                                                    
     in Anchorage  that feature  dancers -  maybe five  - to                                                                    
     put in  enough money to pay  for all of this.   And, of                                                                    
     course,  that's creating  a burden  ...  on the  clubs.                                                                    
     And, of  course, if  they don't  comply, then  they can                                                                    
     lose their license and what-have-you.   So I'd also ask                                                                    
     the committee to  please review ... that  aspect of it.                                                                    
     And  certainly,  when it  gets  to  [the House  Finance                                                                    
     Committee], they need to take that into consideration.                                                                     
Number 0985                                                                                                                     
CHAIR  ANDERSON informed  Mr. Butler  that last  week's testimony                                                               
included "a doctor from Duke  University, on mental and emotional                                                               
brain formation, and how this  actually does adversely affect, in                                                               
this case,  young ladies who are  dancing, under 21, in  terms of                                                               
the  potential  for  ...  anything  from  language  to  touching,                                                               
assault, and other things, that  certainly he believes and others                                                               
believe do occur in these establishments."  He continued:                                                                       
     Secondly,  we heard  ... a  lot of  representation from                                                                    
     the Anchorage Police Department,  in fact, so many that                                                                    
     we had to cut some of  the officers off, and I think we                                                                    
     only  heard  from  four, stating  that,  in  actuality,                                                                    
     there are problems.   And they're not  stating one club                                                                    
     or  another, and  we were  talking about  under-21, not                                                                    
     Crazy  Horse, ...  but the  establishments that  afford                                                                    
     18-year-old women to dance.                                                                                                
     And  they talked  about that  sometimes there  are high                                                                    
     school   girls  dancing   and  certainly   high  school                                                                    
     patrons.   It was noted that  they're 18-year-olds. ...                                                                    
     The  state  troopers  came on  and  endorsed  the  bill                                                                    
     wholeheartedly,  and  said  ...  they  agree  with  the                                                                    
     direction  it's going.   And  then, finally,  the other                                                                    
     person ... that testified was ... the PTA chair.                                                                           
CHAIR ANDERSON concluded  by saying he'd have his  staff send Mr.                                                               
Butler and the Hartmans a packet.                                                                                               
REPRESENTATIVE DAHLSTROM disagreed that  patrons don't "go after"                                                               
the dancers.  She remarked:                                                                                                     
     We do  have proof, and  I would  use as an  example the                                                                    
     famous  Alaska  case  of  ...  the  baker,  Mr.  Robert                                                                    
     Hanson,  who years  ago  specifically targeted  nothing                                                                    
     but dancers  and prostitutes.   And that's a  case that                                                                    
     terrorized our  entire state for  many years,  and took                                                                    
     the lives of dozens ... of women of all ages.                                                                              
MR. BUTLER said  he understood that, but pointed out  that it was                                                               
years ago  and that Mr.  Hanson was convicted of  numerous crimes                                                               
that this bill doesn't even address.  He reiterated that he                                                                     
wondered whether some sporadic instances are now fueling this.                                                                  
Number 0800                                                                                                                     
REPRESENTATIVE McGUIRE remarked:                                                                                                
     When  I   talked  earlier  about  the   role  of  local                                                                    
     governments  and state  governments,  what  we know  is                                                                    
     that  we're  allowed  to  place  ...  reasonable  time,                                                                    
     place, and  manner restrictions ...  because we  have a                                                                    
     substantial  state  interest  and there  are  secondary                                                                    
     To establish  a substantial government interest,  ... a                                                                    
     city   must   show    that   in   enacting   particular                                                                    
     limitations,  it did  rely upon  evidence permitting  a                                                                    
     reasonable inference that  absent such limitations, the                                                                    
     adult  business would  have harmful  secondary effects.                                                                    
     ...  So   that's  important,  and   it  goes   to  what                                                                    
     Mr. Butler was saying.                                                                                                     
     What is also important is,  a city need not conduct new                                                                    
     studies or  produce evidence independent of  those that                                                                    
     have  already   been  generated  by  other   cities  to                                                                    
     demonstrate the  problem of secondary effects,  and may                                                                    
     rely upon  studies by other  cities and  legal opinions                                                                    
     on similar issues.                                                                                                         
     So that's what's really important  in ... the testimony                                                                    
     that you  heard.  Some  of it by  the neuropsychologist                                                                    
     was direct; by the PTA  president, it's direct.  And it                                                                    
     stems,  Mr. Butler,  ... directly  from  the fact  that                                                                    
     teachers  and  parents  are reporting  that  there  are                                                                    
     students in  the classrooms ...  in our schools  in the                                                                    
     state of Alaska  that are stripping.  And  some of them                                                                    
     are not  18.  Some  of them are 18.   Some of  them are                                                                    
     17.  Some of them are 16.                                                                                                  
     And they  are also  reporting that in  these classrooms                                                                    
     some  of the  young men  are patronizing  these places.                                                                    
     It's having  a disrupting  effect on education.   There                                                                    
     are taunts that  go on to these young women.   They are                                                                    
     called all  kinds of names.  ... They  are compromised,                                                                    
     in the opinion of  teachers and parents, basically, for                                                                    
     life. ...  They are  put into a  category of  a person,                                                                    
     and are treated  within the school setting  ... in that                                                                    
     And  in the  opinion of  one teacher  I talked  to, she                                                                    
     believes  ... it  had a  direct effect  on one  student                                                                    
     dropping out that she knows of.   I don't know how many                                                                    
     more.  So that is an impact on our state.                                                                                  
Number 0658                                                                                                                     
REPRESENTATIVE McGUIRE referred  to a study done  on strip clubs,                                                               
according to  strippers, exposing workplace sexual  violence; she                                                               
offered to  provide it to  Mr. Butler  or anyone else,  and noted                                                               
that  it had  been read  by Representative  Gara at  the previous                                                               
bill hearing.  It says 78  percent of women in these clubs report                                                               
being grabbed by  their arm; 94 percent, grabbed  by their waist;                                                               
56 percent, bitten;  78 percent, licked; 39  percent, slapped; 72                                                               
percent,  punched; 72  percent, pinched;  61 percent,  spit upon;                                                               
and 83 percent,  having their costume actually pulled  off.  With                                                               
regard to the "legal part," she remarked:                                                                                       
     It is relevant  that we have local  information, but it                                                                    
     is not the  entire story.  We are allowed  to rely upon                                                                    
     studies that  have been done  Outside.  We  are allowed                                                                    
     to rely upon legal opinions  of other communities.  And                                                                    
     that's  what we've  been doing,  is  building ...  that                                                                    
CHAIR ANDERSON assured listeners that  the legal aspects would be                                                               
debated in a another committee.                                                                                                 
Number 0571                                                                                                                     
SHERMAN  JONES, currently  an  employee  at Fantasies,  explained                                                               
that  he'd worked  at eight  clubs  around the  country and  thus                                                               
brings a different perspective to his testimony.  He said:                                                                      
     Basically, it is  very easy to say ...  what happens in                                                                    
     the clubs.   And if  you have never actually  been into                                                                    
     one  of  the establishments,  all  the  studies in  the                                                                    
     world  can be  done, people  can say  this happened  or                                                                    
     that happened,  but if you  have not been in  the club,                                                                    
     you don't know what's going on. ...                                                                                        
     Any perspective  that you want  to find, you  can find.                                                                    
     You can  find a  person that  fell down  on a  piece of                                                                    
     ice, or  you can  find a person  that this  happened or                                                                    
     that   happened.      I    don't   think,   under   any                                                                    
     circumstances, any type of licensing  that you bring is                                                                    
     going to change any of that. ...                                                                                           
     It was  said that  ... troopers, as  well as  APD, have                                                                    
     reported all  these things that  have happened.   Where                                                                    
     are  the people  that are  being arrested  for breaking                                                                    
     the law?   If a law has been broken,  the people should                                                                    
     be  arrested.   If something  happened or  occurs in  a                                                                    
     club and  it's a crime,  the people [who  committed the                                                                    
     crime] should  be arrested.   And we would love  to see                                                                    
     the blotter reports.                                                                                                       
     I work at  Fantasies.  We have a  relationship with the                                                                    
     police officers.   We have no problem  with them coming                                                                    
     in.   If  we do  something  wrong, we  expect the  same                                                                    
     thing  across the  board.   But  all  these things  are                                                                    
     being said.  We would love  to see it, but I don't want                                                                    
     to see  the study.  I  don't want to see  Dr. Long (ph)                                                                    
     or  whoever did  the  study on  this, because  anything                                                                    
     that you want to find, you can find. ...                                                                                   
     If you start  to teach young ladies,  young adults, how                                                                    
     to so-called protect  themselves, that's what I  do.  I                                                                    
     am ...  police-certified trained.   [I teach  them] how                                                                    
     to protect  themselves if someone does  bump into them.                                                                    
     And it's  going to  happen.   It happens  at McDonald's                                                                    
     [restaurant].   So what are  you going  to do -  are we                                                                    
     going to get  a license for McDonald's  and we're going                                                                    
     to say, "Hey,  if you work at McDonald's,  you can't do                                                                    
     This is a job; this is  entertainment.  And you have to                                                                    
     look at it  like that.  Just  because someone [doesn't]                                                                    
     approve,   that's  their   moral  convictions;   that's                                                                    
     something that they  deal with.  But ...  this is still                                                                    
     the United States, when I  woke up this morning, unless                                                                    
     it's  changed.  ... And  now,  are  we going  to  start                                                                    
     passing  all  of our  positions  and  moral beliefs  on                                                                    
     everyone else?  No.  This is the United States.                                                                            
Number 0343                                                                                                                     
JEANETTE JOHNSON, Owner, Teasers  and Crazy Horse, testified that                                                               
she opened Teasers a year ago  and has yet to get an 18-year-old.                                                               
She countered the idea that "all  of these young ladies at 18 are                                                               
rushing to get in a strip bar."   As for girls dancing at 14, 15,                                                               
or 16, she  asked, "Where are their parents? ...  I wonder if the                                                               
PTA  went to  their  parents  from schools,  and  told them  they                                                               
[were] out in these places."  She continued:                                                                                    
     On the girls' getting a  business license, I think if a                                                                    
     girl comes up from the Lower  48 and has to go to work,                                                                    
     knows that  she has a  job or can  get a job  here, and                                                                    
     had to  wait 10  days for this  business license  to be                                                                    
     approved  and to  be posted  and  whatever, that  young                                                                    
     lady's going to go to  the streets or somewhere fast if                                                                    
     she needs to  make hotel money or  something like that.                                                                    
     I think 10 days is just  too long a time for a business                                                                    
     license to be issued.                                                                                                      
     As far as diseases, you  can go in any public restroom,                                                                    
     if  it's  not  clean,  and  sit  on  the  toilet.    If                                                                    
     [there's] not tissues there or  toilet seat covers, ...                                                                    
     you can contact a disease.                                                                                                 
Number 0222                                                                                                                     
CHAIR ANDERSON surmised that amending  the bill to change the age                                                               
to 21  wouldn't affect Crazy  Horse, a  full-dispensary, licensed                                                               
establishment with  dancers and  patrons over the  age of  21; he                                                               
asked  whether that's  correct.   He noted  that it  would affect                                                               
MS. JOHNSON replied, "Except Teasers."  She added:                                                                              
     If  everybody is  so worried  about 18,  we don't  hire                                                                    
     girls that  are still  in high school.   If  they [are]                                                                    
     still  in high  school at  18,  I don't  know what  the                                                                    
     system is  like now, but  what are they still  doing in                                                                    
     high school at 18 and 19?                                                                                                  
CHAIR ANDERSON estimated  that perhaps 20 percent  of high school                                                               
seniors are 18 years of age.  He  offered to send her a packet of                                                               
the input and letters.                                                                                                          
Number 0108                                                                                                                     
DOUG HARTMANN, Anchorage, began by  saying he has no relationship                                                               
to the  two Hartmans who'd  previously testified.  He  stated, "I                                                               
joined the military at age 18, and  we ended up going to war, the                                                               
second half  of the war that  we're continuing on with  now."  As                                                               
for freedom of  expression, he said he has been  an artist almost                                                               
10 years and remarked:                                                                                                          
     At age 18, if a person can  go to war and die for their                                                                    
     country or kill another  human being for their country,                                                                    
     how   come  they   can't   participate  [in]   artistic                                                                    
     expression?  I  think that ... what the  lady over here                                                                    
     was  talking about,  with the  woman's right  to choose                                                                    
     what she  does with  her own body,  if she's  an adult,                                                                    
     ... that's a strong statement,  and I stand behind that                                                                    
MR. HARTMANN  referred to  the suggestion  that this  gives local                                                               
law enforcement  an excuse to come  into the clubs and  check the                                                               
licensing.   He asked, "An  excuse to do  what?"  He  referred to                                                               
testimony by  Rex [Butler]  and said  there are  crimes committed                                                               
everywhere, including  these establishments.  He  added, "We have                                                               
bouncers, we have  people protected, and we try  to do everything                                                               
we can to  make sure these girls know  about sexually transmitted                                                               
TAPE 04-8, SIDE A                                                                                                             
Number 0025                                                                                                                     
MR.  HARTMANN  emphasized  the  desire to  make  sure  that  "our                                                               
dancers come back to us safely."   He questioned, however, why it                                                               
would be more  difficult for people to get a  license to work for                                                               
a  club  than to  get  a  business  license  to start  their  own                                                               
business or  a license to operate  a vehicle.  He  also suggested                                                               
fingerprinting  and so  forth would  make people  "look and  feel                                                               
like  they  are a  criminal."    With  regard  to crime  and  bad                                                               
behavior, he said:                                                                                                              
     I'm  the  guy who  goes  out  there,  and I  watch  the                                                                    
     dancers, and I  watch the customers to  make sure these                                                                    
     crimes  are not  committed.   And when  I see  anything                                                                    
     that  looks remotely  ... disrespectful  to  one of  my                                                                    
     ladies, then I stop it.  And I stop it immediately.                                                                        
     I  think if  there's going  to be  regulations, ...  we                                                                    
     need more  help in stopping  these from happening.   If                                                                    
     somebody does  try to do  something, ... we need  to be                                                                    
     able to  call the police.   We need to be  able to say,                                                                    
     "Hey, this guy is stealing  from her, this guy is doing                                                                    
     something,"  rather  than,  "Excuse me,  sir,  can  you                                                                    
     please  leave?"  ...  That's   not  right;  that's  not                                                                    
     respectful to  the business;  that's not  respectful to                                                                    
     the ladies who work there.                                                                                                 
MR. HARTMANN  suggested that  this doesn't  show any  concern for                                                               
people 21 years old or older.   Reiterating that this issue isn't                                                               
with the dancers or clubs, but is with the people, he concluded:                                                                
     We  need more  regulations on  what we  can do  to help                                                                    
     keep these things  - keep these bad people  - away from                                                                    
     our dancers,  and we  can keep  this a  clean industry,                                                                    
     because, believe  me, nobody  in this room  wants these                                                                    
     things to happen that you've  described that happen all                                                                    
     the time - which, I can  tell you, ... do not happen as                                                                    
     often ... as it is claimed to happen.                                                                                      
Number 0200                                                                                                                     
REPRESENTATIVE  ROKEBERG, noting  that the  bill would  require a                                                               
dancer to  get a  biennial license for  $844, asked  Mr. Hartmann                                                               
how this would affect his hiring practices.                                                                                     
MR. HARTMANN  cited an example, pointing  out that the cost  of a                                                               
business license  has been raised  to $200,  from $50.   He asked                                                               
why it would  be twice that [$844 every two  years] for a dancer,                                                               
who isn't even a business owner.                                                                                                
REPRESENTATIVE ROKEBERG  asked how  it would affect  the business                                                               
MR. BUTLER  spoke up:   "It would  close it up.   A lot  of these                                                               
young ladies  don't have that  kind of  money to start  with, ...                                                               
and that kind of money, oh,  that's astronomical."  He added that                                                               
it doesn't cost that much to get a license to practice law.                                                                     
CHAIR ANDERSON closed the public hearing.                                                                                       
Number 0322                                                                                                                     
CHAIR  ANDERSON introduced  Amendment 1,  labeled [23-LS1394\D.3,                                                               
Craver, 1/30/04], which read:                                                                                                   
     Page 1, lines 2 and 3:                                                                                                     
          Delete "relating to protection of the safety and                                                                    
     health  of  and  to  education  of  young  persons  who                                                                  
     perform in adult entertainment establishments;"                                                                          
     Page 4, line 5:                                                                                                            
          Delete "19"                                                                                                           
          Insert "21"                                                                                                           
     Page 4, lines 16 - 23:                                                                                                     
          Delete all material.                                                                                                  
     Page 6, line 5:                                                                                                            
          Delete "(a)"                                                                                                          
     Page 6, lines 9 - 12:                                                                                                      
          Delete all material.                                                                                                  
     Page 9, line 9:                                                                                                            
          Delete "18"                                                                                                         
          Insert "21"                                                                                                         
     Page 9, line 11:                                                                                                           
          Delete "18"                                                                                                           
          Insert "21"                                                                                                           
     Page 9, line 16:                                                                                                           
          Delete "18"                                                                                                           
          Insert "21"                                                                                                           
     Page 9, line 22:                                                                                                           
          Delete "18"                                                                                                           
          Insert "21"                                                                                                           
     Page 10, line 2:                                                                                                           
          Delete "18"                                                                                                           
          Insert "21"                                                                                                           
     Page 11, lines 18 - 31:                                                                                                    
          Delete all material.                                                                                                  
     Renumber the following bill sections accordingly.                                                                          
     Page 12, line 6:                                                                                                           
          Delete "Sections 3 - 5 of this Act take"                                                                              
          Insert "Section 3 of this Act takes"                                                                                  
     Page 12, line 12:                                                                                                          
          Delete "Sections 3 - 5 of this Act take"                                                                              
          Insert "Section 3 of this Act takes"                                                                                  
     Page 12, line 13:                                                                                                          
          Delete "sec. 7(b)"                                                                                                    
          Insert "sec. 5(b)"                                                                                                    
     Page 12, line 19:                                                                                                          
          Delete "Sections 1, 2, 6, and 7"                                                                                      
          Insert "Sections 1, 2, 4, and 5"                                                                                      
Number 0235                                                                                                                     
CHAIR ANDERSON referred  to testimony the previous  week and said                                                               
he believes the  claim that any change of age  would be violative                                                               
of  the First  Amendment  isn't accurate  in  this case,  because                                                               
there are  secondary effects.   He highlighted  the need  to make                                                               
policy  with  regard  to  what  affects  the  public.    He  said                                                               
testimony  from the  PTA,  APD,  and state  troopers  led him  to                                                               
believe that "we  do think prostitution is  increasing, and maybe                                                               
not at  your club, but  at others," and that  18-year-olds aren't                                                               
attending school.  He continued:                                                                                                
     A  doctor  from  Duke   University  stated  mental  and                                                                    
     emotional abuse, and credible  statistics to that; drug                                                                    
     use; there  was a  list of things  and reasons  why I'd                                                                    
     like to make an amendment  to say that patronage should                                                                    
     be 21 and dancing should be 21. ...                                                                                        
     To refute what  the last gentleman said,  right now you                                                                    
     can't  gamble until  you're 21  years of  age, and  you                                                                    
     can't drink until you're 21 years  of age.  And we have                                                                    
     to have parity;  we have to have a  uniformity if we're                                                                    
     going  to   ...  have  laws   that  affect   ...  these                                                                    
     establishments.  And so it's  purely on a public policy                                                                    
     basis  and [a  concern for]  the safety  for these  21-                                                                    
     year-old dancers.                                                                                                          
Number 0430                                                                                                                     
CHAIR  ANDERSON  moved  to  adopt   Amendment  1  [text  provided                                                               
REPRESENTATIVE ROKEBERG objected for purposes of discussion.                                                                    
CHAIR ANDERSON explained  that Amendment 1 inserts  [age] "21 for                                                               
19  and 18  where necessary."    He suggested  it's fairly  self-                                                               
explanatory.  In  reply to Representative Guttenberg,  he said it                                                               
amends the  original bill [Version  D, labeled  23-LS1394\D], and                                                               
that  Barbara  Craver  [the  drafter] had  told  him  it  applies                                                               
substantively  to [Version  H] as  well, but  that the  [page and                                                               
line] numbering would change.                                                                                                   
REPRESENTATIVE ROKEBERG  asked if  this simply changes  the ages,                                                               
but the other provisions do nothing else.                                                                                       
CHAIR ANDERSON said  that was correct, other than the  title.  He                                                               
explained that  removed [from  the title]  would be  "relating to                                                               
protection of the safety and health  of and to education of young                                                               
persons who perform in adult entertainment establishments".                                                                     
Number 0536                                                                                                                     
REPRESENTATIVE  ROKEBERG  asked  whether the  amendment  includes                                                               
changes  from  DCED  to  the Department  of  Labor  [&  Workforce                                                               
Development], the Department of Law,  or the Department of Public                                                               
Safety (DPS).                                                                                                                   
CHAIR ANDERSON said no.                                                                                                         
REPRESENTATIVE  ROKEBERG  remarked that  he'd  "take  any one  of                                                               
those ... departments  except that one," but  wouldn't address it                                                               
CHAIR ANDERSON  suggested any  recommendations could  be analyzed                                                               
in the  House Judiciary Standing Committee  [which Representative                                                               
McGuire chairs and he is a member of].                                                                                          
Number 0536                                                                                                                     
REPRESENTATIVE ROKEBERG removed his objection.                                                                                  
REPRESENTATIVE McGUIRE commented:                                                                                               
     Representative  Rokeberg and  I have  already discussed                                                                    
     this.  I'm  amenable to any changes  that would include                                                                    
     placing  it  within  the  appropriate  department,  the                                                                    
     department that has the most resources to handle it.                                                                       
     And then  I also just  wanted to  make it clear  on the                                                                    
     record  that the  licensing fee  was not  determined by                                                                    
     me.   And I would  not have it  that high.   The reason                                                                    
     that the license fee is  apportioned out that way is on                                                                    
     account of a  fiscal note that I  received just Friday.                                                                    
     ...  So what  I've been  doing, for  those online,  is,                                                                    
     I've been  working with the [Division  of Occupational]                                                                    
     Licensing to reduce that.                                                                                                  
     The biggest part  of that fiscal note  is the education                                                                    
     and training that we want  to give young people so that                                                                    
     they know there are other  alternatives out there.  The                                                                    
     testimony comes  from former strippers that  were young                                                                    
     when they got into it.   And what they have been saying                                                                    
     to me, and  to my staff and to us,  is that they didn't                                                                    
     know   that   there  were   vocational   opportunities,                                                                    
     scholarships, any  other alternatives, and  they needed                                                                    
     to make a buck.                                                                                                            
     And so,  we just want  them to have ...  the education;                                                                    
     that's the high part of  the fiscal note.  We're trying                                                                    
     to find  a model for that,  and we're going to  get the                                                                    
     fiscal note down.  And  I'd be amenable to anything ...                                                                    
     Representative Rokeberg has suggested.                                                                                     
CHAIR ANDERSON referred to testimony  the previous week and asked                                                               
for  confirmation   that  representatives  from   Covenant  House                                                               
[Alaska], DPS,  APD, and the PTA,  as well as the  professor from                                                               
Duke [University],  had all said  they'd prefer the age  for both                                                               
patronage and dancers to be 21.                                                                                                 
Number 0654                                                                                                                     
REPRESENTATIVE McGUIRE agreed.  Saying she didn't have the case                                                                 
before her, she added:                                                                                                          
     One of  the things we  know that's interesting  is that                                                                    
     your  constitutional rights  are less  as a  patron; in                                                                    
     fact,  they're almost  nonexistent.   Your right  to be                                                                    
     entertained ... is not affected  at all.  So ... that's                                                                    
     not  even something  we need  to  deal with.   But  the                                                                    
     reason that  they testified  to that  is that  it's, in                                                                    
     fact, the exposure that young  people have to drugs, to                                                                    
     the potential for prostitution,  to abuse, and to other                                                                    
     things that they may not be prepared for.                                                                                  
     The final thing  I would say is, I  really support this                                                                    
     move  to change  it  to 21.   What  we  heard from  the                                                                    
     [Alcoholic Beverage Control  Board], from the troopers,                                                                    
     and the APD is there  are already institutions in place                                                                    
     for 21-and-older  clubs, by virtue of  serving alcohol.                                                                    
     So that's  a license that's already  required; that's a                                                                    
     big hammer  that's over somebody's  head.   I guarantee                                                                    
     that if  you ask Jeanette  Johnson, she makes  sure her                                                                    
     servers  are 21  and older  because the  penalty is  so                                                                    
     great:   if they  are not, they  can get  their alcohol                                                                    
     license pulled.                                                                                                            
REPRESENTATIVE McGUIRE closed by saying she believes it is                                                                      
important for patrons and dancers to be at least 21 years old.                                                                  
Number 0733                                                                                                                     
REPRESENTATIVE  GUTTENBERG stated  concern, with  this amendment,                                                               
about  the severability  clauses if  it becomes  a constitutional                                                               
issue.  He also asked about  the fallback position.  Would people                                                               
ages  19 to  21  be allowed  to  dance and  be  covered by  these                                                               
REPRESENTATIVE McGUIRE responded:                                                                                               
     What I  have uncovered through my  research, and others                                                                    
     have  as  well  --  Kara  Nyquist,  the  attorney  from                                                                    
     Covenant House  [Alaska] -- is that  the constitutional                                                                    
     challenges ...  exist whether  you say  19, 20,  or 21.                                                                    
     So the issue  is the age of majority.   We think we can                                                                    
     overcome  that.   We think  that there  [are] arguments                                                                    
     that  ... you  can't  smoke until  you're  19 now;  you                                                                    
     can't  drink  until you're  21  now.   We  think  we've                                                                    
     presented evidence on the secondary effects.                                                                               
     That said,  the fallback position and  what you'll see,                                                                    
     just to  ... cut  to the chase:   ...  the severability                                                                    
     clause,  as  everybody  understands,  if  one  part  is                                                                    
     deemed unconstitutional,  the guts  of it remain.   The                                                                    
     guts  of it  that would  remain begin  on page  11, and                                                                    
     they start at Section 3  and go down through Section 7.                                                                    
     So, essentially,  what we're going  to do is  fall back                                                                    
     to  saying, "OK,  if you  say it's  unconstitutional to                                                                    
     have the  age-related requirement in the  license, that                                                                    
     part's  out, but  the  license still  exists."   So  we                                                                    
     still have a mechanism for regulating this industry.                                                                       
Number 0942                                                                                                                     
REPRESENTATIVE   CRAWFORD   asked   for   clarification   because                                                               
[Amendment 1]  appears to delete  the education  requirements for                                                               
those  between ages  19 and  21.   Thus  if  the age  is 21,  the                                                               
education isn't needed.                                                                                                         
CHAIR ANDERSON directed members to page 4, line 26.                                                                             
REPRESENTATIVE CRAWFORD asked,  if age 21 is  thrown out, whether                                                               
the education and licensing requirements would come back again.                                                                 
REPRESENTATIVE  McGUIRE  said  she  didn't have  a  copy  of  the                                                               
amendment, but stated:                                                                                                          
     So  long as  it doesn't  affect, starting  on page  11,                                                                    
     Sections  3  through  ...  10,  then  the  severability                                                                    
     clause is  in.  So you  can amend whatever you  want to                                                                    
     in the former part of the  bill, but the latter part of                                                                    
     the bill  that's important is the  severability clause,                                                                    
     and then what happens, once  it's severed.  And that is                                                                    
     still a  license requirement that says  ... that you've                                                                    
     got to ... attend a  course developed by the department                                                                    
     to   inform  applicants   of  career   and  educational                                                                    
     opportunities and so  on, but only if  you're under 21.                                                                    
     So, essentially, what [Sections] 3  through 8 do is ...                                                                    
     they  reencapsulate the  guts  of the  bill,  but in  a                                                                    
     smaller version.                                                                                                           
CHAIR  ANDERSON  agreed.   In  reply  to  a request  for  further                                                               
clarification, he said:                                                                                                         
     If you're  looking at the CS,  ... on page 4,  line 26,                                                                    
     Section 08.90.060 deals  with additional provisions for                                                                    
     sex-oriented   business   entertainer   licenses   for,                                                                    
     basically, 19- and 20-year-olds.   Because I've amended                                                                    
     it  to  21  [through  Amendment 1,  not  yet  adopted],                                                                    
     that's stricken.  And ...  on page 11, that remains ...                                                                    
     where you're talking  about for age 21  - [Sections] 3,                                                                    
     4, 5,  6, 7, all the  way down.  So  the reference that                                                                    
     still remains, that  you're in fear of, is  on page 12,                                                                    
     Section  6.   [Those] 21  years of  age and  older will                                                                    
     still have to have this education.                                                                                         
Number 1002                                                                                                                     
CHAIR  ANDERSON asked  if  there was  any  objection to  adopting                                                               
Amendment  1  [as  conformed  to  Version H].    There  being  no                                                               
objection, it was so ordered.                                                                                                   
REPRESENTATIVE ROKEBERG asked that  the sponsors look at deleting                                                               
DCED [from the  bill].  He said it should  be a criminal statute,                                                               
or  perhaps should  be assigned  to  the Department  of Labor  [&                                                               
Workforce Development] or even the Department of Public Safety.                                                                 
Number 1045                                                                                                                     
REPRESENTATIVE  ROKEBERG moved  to report  CSHB 367  [Version 23-                                                               
LS1394\H,  Craver, 1/30/04],  as amended,  out of  committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection,  CSHB 367(L&C)  was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
5:20 p.m.                                                                                                                       

Document Name Date/Time Subjects