00 CS FOR HOUSE BILL NO. 228(FIN) 01 "An Act relating to the accounting of fees from business license endorsements for 02 tobacco products, to the disclosure of certain confidential cigarette and tobacco product 03 information, to notification regarding a cigarette manufacturer's noncompliance with 04 the tobacco product Master Settlement Agreement, to business license endorsements for 05 sale of tobacco products, to citations and penalties for illegal sales of tobacco products; 06 and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 37.05.146(b)(4) is amended by adding a new subparagraph to read: 09 (XX) receipts of the Department of Community and Economic 10 Development for fees for business license endorsements for tobacco products 11 (AS 43.70.075); 12 * Sec. 2. AS 40.25 is amended by adding a new section to read: 13 Sec. 40.25.105. Disclosure of information for compliance with the tobacco 01 product Master Settlement Agreement. (a) Notwithstanding the provisions of 02 AS 40.25.100(a), the Department of Revenue may disclose information submitted to 03 the Department of Revenue relating to cigarette and tobacco products, cigarette and 04 tobacco product manufacturers, and cigarette and tobacco product retailers to the 05 attorney general and to other parties as the Department of Revenue determines 06 necessary to monitor and enforce compliance by cigarette and tobacco product 07 manufacturers with the tobacco product Master Settlement Agreement described in 08 AS 45.53.010 - 45.53.100. 09 (b) A person receiving information under this section shall maintain the 10 confidentiality that the Department of Revenue is required to extend under 11 AS 43.05.230 to the returns, reports, documents, determinations, and workpapers 12 furnished to that person under this section. 13 * Sec. 3. AS 43.50 is amended by adding a new section to read: 14 Sec. 43.50.145. Notification of noncompliance; confiscation of 15 noncomplying cigarettes. The department shall notify a licensee in writing when a 16 determination has been made that a cigarette manufacturer has failed to comply with 17 AS 45.53.020 or 45.53.040(a). The department's notification must contain the name 18 of the cigarette manufacturer that failed to comply and the affected brands of 19 cigarettes. The licensee shall, within 30 days after receiving the department's 20 notification under this section, destroy the brands of cigarettes covered by the notice 21 or return the brands of cigarettes to the manufacturer or distributor from which they 22 were purchased. Beginning on the 31st day after receipt of the notice, the brands of 23 cigarettes specified in the notice are contraband and subject to immediate confiscation. 24 The department may allow a credit for the tax on the returned or destroyed cigarettes. 25 * Sec. 4. AS 43.70.075(a) is amended to read: 26 (a) Unless a person has a business license endorsement issued under this 27 section for each location or outlet in a location where the person offers tobacco 28 products for sale, a person may not sell or allow a vending machine to sell in its 29 location or outlet cigarettes, cigars, tobacco, or other products containing tobacco as 30 a retailer at that location or outlet. Each [AN] endorsement required under this 31 section is in addition to any other license or endorsement required by law. A person 01 may not apply for an endorsement under this section for a location or outlet if an 02 endorsement issued for the same location or outlet is currently suspended or 03 revoked. An endorsement issued for a location or outlet to a person in violation 04 of this subsection is void. 05 * Sec. 5. AS 43.70.075(b) is amended to read: 06 (b) The department, upon payment of a fee of $100 [$25], shall issue a 07 business license endorsement to a person who applies for a business license under this 08 chapter, and may renew the endorsement issued under this subsection for a fee of $100 09 [$25]. The endorsement expires at the same time as the license to which it attaches. 10 Upon issuance of an endorsement, the department shall also issue to the person 11 receiving the endorsement notice of the penalties that may be imposed under this 12 section. 13 * Sec. 6. AS 43.70.075(d) is repealed and reenacted to read: 14 (d) If a person who holds an endorsement issued under this section, or an 15 agent or an employee of a person who holds an endorsement issued under this section 16 acting within the scope of the agency or employment, has been convicted of violating 17 AS 11.76.100, 11.76.106, or 11.76.107, the department shall suspend the endorsement 18 for a period of 19 (1) 20 days and impose a civil penalty of $300 if the person has not 20 been previously convicted of violating AS 11.76.100, 11.76.106, or 11.76.107 and is 21 not otherwise subject to the sanctions described in (2) - (4) of this subsection; 22 (2) 45 days and impose a civil penalty of $500 if, within the 24 months 23 before the date of the department's notice under (m) of this section, the person, or an 24 agent or employee of the person while acting within the scope of the agency or 25 employment of the person, was convicted once of violating AS 11.76.100, 11.76.106, 26 or 11.76.107; 27 (3) 90 days and impose a civil penalty of $1,000 if, within the 24 28 months before the date of the department's notice under (m) of this section, the person, 29 or an agent or employee of the person while acting within the scope of the agency or 30 employment of the person, was convicted twice of violating AS 11.76.100, 11.76.106, 31 or 11.76.107, or a provision of this section or a regulation implementing this section 01 adopted under AS 43.70.090; or 02 (4) one year and impose a civil penalty of $2,500 if, within the 24 03 months before the date of the department's notice under (m) of this section, the person, 04 or an agent or employee of the person while acting within the scope of the agency or 05 employment of the person, was convicted more than twice of violating AS 11.76.100, 06 11.76.106, or 11.76.107. 07 * Sec. 7. AS 43.70.075(e) is amended to read: 08 (e) If a person who receives an endorsement under this section has multiple 09 retail locations or outlets in a location, a suspension or revocation imposed under 10 [(d) OF] this section applies only to the retail outlet in the location in which the 11 violation occurs. 12 * Sec. 8. AS 43.70.075 is amended by adding new subsections to read: 13 (k) If a person, or an agent or employee of the person while acting within the 14 scope of the agency or employment of the person, violates a provision of (a) or (g) of 15 this section, the department may suspend the person's business license endorsement or 16 right to obtain a business license endorsement for a period of not more than 17 (1) 45 days; or 18 (2) 90 days if, within the 24 months before the date of the department's 19 notice under (m) of this section, the person, or an agent or employee of the person 20 while acting within the scope of the agency or employment of the person, violates a 21 provision of (a) or (g) of this section. 22 (l) Notwithstanding (a) of this section, a person owning vending machines that 23 offer tobacco products for sale need obtain only one business license endorsement 24 under this section even if the person has vending machines in more than one outlet or 25 location in the state. The person who owns a vending machine that offers tobacco 26 products for sale and the person who owns the premises where the vending machine is 27 located are both required to obtain a business license endorsement issued under this 28 section. If the endorsement of the person owning the vending machine is suspended or 29 revoked, the person may not sell cigarettes, cigars, or other products containing 30 tobacco during the period of suspension or revocation through the use of vending 31 machines at the location or outlet where the violation occurred. During the period of 01 suspension or revocation, the person owning that vending machine may not use that 02 machine to sell tobacco products at another location or outlet. 03 (m) The department may initiate suspension of a business license endorsement 04 or the right to obtain a business license endorsement under this section by sending the 05 person subject to the suspension a notice by certified mail, return receipt requested, or 06 by delivering the notice to the person. The notice must contain information that 07 informs the person of the grounds for suspension, the length of any suspension sought, 08 and the person's right to administrative review before the department. A suspension 09 begins 30 days after receipt of notice described in this subsection unless the person 10 delivers a timely written request for a hearing to the department in the manner 11 provided by regulations of the department. If a hearing is requested under this 12 subsection, a hearing officer of the department shall determine the issues by using the 13 preponderance of the evidence test and shall conduct the hearing in the manner 14 provided by regulations of the department. A hearing under this subsection is limited 15 to the following questions: 16 (1) was the person holding the business license endorsement, or an 17 agent or employee of the person while acting within the scope of the agency or 18 employment of the person, convicted by plea or judicial finding of violating 19 AS 11.76.100, 11.76.106, or 11.76.107; 20 (2) if the department does not allege a conviction of AS 11.76.100, 21 11.76.106, or 11.76.107, did the person, or an agent or employee of the person while 22 acting within the scope of the agency or employment of the person, violate a provision 23 of (a) or (g) of this section; 24 (3) within the 24 months before the date of the department's notice 25 under this subsection, was the person, or an agent or employee of the person while 26 acting within the scope of the agency or employment of the person, convicted of 27 violating AS 11.76.100, 11.76.106, or 11.76.107 or adjudicated for violating a 28 provision of (a) or (g) of this section. 29 (n) The commissioner may 30 (1) adopt the proposed decision of a hearing officer under this section; 31 (2) remand the matter for further proceedings; or 01 (3) reject the proposed decision, review the record, and issue a 02 decision based on the record. 03 (o) After notice and a hearing, the department may revoke a business license 04 endorsement or increase a period of suspension if the department finds that, during a 05 period of suspension, a person continues the conduct for which the endorsement or the 06 right to obtain an endorsement was suspended. A person whose endorsement or right 07 to obtain an endorsement is revoked or suspended under this subsection may not apply 08 for or obtain an endorsement under this chapter. A period of revocation or suspension 09 imposed under this subsection may not exceed two years. 10 (p) If a person who holds an endorsement issued under this section violates (f) 11 of this section, the department may impose a civil penalty not to exceed $250 for each 12 day of the violation, but the department may not suspend or revoke a business license 13 endorsement. The total civil penalty imposed under this subsection for each violation 14 may not exceed $5,000. 15 (q) The department may adopt regulations to establish an administrative 16 hearing process for actions taken by the department under this section. AS 44.62 17 (Administrative Procedure Act) does not apply to a hearing under this section. 18 (r) For purposes of this section, the sale of a product containing tobacco by an 19 agent or employee of a person who holds or is required to hold a business license 20 endorsement under this section at the location or outlet in a location for which the 21 endorsement was or was required to be issued is rebuttably presumed to have been a 22 sale within the person's scope of agency or employment. 23 (s) If a person violates (a) of this section, the department may impose a civil 24 penalty not to exceed $250 for each day of the violation. The total civil penalty 25 imposed under this subsection for each violation may not exceed $5,000. The civil 26 penalty described in this subsection may be imposed in addition to a suspension of a 27 business license endorsement or the right to obtain a business license endorsement 28 ordered by the department under (k) or (o) of this section. 29 * Sec. 9. AS 43.70.105 is amended by adding a new subsection to read: 30 (b) Notwithstanding an exemption provided by (a) of this section, a person 31 who sells cigarettes, cigars, tobacco, or other products containing tobacco as a retailer 01 must have a business license under AS 43.70.020 and a business license endorsement 02 required under AS 43.70.075. 03 * Sec. 10. AS 44.29 is amended by adding new sections to read: 04 Article 1A. Citations Concerning Tobacco Products. 05 Sec. 44.29.092. Citation for certain offenses concerning tobacco products. 06 A peace officer or an agent or employee of the Department of Health and Social 07 Services who is authorized by the commissioner of health and social services to 08 enforce this section, may issue a citation for a violation of AS 11.76.100, 11.76.106, or 09 11.76.107 if there is probable cause to believe a person has violated AS 11.76.100, 10 11.76.106, or 11.76.107. 11 Sec. 44.29.094. Procedure and form of citation. (a) A citation issued under 12 AS 44.29.092 must be in writing and must contain a notice to appear in court. A 13 person receiving the citation is not required to sign the notice. 14 (b) The time specified in the notice to appear in court on the citation shall be 15 at least five days, not including weekends and holidays, after the issuance of the 16 citation, unless the person cited requests an earlier appearance in court. 17 (c) The department is responsible for issuing to its agents or employees books 18 containing the appropriate form of citations and shall maintain a record of each book 19 issued and each form contained in the book. The department shall require and retain a 20 receipt for each book issued under this subsection to an agent or employee of the 21 department. 22 (d) The original or a copy of the form of citation shall be deposited with a 23 court having jurisdiction over the alleged offense. Upon deposit with the court, the 24 citation may be disposed of only by trial in the court or other official action taken by 25 the magistrate, judge, or prosecutor. A citation, copies of a citation, or the record of 26 issuance may not be disposed of except as required under this subsection and (e) of 27 this section. 28 (e) The department shall require the return of a copy of each citation issued by 29 an agent or employee of the department and all copies of the citation that have been 30 spoiled or upon which an entry has been made and not issued to an alleged violator. 31 The department shall also maintain, in connection with each citation issued by an 01 agent or employee, a record of the disposition of the charge by the court where the 02 original copy of the citation is deposited. 03 (f) If the form of citation conforms to court rules and includes the essential 04 facts constituting the offense charged, and if the citation is sworn to as required under 05 the state laws for a complaint charging commission of the offense alleged in the 06 citation, then the citation, when filed with a court having jurisdiction in this state, is 07 considered to be a lawful complaint for the purpose of prosecution. 08 (g) In this section, "department" means the Department of Health and Social 09 Services. 10 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 TRANSITION: REGULATIONS. The Department of Community and Economic 13 Development, the Department of Revenue, and the Department of Health and Social Services 14 may immediately proceed to adopt regulations necessary to implement changes to their 15 respective authorities made by this Act. The regulations take effect under AS 44.62 16 (Administrative Procedure Act), but not before the effective date of the respective statutory 17 changes. 18 * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 TRANSITION: BUSINESS LICENSE ENDORSEMENTS FOR LOCATIONS AND 21 OUTLETS. Notwithstanding AS 43.70.075(a), as amended by sec. 4 of this Act, a person 22 who, on the effective date of sec. 4 of this Act, holds a business license endorsement under 23 AS 43.70.075(a) as that subsection existed on the day before the effective date of sec. 4 of this 24 Act, does not have to obtain an additional business license endorsement for every location or 25 outlet in a location where the person offers tobacco products for sale until the current 26 endorsement expires. Upon expiration of the business license endorsement held on the 27 effective date of sec. 4 of this Act, the person shall obtain a business license endorsement for 28 every location or outlet in a location where the person offers tobacco products for sale, as 29 required by AS 43.70.075(a), as amended by sec. 4 of this Act. 30 * Sec. 13. Sections 2 - 4, 11, and 12 of this Act take effect immediately under 31 AS 01.10.070(c). 01 * Sec. 14. Sections 1 and 5 of this Act take effect July 1, 2001. 02 * Sec. 15. Except as provided in secs. 13 and 14 of this Act, this Act takes effect January 1, 03 2002.